Employees Navigating the New EPF Contribution Policy for Foreign Workers in Malaysia
On February 2025, Malaysia’s government announced a groundbreaking change in its labor policy that directly impacts foreign workers— a move that is both a step towards social protection and a shift in how employers handle contributions to the Employees Provident Fund (EPF). The new regulation mandates that foreign workers in Malaysia contribute 2% of their monthly earnings to the EPF. Employers are also required to match this contribution, which will result in a total of 4% of the worker’s salary being deposited into the EPF account.
How Malaysia’s Payroll Updates Impact Remote Workers and International Employees
The rapid global expansion of remote work has given rise to numerous complexities, especially when it comes to payroll and compliance. As businesses in Malaysia increasingly employ remote workers from around the world, recent payroll updates in the country are having significant implications for international employees, particularly those working from overseas. These changes bring about new challenges, particularly in areas like tax calculations, statutory contributions to the Employees Provident Fund (EPF), Social Security Organization (SOCSO), and more. In this blog, we’ll explore how Malaysia’s payroll updates are affecting remote workers and international employees, and the important considerations that Malaysian employers must keep in mind.
The Future of Payroll in Malaysia: Trends to Watch in 2025 and Beyond
Payroll management in Malaysia, as with the rest of the world, is undergoing significant transformation. As businesses adapt to the evolving digital landscape, the future of payroll in the country looks set to be shaped by several dynamic trends. From automation and artificial intelligence (AI) to more personalized employee benefits and regulatory shifts, businesses must stay attuned to these changes to remain competitive, compliant, and efficient.
Malaysia Budget 2025: A Bold Step Towards Social Inclusion, Fair Wages, and Enhanced Retirement Savings
The Malaysian government’s Budget 2025 is a forward-looking set of initiatives aimed at improving the welfare of the nation’s workers, encouraging social inclusion, and enhancing the financial security of all citizens, especially in retirement. Among the key highlights, the government has outlined several measures that focus on raising the minimum wage, increasing opportunities for marginalized groups, and boosting retirement savings for individuals outside the formal employment system. In this post, we will take a closer look at these significant measures and their potential impact on workers, businesses, and the Malaysian economy at large.
Streamlining Payroll Management in Malaysia: A Comprehensive Guide to e-PCB Plus
Managing payroll and tax deductions for employees is one of the most critical administrative tasks for any business. The process requires accuracy, timeliness, and adherence to tax laws to avoid penalties or compliance issues. Recognizing the challenges faced by employers and payroll administrators, Lembaga Hasil Dalam Negeri (LHDN) has introduced the e-PCB Plus system, a modernized platform designed to replace the outdated PCB (Potongan Cukai Berjadual) system. This transition brings numerous benefits, including automation, increased accuracy, and enhanced efficiency in managing monthly tax deductions.
Enhancing Retirement Security: Malaysia EPF’s Comprehensive Account Restructuring Initiative
The Employees Provident Fund (EPF) has taken a significant step to ensure the financial well-being of its members by restructuring their accounts. Effective from 11 May 2024, this initiative is designed to enhance income security post-retirement while also addressing current life cycle needs. This restructuring will transform the existing two-account system into a more nuanced three-account structure. The new system aims to provide members with greater flexibility and control over their savings.
