By Admin
KUALA LUMPUR (Feb 3): The government has proposed to implement a mandatory 2% Employees Provident Fund (EPF) contribution rate for foreign workers, said Prime Minister Datuk Seri Anwar Ibrahim.
He said the rate is lower than the initial proposal of 12%.
“But there were some concerns that it might accumulate, starting at 2%, then increasing to 4% and 6%. That is not the case. We are keeping it at 2%, which is very minimal,” he said during the Associated Chinese Chambers of Commerce and Industry of Malaysia’s (ACCCIM) Chinese New Year reception.
The finance minister added that the proposal will 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 providing 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% and employers will contribute 12% to 13%.
Previously, the MOF had proposed the contribution rate for employees and employers of foreign workers with existing contracts start at 2% and increase gradually over six years until it reaches the EPF contribution rate for Malaysian employees.