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.
Manufacturing · 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 manufacturing 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). 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 manufacturing 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.
Manufacturing-specific rules
Before you can hire, your foreign-worker quota must be approved through the One Stop Centre (OSC) under the Ministry of Human Resources. The quota sets how many foreign workers your manufacturing operation is allowed to employ, and it is the gate every later step depends on.[1]
Once a quota is in place, the Visa with Reference (VDR) application is submitted online through the Foreign Workers Centralised Management System (FWCMS) while the worker is still in their home country. This is the approval that lets the worker enter Malaysia to take up the job.[2]
Recruitment is limited to the source countries approved for the manufacturing sector, and eligibility is governed by the bilateral memoranda of understanding (MoU) currently in force. Not every approved source country is open for manufacturing — sector eligibility and active source countries change with policy and MoU status, so employers should confirm the current list with MOHA / the Immigration Department before recruiting.[3]
These rules shape the cost lines in the calculator: the quota and VDR steps sit behind the one-time agent fee and VDR charge, while the recurring levy, FOMEMA, insurance, SOCSO and EPF lines apply only once an approved worker is on your payroll.
Manufacturing under the 2026 multi-tier levy
Today, manufacturing 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 manufacturing 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] Foreign-worker quota for employers is approved through the One Stop Centre (OSC), Ministry of Human Resources. (.gov.my, 2026-05-31)
- [2] Visa with Reference (VDR) applications for foreign workers are submitted online through the Foreign Workers Centralised Management System (FWCMS). (.gov.my, 2026-05-31)
- [3] Manufacturing employers may recruit only from the source countries approved for the manufacturing sector; sector-by-country eligibility is governed by the bilateral MoUs in force, and not every approved source country is open to manufacturing. (.gov.my, 2026-06-02)