|

Mandatory EPF contributions for foreign workers

The Dewan Rakyat has passed amendments to the Employees Provident Fund (EPF) Act 1991, making EPF contributions mandatory for foreign workers starting in the fourth quarter of 2025.

mandatory epf contributions for foreign workers

Both employers and foreign employees will contribute 2% of monthly wages, a rate lower than the 11% employee and 12%–13% employer contributions required for Malaysian workers.

This policy aims to correct wage imbalances, encouraging employers to hire more Malaysians and reducing reliance on low-skilled foreign labor.

It also seeks to curb undocumented employment, as only legally registered foreign workers will be eligible to contribute.

Additionally, channeling a portion of foreign workers’ earnings into EPF savings is expected to reduce capital outflows and strengthen the ringgit.

The government plans to streamline foreign worker EPF registration through automated integration with Immigration Department databases and online platforms to facilitate seamless compliance.

This initiative aligns with Malaysia’s aspirations to become a high-income nation by fostering a fair labor market and supporting sustainable wage growth.

Read more in The Edge Malaysia

Parliament approves mandatory EPF contribution for foreign workers, implementation likely in 4Q2025

author avatar
admin
See Full Bio

Similar Posts

  • What is Potongan Cukai Bulanan?

    In Malaysia, the Monthly Tax Deduction (MTD), also known as Potongan Cukai Bulanan (PCB), is a system where employers deduct income tax from their employees’ salaries on a monthly basis. This mechanism ensures a more manageable tax payment process for employees and facilitates timely tax collection for the government. Basis of MTD Calculation: The calculation…

  • Why outsource payroll?

    Payroll involves time consuming tasks that will need to be repeated every month. It is a non revenue generating function of your business, but needs to be handled on a timely and efficient way if you are to keep your employees motivated and happy. For small businesses, managing payroll can be a challenging and time-consuming…

  • |

    Employment Insurance Scheme

    Prime Minister Datuk Seri Najib Tun Razak announced an allocation of RM70 million to SOCSO for financial benefit payments that is said will benefit about 6.5 million private sector employees. Under this Employment Insurance Scheme (EIS) or Sistem Insurans Pekerjaan (SIP), employees will get temporary financial assistance to support themselves while they look for employment. This…

  • KWSP Jadual Ketiga March 2016

    KWSP has made available the schedule of EPF contributions payable under the revised Employee contribution rate of 8% which is effective from March 2016. The schedule can be downloaded from here. Employers will continue to contribute 13%. Notis KWSP 17A Khas 2016 This is for employees who prefer to continue contributing 11% instead of the…

  • Minimum wage set

    Prime Minister Datuk Seri Najib Tun Razak announced, on 30th April 2012, the introduction of Malaysia’s first minimum wage that will cover employees in all sectors excluding those employed as domestic help. For Peninsular Malaysia, the minimum wage has been set at RM900.00 while that in East Malaysia and Labuan is RM800.00 The rates will…