Mandatory EPF Contributions for Foreign Workers Start Q4 2025
Starting in the fourth quarter of 2025, Malaysia will enforce mandatory Employees Provident Fund (EPF) contributions for foreign workers. This policy aims to enhance the financial security of expatriates and migrant workers while ensuring parity with local employees who already contribute to the national retirement savings scheme.
Mandatory EPF Contributions for Foreign Workers Start Q4 2025
Key Highlights of the New EPF Policy
Effective Date: The mandatory EPF contribution for foreign workers will begin in Q4 2025.
Who is Affected?: All legally employed foreign workers, including those in sectors such as manufacturing, construction, services, and plantations.
Contribution Rates: Employers and employees will be required to contribute a percentage of monthly wages, similar to local employees. The exact rates will be announced closer to the implementation date.
Withdrawal Terms: Foreign workers will be allowed to withdraw their accumulated EPF savings upon leaving Malaysia permanently or reaching retirement age.
Impact on Employers and Employees
For Employers
Employers must adjust payroll systems to include EPF contributions for foreign workers.
Additional financial planning is required to accommodate the added cost of contributions.
Ensures fair labor practices, aligning foreign worker benefits with local employees.
For Foreign Workers
Provides long-term financial security and savings benefits.
Encourages better financial management and retirement planning.
Offers a structured withdrawal process upon the end of employment in Malaysia.
Why This Policy Matters
Malaysia relies heavily on foreign labor, especially in key industries. By including them in the EPF system, the government aims to improve financial well-being, reduce exploitation, and ensure a fair employment framework. This move aligns Malaysia with international labor standards and enhances the country’s appeal to skilled foreign talent.
Looking Ahead
Employers and foreign workers should start preparing for the transition by understanding EPF contribution structures, compliance requirements, and potential financial impacts. The government is expected to provide further guidelines and assistance to facilitate a smooth implementation.
Stay tuned to MyJobe for updates on employment policies, job market trends, and regulatory changes affecting workers in Malaysia.
