Will foreign workers’ EPF rate remain 2% for how long?

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Foreign Workers' EPF Contribution Rate to Remain at 2 Per Cent for the Time Being

Prime Minister Datuk Seri Anwar Ibrahim has confirmed that the mandatory Employees Provident Fund (EPF) contribution rate for foreign workers will be maintained at 2 per cent. This decision follows initial proposals for a higher rate and aims to address concerns regarding wage equity and the potential disadvantage to local employees. The current rate of 2 per cent will be sustained for an indefinite period, with any potential future adjustments dependent on broader economic improvements and the recommendation of the human resources minister.
Confirmation of the 2 Per Cent Rate

Prime Minister Datuk Seri Anwar Ibrahim has provided assurance that the mandatory EPF contribution for foreign workers will continue at the 2 per cent level. This rate was established following discussions where proposals for a 12 per cent contribution were considered. The Cabinet ultimately opted for the lower 2 per cent rate to mitigate concerns that had arisen.
Rationale Behind the Policy

The introduction of mandatory EPF contributions for foreign workers was announced during the tabling of the 2025 Budget in October. The policy is intended to foster wage equity and ensure that local workers are not placed at a disadvantage. Finance Minister II Datuk Seri Amir Hamzah Azizan indicated that the move is part of an effort to close the wage gap between local and foreign workers.
Duration of the Current Rate

The 2 per cent EPF contribution rate for foreign workers is set to remain in effect for an unspecified duration, described as "for some time until things are much better." Prime Minister Anwar indicated that the rate would be kept at this minimal level for the foreseeable future. Any decision to increase this rate would likely require a strong recommendation from the human resources minister, Steven Sim.

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Will foreign workers’ EPF rate remain 2% for how long?

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