Govt defends mandatory 2% EPF contribution for foreign workers
Finance minister says 78,129 employers have started making the contributions, of which 86% are SMEs, reflecting their acceptance of the policy.
The Finance Ministry in Malaysia has stated that the two percent Employees Provident Fund (EPF) contribution rate for non-Malaysian workers is relatively low. This rate strikes a balance between providing social protection to workers and the financial burden placed on employers, particularly small and medium enterprises (SMEs). The government acknowledges the challenges faced by SMEs due to rising business costs.
Since October 2025, all employers have been required to contribute to the EPF for non-Malaysian workers under the Employees Provident Fund Act 1991. As of now, 78,129 employers have made contributions for 1,754,460 non-Malaysian workers, with 86 percent of these employers being SMEs. The ministry reported that the mandatory contribution requirement is gaining acceptance among employers, including SMEs.
This move is part of the government's broader strategy to expand social protection coverage to all workers in Malaysia, as seen in international practices. The government remains open to suggestions from various parties to further improve policies. They will continue to monitor the effectiveness of these measures and collaborate with SME associations and communities to ensure that aid reaches businesses in need.
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