The Employees Provident Fund (EPF/KWSP) has officially announced that a significant new policy will soon take effect. Under this new regulation, mandatory EPF contributions will be extended to include all non-Malaysian employees working in Malaysia. This policy is being implemented to strengthen social protection for all workers and promote a more equitable labour market.

This change means that EPF contributions for non-Malaysian employees, which were previously voluntary, will now become mandatory. This is a critical development that all employers with foreign staff must understand and prepare for immediately.

Key Points of the New Policy

Here are the most crucial details of this new regulation:

• Effective Date:
  This rule will take effect starting with the October 2025 salary, which corresponds to the November 2025 EPF contribution month.

• Who is Affected?:
  All non-Malaysian employees who hold a valid passport and work permit in Malaysia.

  • The sole exception is: Domestic workers (servants/helpers) are not covered by this mandatory requirement.

• Contribution Rate:

  • Employer’s Share: 2% of the employee’s monthly salary.
  • Employee’s Share: 2% of the employee’s monthly salary.

• What About Existing Voluntary Contributors?
  If your non-Malaysian employees are already voluntarily contributing to EPF (for example, at a higher rate of 11% for the employee’s share), they can apply to maintain their existing contribution rate.

Action Plan for Employers

To ensure a smooth transition and full compliance with the new regulations, the EPF urges all employers to take immediate action:

1. Register Your Company: If your company was not previously registered with the EPF (e.g., if you had no local employees), you must now register immediately.
2. Update Employee Data: Ensure all your non-Malaysian employees’ information is accurate and prepare them for EPF registration and contribution.
3. Adjust Your Payroll System: Starting with the October 2025 salary, your payroll system must be able to accurately calculate and deduct the 2% employee’s share and account for the 2% employer’s share.
4. Contribute on Time: Ensure that EPF contributions for all non-Malaysian employees are made on time every month.

How SMONE Can Help

Managing payroll and compliance matters is our expertise. If you feel uncertain or need assistance in navigating this new policy, SMONE can provide comprehensive support:

• Assisting with the EPF registration for your company and non-Malaysian employees.
• Seamlessly updating your payroll processes to ensure all contributions are calculated accurately.
• Managing monthly on-time contributions, so you don’t have to worry about these complex administrative tasks.

Contact us today to ensure your business is fully prepared before the new policy takes effect and achieve compliance with ease.

(Disclaimer)

This article is for general informational purposes and summarizes the official announcement from EPF. It does not constitute legal or financial advice. We recommend consulting with a professional for advice tailored to your specific situation.