Should EPF savings be paid zakat on every year, or when withdrawn?

The usual practice of state zakat centres in Malaysia is that zakat is due when EPF money is withdrawn and comes into full ownership, because before that it cannot be used freely.
The conditions of zakat on wealth include complete ownership; money locked into retirement contributions does not yet fully meet it. When withdrawn, whether partly (for example for a house or education) or fully at retirement, the amount is counted and zakat of two and a half per cent is paid if it reaches the nisab. The exact method — including whether dividends are counted and how withdrawals for basic needs are treated — differs between states, so check with your state zakat centre. Do not forget zakat on bank savings, Tabung Haji and stored gold, which are separate from EPF. In polygamy or after a death, EPF money paid to a nominee is subject to the rules of inheritance; see the question on EPF nominees. See Zakat & welfare.