Starting October 2025, employers and foreign employees in Malaysia must contribute 2% each to EPF. Learn who is affected, how to calculate contributions, and how to update your payroll system.
The Employees Provident Fund (EPF) in Malaysia has announced a major update: all foreign workers and their employers must contribute 2% each to EPF starting from the October 2025 payroll cycle.
This change impacts businesses hiring foreign employees in Malaysia, as employers will need to ensure compliance and update their payroll processes. Below, we break down the key details and frequently asked questions (FAQs) to help both employers and employees navigate this change smoothly.
When Will This Take Effect?
The new contribution requirement begins with the October 2025 payroll cycle. Employers must make the first payment by 15 November 2025.
Who Will Be Affected?
The mandatory 2% EPF contribution applies to:
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All foreign employees working in Malaysia
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Their employers
Exemptions
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Domestic workers
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Employees aged above 75 years old
How Much Will the Contribution Be?
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Employer contribution: 2% of the employee’s salary
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Employee contribution: 2% of their salary
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Calculation method: Basic salary × 2%, rounded up to the nearest Ringgit
Will BrioHR App Support This Update?
Yes. BrioHR will update our payroll system to support the 2% EPF contribution for foreign employees.
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Feature availability: By September 2025
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Manual assignment: HR/Admin users will need to manually assign the 2% contribution for foreign employees, but they can use the import feature in the Payroll module for faster updates. Refer to this article for the steps to the Bulk Payroll changes.
Can Companies Start Contributing 2% Now?
Yes. Employers can already set up this contribution:
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Go to Employee Profile > Payroll > Statutory Contributions
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EPF Contribution Type > Custom Rate > Overwrite > Set EE/ER: 2% > Save
Can Foreign Employees Contribute the Standard 11%?
Yes. Foreign employees can opt for the standard 11% employee contribution, similar to Malaysian employees.
To do so:
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Fill in KWSP 17A/18A form
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Employer submits the form to EPF
Do Employers Need to Register Their Foreign Employees?
Yes. If a foreign employee has never contributed to EPF before, employers must register them online with EPF before making contributions.
Official Sources
Frequently Asked Questions (FAQs)
1. When does the new EPF contribution rule for foreign employees start?
The rule takes effect from October 2025 payroll, with the first payment due by 15 November 2025.
2. What is the contribution rate for foreign workers?
Both employers and foreign employees will contribute 2% each, calculated on the employee’s salary.
3. Are there any exemptions?
Yes, domestic workers and employees aged above 75 are exempt.
4. Can foreign employees contribute more than 2%?
Yes. They may choose to contribute 11%, the same as Malaysian employees, by submitting KWSP 17A/18A through their employer.
5. Do employers need to register foreign employees for EPF?
Yes. Any foreign worker not already registered must be enrolled online with EPF by the employer.
6. Will BrioHR automatically apply the 2%?
No, admin of the accounts must manually assign the 2% contribution, though import features can simplify this process.