KUALA LUMPUR: The government has proposed to implement a mandatory two per cent Employees Provident Fund (EPF) contribution rate on foreign workers, said Prime Minister Datuk Seri Anwar Ibrahim.
He said the rate was lower than the initial proposal of 12 per cent.
“But there were some concerns that it might accumulate, starting at two per cent, then increasing to four and six per cent. That is not the case. We are keeping it at two per cent, which is very minimal,” he said during the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) Chinese New Year reception.
He added that the proposal would be discussed at the Cabinet level this week with the Ministry of Human Resources set to announce the details.
During the tabling of Budget 2025 last year, Anwar announced plans to make it compulsory for all non-citizen workers to contribute to the EPF as part of the government’s commitment to provide fair treatment to all workers regardless of nationality. “This proposal will be implemented in phases,” he told the Dewan Rakyat then.
Following the tabling of the budget, the Ministry of Finance (MoF) proposed that the EPF contribution rate become standardised for both Malaysians and foreigners with new employment contracts. This would mean that employees will contribute 11 per cent and employers will contribute 12-13 per cent.
Previously, the MoF had proposed the contribution rate for employees and employers of foreign workers with existing contracts start at 2.0 per cent and increase gradually over six years until it reaches the EPF contribution rate for Malaysian employees.
