Starting from October 2025 salary onwards, with payments due by the 15th of the following month, employers and non-Malaysian employees in Malaysia will be required to contribute 2% each to the Employees Provident Fund (EPF). This marks a significant development in Malaysia's labour and social security framework.
📅 Enforcement Date
The new rule will take effect from October 2025 wages, with the first contribution deadline on 15 November 2025. Subsequent contributions must follow the same monthly schedule.
📜 Legal Background
This policy was introduced under the EPF (Amendment) Bill 2025, which was passed in the Dewan Rakyat on 6 March 2025 and later approved by the Dewan Negara. The bill amends the EPF Act 1991, making EPF contributions mandatory for foreign employees who were previously exempt unless they opted in voluntarily.
This legal reform was aligned with measures proposed in Budget 2024 and aims to strengthen retirement protection for all workers in Malaysia, regardless of nationality.
What Is the EPF?
The Employees Provident Fund (EPF), or KWSP, is Malaysia’s national retirement savings scheme. It collects contributions from both employers and employees, providing long-term financial security and benefits upon retirement, permanent departure, or in specific critical situations.
✅ Who Is Affected?
- Employers: All businesses that hire non-Malaysian employees (excluding domestic servants*) are required to register these workers with the EPF and ensure timely monthly contributions.
- Foreign Employees: Non-Malaysian workers (excluding domestic servants*) with valid work permits must now contribute 2% of their monthly wages, with an additional 2% paid by their employer.
📊 Contribution Rates & Payment Deadline
- Employer contribution: 2% of monthly wages
- Employee contribution: 2% of monthly wages
- Payment due date: By the 15th of the month following each wage month (e.g., October salary → by 15 November 2025)
🌍 Why This Matters
This initiative enhances social equity and retirement security for Malaysia’s growing foreign workforce. It also brings greater formality and transparency to the employment of foreign nationals, reducing risks associated with undocumented labour and unregulated employment terms.
📌 Action Steps for Employers
- Register your company and all eligible foreign employees with EPF if not already done.
- Update payroll systems to include the new 2% contribution structure.
- Inform foreign staff about the deductions and benefits of the EPF scheme.
- Ensure monthly contributions are submitted by the 15th of each month, starting with 15 November 2025.
📝 Final Thoughts
With the EPF (Amendment) Bill 2025 now in force, the mandatory 2% EPF contribution for foreign employees and their employers begins a new chapter in Malaysia’s employment landscape. Employers should act promptly to remain compliant and help their workforce transition smoothly into the updated retirement savings scheme.
*According to Section 3 of the Workmen's Compensation Act 1952, 'domestic servants' are individuals who work as, among others: Maids, Cooks, Gardeners, Cleaners, Babysitters, Drivers and others.