Starting October 2025, all employers in Malaysia must begin contributing to the Employees Provident Fund (EPF) for their non-Malaysian workers — with very limited exceptions.
This policy change is part of a wider push to strengthen social protection for foreign workers and align Malaysia’s labour practices with international standards. If you’re an employer in manufacturing, logistics, construction, or any labour-intensive sector, here’s what you need to know and how to get ready.
Who does this apply to?
All foreign workers with valid employment passes or permits issued by the Immigration Department of Malaysia (JIM) — except domestic helpers — will now be covered under the EPF scheme.
The change was officially announced by EPF on June 25, 2025, and will be enforced starting with October salary payments, which are due for EPF contribution in November.
Key policy requirements
- Contribution rate: Employers and foreign workers will each contribute 2% of monthly wages to the EPF.
- Applicable wages: The contribution is calculated based on gross monthly earnings.
- Registration: Employers must ensure foreign workers are properly registered with the EPF.
- Exemptions: Domestic workers are excluded, but all other sectors are expected to comply.
What employers need to do now
1. Update payroll systems
Ensure your HR and payroll software is updated to calculate and reflect the 2% contribution. This includes payslips, payment files, and monthly reports.
Osadi Tip: If you’re using a third-party payroll provider, verify that EPF modules for foreign workers are already in place.
2. Communicate with your teams
Inform relevant HR, finance, and operations personnel about the changes. Miscommunication could lead to non-compliance and late payment penalties.
3. Revisit labour cost forecasts
This contribution, while relatively small, still impacts your total cost of employment. Plan ahead, especially if your business is in a tight-margin sector.
4. Register new workers promptly
Delays in EPF registration could trigger audit flags, especially for large workforces. Ensure your documentation and onboarding procedures are inspection-ready.
Why this matters
Malaysia’s labour policies are evolving and compliance is no longer optional. EPF contributions help:
- Improve worker welfare and long-term financial security
- Enhance Malaysia’s standing as a responsible labour market
- Protect companies from legal and reputational risks
At Osadi, we believe in ethical, compliant, and future-ready workforce practices. That’s why we’re supporting our clients through this transition.
Need help?
Whether you already employ foreign workers or are planning for Q4 recruitment, our team can support you with:
- Compliance consulting
- Payroll implementation (as part of our Managed Services)
- Workforce forecasting
- Document preparation and EPF registration
Let’s make your workforce compliant, protected, and prepared together. Reach out to Osadi, your end-to-end foreign workforce partner.
https://osadi.com.my/contact/
Prepared by Ken Wooi
Business Development Team
bdteam@osadi.com.my
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