In Malaysia, employers are required to contribute to 4 mandatory social benefit programs for their employees. These include:
the Employees Provident Fund (EPF), for both local and foreign employees;
Social Security Organization (SOCSO), for both local and foreign employees;
Employee Insurance Scheme (EIS),
and HRD Levy.
For Expats with Employment pass, it is mandatory to contribute to the Social Security Organization (SOCSO) and Employees Provident Fund (EPF) programs.
What is the Employee Provident Fund (EPF)?
The Employees Provident Fund (EPF) is Malaysia’s national retirement savings scheme managed by the EPF Board. It allows employees to accumulate savings through monthly contributions from both themselves and their employers, helping ensure financial security after retirement.
EPF Contributions for Non-Malaysian Employees
As part of a legislative update, EPF contributions are mandatory for non-Malaysian citizen employees working in Malaysia. This expansion takes effect starting with wages earned in October 2025, for the November 2025 contribution month.
Key details of the new regulation
Who’s included?
All foreign employees working in Malaysia who hold a valid passport and an employment pass issued by the Immigration Department of Malaysia.Contribution rates:
Employee: 2% of monthly wages
Employer: 2% of monthly wages
Effective date: Starting with October 2025 wages
EPF Payment Deadlines
In Malaysia, employers are required to submit and pay all statutory contributions, including EPF, by the 15th of the following month for the previous month’s wages—as stipulated under Malaysian law.
Once the contribution is submitted successfully, it typically takes 3 to 7 working days for the amount to be processed and reflected in the employee’s i-Akaun.
If the contribution has not appeared 10 or more working days after the payment deadline (i.e. beyond the 15th of the following month), employees are advised to contact both their employer and the EPF directly to initiate an investigation and ensure timely resolution.
How are the contribution amounts calculated?
The burden payment amount is based on actual incomes of employee for the month. However, there's a difference - besides the 1% HRD Levy as employer contribution, other burdens are paid based on your income range and the specific amount issued by the authority. Also, some of your income won't be used as the payment base. Please refer to the table below or to Horizon's Cost Simulator.
Employer Burden | Range or Rate | Base Exempted |
HRD LEVY | = [(Basic Salary +Fixed allowance] x 1% | Examples of payments excluded from HRD are non-monthly fixed income are:
|
EIS | Examples excluded from EIS and SOCSO contributions are:
| |
SOCSO | Examples excluded from EIS and SOCSO contributions are:
| |
EFP | Examples of payments excluded from EPF are:
|
New: SOCSO Skim LINDUNG 24 Jam (SKBBK) – Effective 1 June 2026
Effective 1 June 2026, the Malaysian Government has introduced a new scheme under SOCSO/PERKESO called Skim LINDUNG 24 Jam (SKBBK) as part of the Lindung Pekerja initiative. This scheme extends employee social protection beyond work-related incidents to provide 24-hour coverage, including accidents during personal activities or outside working hours.
This contribution is funded solely by employees (no additional employer contribution). The rates are implemented in phases as follows:
Phase 1 – First 2 years (from June 2026): 0.75% of monthly wages (employee contribution only)
Phase 2 – Following 3 years: 1.0% of monthly wages (employee contribution only)
Phase 3 – From year 6 onwards: 1.25% of monthly wages (employee contribution only)
This scheme applies to all employees in Malaysia, including:
Malaysian employees below and above the age of 60
Non-Malaysian employees
Please note: As a result of this change, employees will see a reduction in their net take-home pay starting from June 2026.