Snapshot

Starting 1 October 2025, every non-Malaysian working in the country on a valid pass must be enrolled in the Employees Provident Fund (EPF). A total 4% monthly contribution becomes mandatory—2% by the employer and 2% by the employee—with directors facing significant penalties for late or missing payments.

What changed and when

Parliament updated Part VIIA of the EPF Act 1991 via the EPF (Amendment) Act 2025—passed on 6 March 2025, gazetted 14 May 2025, and effective 1 October 2025. The new section 70A extends EPF coverage to “an employee who is not a Malaysian citizen” working in Malaysia on a temporary immigration pass.

Contribution rate & rounding: 2% employer + 2% employee of monthly wages, rounded up to the next ringgit (Part F, Third Schedule).

Withdrawal options: Foreign employees may withdraw their full balance upon death, permanent incapacity, permanent departure from Malaysia, or at age 55.

Transitional rule: Non-citizens who voluntarily contributed on or after 1 August 1998 automatically move to the new 2% + 2% regime.

Exemptions: Domestic servants, bona fide independent contractors, and legacy contributors who opted in before 1 August 1998 remain exempt; Permanent Residents continue under local rates.

Policy note: The Government reduced an initial 12% proposal to 2% after business feedback, aiming to align conditions with Malaysian employees and reduce undocumented work.

Key dates & penalties

• By 1 October 2025: Ensure all affected foreign hires have EPF numbers.
• 15 November 2025: First deadline to remit October payroll contributions with Form A (combined 4%).

Non-compliance risks: Dividend surcharges, fines up to RM10,000, and imprisonment up to three years. Under section 39, directors may face travel bans until arrears are cleared.

Our local Experts in Malaysia will be glad to answer any additional questions. Do not hesitate to contact us via email at [email protected] or by phone Tel: +601 66999095.

Discover More – Download the Malaysia Guide