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Introduction
From October 2025, employers will be legally required to contribute to the Employees Provident Fund (EFP) for all non-Malaysian national employees. The first payment will be due on the 15th November 2025.
Impact
High
What has changed?
This important change to the regulatory requirements for employers of non-Malaysian nationals in Malaysia will be implemented from October 2025. Employers will be legally obliged to make a contribution to the EFP for all non-Malaysian employees who hold a valid passport, possess a valid employment related pass issued by the Immigration Department of Malaysia and receive wages in monetary form.
Employers hiring domestic workers are exempt from the legal requirement however, may choose to make voluntary contributions.
What to expect /impact?
The first contribution will be due on the 15th November 2025 at the following rates:
- Non-Malaysian PR or EPF members before 1 August 1998 – Same rates as Malaysians (Employer : 13% / 12%, Employee : 11%)
- Non-Malaysian employees joining after 1 August 1998 – Employer : 2%, Employee : 2%
Employers will have the following duties:
- Register eligible employees with EPF before October 2025
- Deduct employee contributions and remit on time
- Maintain accurate records and monitor work pass validity
- Facilitate withdrawals upon cessation or departure from Malaysia
Non-Malaysian employees will benefit from Retirement, housing, health, and education withdrawals, full withdrawal upon leaving Malaysia, and annual dividends and Shariah savings option.
The contributions will also impact Tax. Employee contributions eligible for tax relief (up to RM4,000/year), employer contributions deductible (up to 19% of remuneration) and withdrawals will be tax-free when leaving Malaysia.
Employers are advised to review their current workforce and payroll processes to ensure compliance. Failure to employ foreign nationals without valid employment passes or misclassifying employees may lead to penalties, audits and backdated contributions.
What you need to do
For further information on Malaysian immigration, please contact the Sterling Lexicon immigration team at [email protected]
