Malaysia introduced an updated minimum wage rate of RM1,700 per month effective from February 2025 for most businesses, with full implementation by August 2025. This wage increase reflects Malaysia’s efforts to enhance living standards and promote fair compensation across sectors.
In addition, a 2% Employees Provident Fund (EPF) contribution requirement for foreign workers and employers was introduced under the Employees Provident Fund Amendment Bill 2025. This contribution applies to both employee and employer for foreign workers, offering retirement savings benefits that can be withdrawn upon completion of employment and return to home countries.
Employer Impact:
Employers must adjust payroll systems to align with these statutory changes and ensure compliance across wage practices
and EPF contributions. Kainan provides advisory support and payroll integration services custom-tailored to these regulatory requirements.
References:
• Malaysia minimum wage updated to RM1,700.
(https://www.aseanbriefing.com/news/malaysias-new-minimum-wage-rate-for-2025-what-employers-and-workers-need-to-know/)
• Mandatory 2% EPF contribution for foreign workers.
(https://www.thestar.com.my/business/business-news/2025/02/05/lower-epf-contribution-for-foreign-workers-reduces-overall-wage-expenditure)
• Sector calls to delay 2% EPF by manufacturers.
(https://www.malaymail.com/news/money/2025/03/23/as-costs-rise-manufacturers-push-to-delay-2pc-epf-contribution-for-foreign-workers/170535)
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