Starting October 2025, all employers in Malaysia are required to make mandatory EPF (KWSP) contributions for non-Malaysian employees who hold valid work passes. This new rule ensures that foreign employees are included in the national social security framework, giving them access to retirement savings and related benefits.
What Employers Need to Know
- Both employers and employees must contribute 2% of the employee’s monthly wages to EPF.
- Contributions apply to all eligible non-Malaysian employees starting October 2025 wages.
- Employers should update payroll systems to reflect this new deduction and ensure timely remittance to EPF.
Why This Change Matters
- Inclusivity: Expands social security coverage to foreign workers.
- Compliance: Avoids penalties for late or missing contributions.
- Financial Security: Allows non-Malaysian employees to build retirement savings in Malaysia.
Pro Tip for Employers
- Review all employment contracts and payroll records to identify eligible foreign employees.
- Update your HR and payroll systems to automate EPF contributions.
- Ensure employees are informed about the deduction and their EPF accounts.
The inclusion of non-Malaysian employees in EPF contributions is a significant step toward broader social protection in Malaysia. Employers who prepare early can ensure compliance, avoid penalties, and support the financial security of their foreign workforce.
To know more, refer here.