Updated 6 Oct 2026 · Full Employer Cost Breakdown

Foreign Worker Total Cost of Hiring Guide (2026)

The annual levy is the line item most employers budget for — but it's one of six or more employer costs required to legally hire a foreign worker in Malaysia. This guide breaks down the security bond, EPF, SOCSO, and other statutory costs that sit alongside the levy, so nothing surprises your budget after quota approval.

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RM1,850/640Annual Levy (by Sector)

RM300–1,500Security Bond (Source Countries)

2%+2%EPF (Employer + Worker)

1.75%SOCSO (Employer Share)

The Full Cost Stack

Every employer cost of hiring a foreign worker in Malaysia

Costs fall into three types: annual/recurring, monthly/payroll, and one-time. All are employer-borne — none may be deducted from a worker's wages. The only worker-paid payroll items (their own EPF, Invalidity Scheme and LINDUNG 24 JAM shares) are covered in the payroll section below.

Cost	Amount	Frequency
Foreign worker levy	RM1,850/year (manufacturing, construction, services, mining) or RM640/year (plantation, agriculture)	Annual, recurring
Security bond / bank guarantee	RM300–RM1,500 for common source countries, set by worker's nationality — see table below	Lodged when the permit is applied for; cash or bank guarantee refundable on lawful repatriation
EPF contribution	2% of monthly wages, employer share (worker contributes a matching 2%)	Monthly, recurring
SOCSO contribution	1.75% of monthly wages, employer share (1.25% Employment Injury + 0.5% Invalidity)	Monthly, recurring
FOMEMA medical examination	Set by FOMEMA's fee schedule	Annual, recurring (initial + yearly renewal)
Recruitment / agency service	Employer-funded under Andaraya's zero-fee-to-worker policy — contact us for a quote	One-time
VDR (Calling Visa) processing	Set by Immigration Department's visa fee schedule	One-time
Foreign worker health insurance (SPIKPA)	Premium set by the insurance scheme — confirm the current premium before budgeting	Annual, recurring
Act 446 hostel / accommodation	Varies by property and certification stage — see our Act 446 guide	Setup + ongoing

*** Rates are subject to government revision. We confirm current rates and fees before processing any payment on your behalf. The proposed multi-tier levy (MTLM) has not been gazetted, so budget against the flat levy rates above until it is.

Security Bond

Security bond rates by worker nationality

Unlike the levy, the security bond is set by the Immigration Department according to the worker's nationality, not their sector. It is lodged as a cash deposit, bank guarantee or insurance guarantee (FWIG). A cash deposit or bank guarantee is refundable once the worker is lawfully repatriated via a Check Out Memo; an insurance guarantee costs a premium instead of tying up the full amount (minimum RM50 per guarantee, varying by nationality and guarantee period).

Source Country	Security Bond (per worker)
Indonesia	RM500
Thailand	RM300
Vietnam	RM1,500
Bangladesh, Nepal, Myanmar, India, Pakistan, Philippines & other approved source countries	RM1,500 (standard rate for countries not individually listed)

Source: Immigration Department of Malaysia, Security Bond/Bank Guarantee Rates schedule (imi.gov.my). Confirm the current rate for your worker's specific nationality before budgeting, as this schedule is set by Immigration and can change. The full schedule runs from RM200 (Singapore) to RM2,000 (certain non-source countries); the rates above are the ones that apply to Andaraya's source countries.

Payroll Contributions

EPF, SOCSO & LINDUNG 24 JAM for foreign workers

EPF — Mandatory Since October 2025

Employers must contribute 2% of monthly wages to EPF for every non-Malaysian employee (excluding domestic workers), matched by a 2% worker contribution. This replaced the previous voluntary arrangement, effective from the October 2025 payroll cycle.

SOCSO — Employer 1.75%

Employers contribute 1.25% of monthly wages for Employment Injury Scheme coverage (in effect since 2019) plus 0.5% for Invalidity Scheme coverage (extended to foreign workers from 1 July 2024) — 1.75% total employer share, with a further 0.5% worker contribution for the Invalidity Scheme only.

LINDUNG 24 JAM — Worker-Paid

PERKESO's non-work accident scheme (SKBBK) has been mandatory for foreign workers since 1 June 2026, and it became voluntary for Malaysian employees on 8 July 2026. The worker bears the full contribution (0.75% of monthly wages in the first phase) and the employer deducts it and remits it to PERKESO, with no employer share.

Wage Ceiling

SOCSO contributions are calculated against a wage ceiling of RM6,000/month, in effect since 1 October 2024. Wages above this ceiling do not increase the SOCSO contribution.

Registration Deadline

Foreign workers must be registered with SOCSO within 30 days of their employment start date, and with EPF before the first applicable contribution is due.

FAQ

Employer Cost FAQ

Can any of these costs be deducted from a worker's wages?

No. The levy, security bond, recruitment/agency fee, and employer's EPF and SOCSO shares are all employer obligations under Malaysian labour law and the RBA Employer Pays Principle. Only the worker's own EPF (2%), Invalidity Scheme (0.5%) and LINDUNG 24 JAM (0.75% in the first phase) contributions come out of their wages.

Why does the security bond vary by nationality instead of sector?

The bond is an Immigration Department instrument tied to the worker's home country and repatriation risk, unlike the levy, which is set by economic sector regardless of nationality. Both apply to every worker.

Is the security bond a sunk cost?

Not if it is lodged as a cash deposit or bank guarantee: it is refundable once the worker is lawfully repatriated through a Check Out Memo, and forfeited if a worker absconds or repatriation isn't completed correctly. If you use an insurance guarantee (FWIG) instead, the premium is a cost.

Do these costs apply from the worker's first day, or only after PLKS issuance?

The security bond and levy are settled before VDR (Calling Visa) issuance, before the worker travels to Malaysia. EPF, SOCSO and LINDUNG 24 JAM contributions begin once the worker is employed and on payroll in Malaysia.

Is LINDUNG 24 JAM compulsory for foreign workers, and who pays?

Yes. LINDUNG 24 JAM, PERKESO's non-work accident scheme, has been mandatory for foreign workers since 1 June 2026, and unlike Malaysian employees (voluntary since 8 July 2026) they cannot opt out. The worker bears the full contribution, 0.75% of monthly wages in the first phase, and the employer deducts it and remits it to PERKESO. There is no employer share.

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