The government will keep the mandatory 2% EPF contribution for foreign workers, Finance Minister Anwar Ibrahim told the Dewan Rakyat, describing the rate as relatively low and the scheme as part of a wider effort to give every worker in Malaysia a basic retirement safety net.
He said the policy balances social security for migrant workers against the costs carried by employers, in line with international practice.
Since the requirement took effect in October 2025, 78,129 employers have started contributing for 1,754,460 foreign workers, he said. Of those employers, 67,194, or 86%, are small and medium-sized enterprises, meaning manufacturers with up to 200 workers and services and other firms with 75 or fewer.
Anwar, who is also prime minister, was replying to Jimmy Puah (PH-Tebrau), who asked whether the ministry was reconsidering the policy. In July, Deputy Prime Minister Ahmad Zahid Hamidi had said the government agreed to review the contribution to address business concerns. Anwar said the government would keep monitoring the scheme, engage with SMEs and remain open to proposals to improve it.
The law behind it
The contribution is made under the Employees Provident Fund Act 1991. Since October 2025, employers and their non-Malaysian employees each contribute 2% of monthly wages. The employer deducts the worker’s share from salary and pays both shares to the EPF. Domestic workers are excluded.
Failing to pay contributions is an offence under the Act, punishable by up to three years’ jail, a fine of up to RM10,000, or both. Late payments also attract charges.
Directors are exposed as well. Under section 46 of the Act, the directors of a company that fails to pay are jointly and severally liable for the unpaid contributions, and the courts have held that this can reach directors who took no part in running the business.
For employers, the practical step is to make sure every foreign worker on the payroll is registered with the EPF and that both shares are paid every month.