Cost of hiring a foreign worker in Malaysia
All employer costs per worker, per year — levy, bond, FOMEMA, EPF, SOCSO, insurance, PLKS and accommodation in one place.
Construction · Peninsular Malaysia · 6 workers
- LevyRM 11,10019%
- Agent / recruitmentRM 18,00031%
- Permits & medicalRM 9,88217%
- Statutory (EPF + SOCSO)RM 4,5908%
- AccommodationRM 10,80019%
- Security bondRM 3,0005%
Recruitment agent fee | RM 3,000 |
VDR (Visa with Reference) feeEstimate | RM 1,200 |
Security bondRefundable | RM 500 |
Annual levy | RM 1,850 |
FOMEMA medicalEstimate | RM 217 |
SPIKPA insuranceEstimate | RM 120 |
FWIG (insurance guarantee) | RM 50 |
PLKS / VP(TE) renewalEstimate | RM 60 |
SOCSO Employment Injury + Invalidity (employer 1.75%) | RM 357 |
EPF (employer 2%) | RM 408 |
Accommodation (Act 446) | RM 1,800 |
EPF (employee 2%, deducted from wage) | RM 408 |
SOCSO Invalidity (employee 0.5%, deducted from wage) | RM 102 |
What goes into the cost?
Hiring a foreign worker in construction carries one-time costs (recruitment agent fees, the Visa with Reference, and a refundable security bond) and recurring annual costs (the foreign worker levy, FOMEMA medical screening, SPIKPA insurance, the FWIG insurance guarantee, PLKS pass renewal, SOCSO, employer EPF, and accommodation under Act 446). Workers on CIDB-licensed building and civil works projects must be registered with CIDB. The calculator separates one-time from recurring costs so the multi-year projection reflects what you actually pay each year.
Employer EPF (2%) and the employer's SOCSO contribution are calculated from the monthly wage. Since 1 July 2024, foreign workers under 55 are covered under SOCSO First Category — the employer pays 1.75% (1.25% Employment Injury + 0.5% Invalidity) and the worker pays 0.5% (Invalidity). The employee's 2% EPF share and 0.5% SOCSO share are shown for reference only — they are deducted from the worker's wage and are not employer costs.
Across a multi-year construction hire the one-time costs land almost entirely in year one. The recruitment agent fee, the Visa with Reference (VDR) and the security bond are paid up front to bring the worker in, while the levy, FOMEMA, SPIKPA, FWIG, PLKS renewal, SOCSO, employer EPF and accommodation repeat every year the worker stays. That is why the first-year total per worker is higher than each later year, and why the projection adds only the recurring lines from year two onward.
The security bond is shown as a first-year cash outlay but it is not a true expense: it is a refundable banker's-guarantee deposit that the employer recovers once the worker is repatriated and there are no outstanding liabilities. The calculator flags it as refundable so you can see your real net cost — the levy and the other recurring lines are the figures that actually leave your books each year.
Construction-specific rules
Applications to bring foreign construction workers into Malaysia are channelled through the Construction Labour Exchange Centre Berhad (CLAB). CLAB acts as the single point of entry for employer applications in the construction sector, coordinating with CIDB and the relevant authorities throughout the process.[1]
Every foreign construction worker must hold a CIDB Green Card — formally known as the Construction Personnel Card — before starting work on a construction site. Registration for the Green Card is facilitated by CLAB, which handles the process alongside the worker's PLKS renewal and any required site-safety training.[2]
Construction pays the higher foreign-worker levy band of RM 1,850 per worker per year in Peninsular Malaysia. Before a worker can set foot on site, the employer must complete the CLAB application and CIDB Green Card registration steps; only once those are done does the worker become site-ready and the annual cost lines — levy, FOMEMA, SPIKPA, FWIG, SOCSO and EPF — begin running.
These rules map directly to the calculator's cost structure. The CLAB application and CIDB Green Card registration sit behind the one-time agent fee and VDR charge in the first-year total. From the second year onward, only the recurring lines — levy, FOMEMA, SPIKPA, FWIG, PLKS renewal, SOCSO, employer EPF, the Sarawak FWTA fee (where applicable) and accommodation — continue.
Construction under the 2026 multi-tier levy
Today, construction pays a flat foreign-worker levy of RM 1,850 per worker per year in Peninsular Malaysia. That single rate applies regardless of how many foreign workers a firm employs, and it is the figure the calculator uses for the construction sector.
The 2026 multi-tier levy (MTLM) has not yet been gazetted. Until it is, no new rates are in force and the calculator keeps using the current flat levy.
Once gazetted, the MTLM is expected to scale with a firm's reliance on foreign labour rather than stay flat — meaning the per-worker levy would rise as a company's foreign-worker dependency increases. We will update the calculator when the official rates are published.
Frequently asked questions
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- [1] Applications to bring in foreign construction workers are channelled through the Construction Labour Exchange Centre Berhad (CLAB). (.gov.my, 2026-05-31)
- [2] Foreign construction workers register for a CIDB Green Card (Construction Personnel Card) through CLAB, the route CIDB uses for the construction-personnel credential. (non-gov source, 2026-05-31)