Cost of hiring a foreign worker in Malaysia
All employer costs per worker, per year for the services sector — pick your sub-sector (restaurant, hotel, cleaning, retail, security, and more), then see the full levy, bond, FOMEMA, EPF, SOCSO, insurance and accommodation breakdown in one place.
Recruitment agent fee | RM 3,000one-time |
VDR (Visa with Reference) feeEstimate | RM 1,200one-time |
Security bondRefundableEstimate | RM 500one-time |
Annual levy | RM 1,850/ year |
FOMEMA medicalEstimate | RM 200/ year |
SPIKPA insuranceEstimate | RM 120/ year |
FWIG (insurance guarantee)Estimate | RM 50/ year |
PLKS / VP(TE) renewalEstimate | RM 60/ year |
SOCSO Employment Injury (employer) | RM 255/ year |
EPF (employer 2%) | RM 408/ year |
Accommodation (Act 446) | RM 1,800/ year |
EPF (employee 2%, deducted from wage) | RM 408/ year |
What goes into the cost?
The services sector covers a range of approved sub-sectors; select yours in the calculator to apply the correct figures. Hiring a foreign worker in services 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 levy is uniform across the approved services sub-sectors at RM 1,850 per year (Peninsular) or RM 1,490 (Sabah/Sarawak). 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 Employment Injury contribution (1.25%) are calculated from the monthly wage. The employee's 2% EPF share and 0.5% SOCSO Invalidity share are shown for reference only — they are deducted from the worker's wage and are not employer costs. SOCSO rates are effective 1 July 2024.
Across a multi-year services 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.
Services-specific rules
Hiring foreign workers in the services sector is restricted to eleven approved sub-sectors: restaurants, cleaning, cargo handling, launderettes, golf caddies, barbershops, wholesale/retail, textiles, metal/scrap recycling, welfare homes, and hotels/resorts. Employers in any other type of services business are not eligible to bring in foreign workers under this sector classification.[1]
Source-country eligibility also varies by role within services. India is permitted in the services sector only for specific occupations — cooks, wholesale/retail, barber, metal/scrap recycling, and textile. For other sub-sectors, or for roles not on that list, Indian nationals are not an available source and the employer must recruit from other countries approved for the relevant sub-sector.[2]
Services is in the higher levy band: RM 1,850 per worker per year in Peninsular Malaysia and RM 1,490 in Sabah and Sarawak. That Sabah/Sarawak rate is lower than the Peninsular figure but still sits above the plantation and agriculture levy. Because the levy is the single largest recurring cost line, sub-sector choice alone does not change the annual levy — it is uniform across all eleven approved services sub-sectors.
These rules translate directly into the calculator's cost lines. The one-time costs — the recruitment agent fee, the Visa with Reference (VDR), and the security bond — apply whenever you bring in a worker regardless of sub-sector. The recurring lines — levy, FOMEMA, SPIKPA, FWIG, PLKS renewal, SOCSO and employer EPF — run every year the worker is on your payroll. For employers in Sarawak, the FWTA fee is an additional recurring cost line unique to that state.
Services under the 2026 multi-tier levy
Today, the services sector pays a flat foreign-worker levy of RM 1,850 per worker per year in Peninsular Malaysia. That single rate applies uniformly across all eleven approved services sub-sectors, regardless of how many foreign workers the employer has on the payroll, and it is the figure the calculator uses.
The 2026 multi-tier levy (MTLM) has not yet been gazetted. Until the official gazette is published, no new rates are in force and the calculator continues to apply the current flat RM 1,850 levy for the services sector.
Once gazetted, the MTLM is widely expected to scale with a business's reliance on foreign labour rather than stay flat — meaning the per-worker levy would rise as a firm's foreign-worker dependency increases. Services businesses that employ large numbers of foreign staff relative to their total workforce could therefore face a higher effective levy rate than today. We will update the calculator as soon as the official rates are published.
Frequently asked questions
Compare another sector
- [1] Foreign workers in the services sector are limited to approved sub-sectors: restaurants, cleaning, cargo handling, launderettes, golf caddies, barbershops, wholesale/retail, textiles, metal/scrap recycling, welfare homes, and hotels/resorts. (.gov.my, 2026-05-31)
- [2] India is permitted in the services sector only for specific roles — cooks, wholesale/retail, barber, metal/scrap recycling, and textile. (.gov.my, 2026-05-31)