Latest Foreign Worker Levy Rates in Malaysia

Starting January 1, 2017, the Human Resources Ministry required that all employers must cover the levy for migrant staff to ensure legal employment and steady workforce management.

The rule applies to both newly hired personnel and those renewing a Temporary Employment Visit Pass (PLKS). Employers must sign an Employers Undertaking to confirm levy payment and compliance with regulations.

By standardizing rates, the government aims to better manage the influx of low-skilled labor and protect local workforce planning. Understanding these costs helps any business budget correctly and avoid strict penalties.

Clear planning and timely payments keep operations lawful and reduce disruption.

Key Takeaways

From Jan 1, 2017 employers are responsible for levy payments for migrant staff.
The requirement covers new hires and PLKS renewals.
Signing the Employers Undertaking formalizes payment and legal duties.
Standardized rates help the government manage workforce inflows.
Businesses must include these costs to avoid penalties and protect operations.

Understanding the Foreign Worker Levy Malaysia Policy

Today, businesses cover the cost to ensure proper documentation and steady workforce planning. The Human Resources Ministry made this change so employers must handle levy payment and reduce gaps in employment oversight.

foreign worker levy

The rule applies when hiring foreign workers from approved countries such as Indonesia, Nepal, and the Philippines. Employers must also secure the correct visa and work permit for each hire.

Employers bear the full cost to promote ethical foreign worker employment today.
Only nationals from approved countries may be placed in permitted sectors.
Managing the worker levy is part of routine business operations and compliance.
The policy ensures every worker has the right visa and permit for their role.
Centralized levy payments simplify administration for firms hiring foreign staff across sectors.

Stay current with human resources updates so your business follows regulations, avoids fines, and keeps operations running smoothly.

Current Levy Rates Across Different Sectors and Regions

Knowing exact rates by sector and state helps employers plan payroll and compliance costs.

Breakdown for Peninsular Areas

Manufacturing, construction, and services are set at RM1,850 per person. This rate applies across those major sectors to standardize costs.

Plantation and agriculture are lower at RM640. These levels reflect sectoral differences in demand and skill needs.

foreign worker levy

Breakdown for Sabah and Sarawak

In Sabah and Sarawak, the rate for manufacturing and construction is RM1,010. The services sector is RM1,490.

Plantation is RM590 and agriculture is RM410. These regional rates help local employers budget correctly.

“Clear rate tables reduce surprises and speed up approvals.”

All applications for foreign workers must be sent to the One Stop Centre at the Ministry of Home Affairs for official approval.
Each sector must follow these specific rates to secure legal employment and smooth workforce management.

Employer Obligations and Compliance Requirements

Companies must follow strict steps to register, insure, and medically clear each hire to avoid penalties and protect staff health.

Mandatory Insurance and Protection

Employers must provide full coverage for every foreign workers’ protection. This includes SOCSO, SKHPPA, and FWIG.

These schemes protect both staff and business operations. Keeping payments current is essential.

Medical Check-up Procedures

All workers need annual health checks via FOMEMA registration. Employers must keep medical records up to date.

Valid reports are required to maintain each visit pass and visa. Missing checks can halt employment status.

Legal Consequences of Non-Compliance

Failing to meet insurance, medical, or registration rules risks fines, permit revocation, and disrupted operations.

Employers must maintain timely payments and documentation to protect the workforce and avoid enforcement action.

Conclusion

, Keeping pace with rate updates prevents surprises in payroll and legal obligations. Employers who track the current rates and follow regulations keep employment stable and predictable.

Key actions include timely payment of the levy, maintaining insurance and medical records, and checking sector-specific rates. This protects both the business and the workers and supports smooth workforce management.

Stay informed about the foreign worker levy and the level set for each sector today. That diligence helps maintain fair practices, reduces risk, and supports long-term operational integrity across the country.

FAQ

What are the latest levy rates for hiring foreign staff across sectors?

Rates vary by sector and region. Manufacturing and services typically have different charges than construction and plantations. Employers should check the official Immigration Department or Ministry of Human Resources portals for current monthly and yearly fees, and factor in regional differences for Peninsular Malaysia versus Sabah and Sarawak.

How does the policy on hiring non-citizen labor work?

The policy sets rules for recruitment, visa or pass applications, and employer registration. Companies must apply for approval before bringing in personnel, complete permit paperwork, and comply with reporting and payment schedules. Human resources teams often work with licensed agents to ensure documentation meets government requirements.

Are rates different in Peninsular Malaysia compared to Sabah and Sarawak?

Yes. Authorities set separate schedules for Peninsular Malaysia and for Sabah and Sarawak. These reflect local economic needs and sectoral priorities. Always confirm the applicable rate table for the specific state where operations will be located.

What obligations do employers have when hiring overseas staff?

Employers must register with the relevant agencies, pay applicable charges on time, secure the appropriate pass or permit, and maintain records. They must also provide safe working conditions and meet employment law requirements such as wages and working hours.

Is insurance required for hired non-citizen employees?

Yes. Mandatory insurance and protection plans often include medical coverage and personal accident insurance. Employers must present proof of insurance during permit applications and renewals to protect the workforce and to meet regulatory checks.

What medical checks are required before employment starts?

Candidates usually need pre-employment medical screenings, including tuberculosis and infectious disease checks, plus general health assessments. Tests must be carried out at designated clinics and submitted with permit applications.

What happens if an employer fails to comply with payment or registration rules?

Non-compliance can lead to fines, permit revocation, deportation of employees, or bans on future hiring. Criminal charges may apply for serious breaches. Companies should maintain timely payments and accurate records to avoid penalties.

How often do rates and rules change, and where can employers get updates?

Government rates and regulations can change annually or as policy needs evolve. Employers should monitor the Immigration Department, Ministry of Human Resources announcements, and official gazettes. Subscribing to industry newsletters or consulting with payroll and compliance services helps stay current.

Can businesses hire through agencies to simplify compliance?

Yes. Licensed recruitment and payroll agencies can handle applications, pass processing, and payment filings. Ensure the agency is registered and experienced in sector-specific rules to reduce risk and administrative burden.

Are there exemptions or incentives for certain industries or skill levels?

Some sectors or strategic projects may qualify for exemptions, reduced rates, or special approval processes. Skilled positions and companies contributing to national priorities might get different treatment. Confirm eligibility with relevant ministries before applying.