We are pleased to share important updates regarding employment tax developments that will significantly impact employers and employees in Malaysia. Effective 3 February 2025, the Malaysian Inland Revenue Board (MIRB) has launched the e-PCB Plus system, which mandates all employers to process the Monthly Tax Deduction (MTD) for January 2025 through this new integrated platform.
In conjunction with this development, Prime Minister Datuk Seri Anwar Ibrahim has introduced a new mandatory Employees Provident Fund (EPF) contribution rate of 2% for foreign workers, applicable to both employees and employers. This announcement, made on the same date, signifies a pivotal shift in the treatment of foreign labor in Malaysia. Additionally, the Minimum Wages Order 2024, gazetted on 4 December 2024, establishes a new minimum monthly wage of RM1,700, effective 1 February 2025.
These updates reflect the government’s commitment to improving the employment landscape in Malaysia. We urge all employers to familiarise themselves with these changes to ensure compliance and to leverage the benefits of the new systems and regulations.
e-PCB Plus system
The Malaysian Inland Revenue Board (MIRB) has announced on the MyTax portal that the e-PCB Plus system is fully operational effective 3 February 2025. With the official launching of the e-PCB Plus system, all employers are required to process the January 2025 Monthly Tax Deduction (MTD) via this new integrated system.
All employers and/or users of the e-PCB Plus system can also utilise the function MTD payment that is available in the system to remit MTD and check the payment status and payment history. Currently, employers may appoint tax agents as Employer Representatives in MyTax and e-PCB Plus Administrators to access the e-PCB Plus system.
EPF contribution for non-citizens
On 3 February 2025, Malaysian Prime Minister (PM) Datuk Seri Anwar Ibrahim announced that the mandatory Employees Provident Fund (EPF) contribution rate for foreign workers is set at 2%. Following the announcement made by the PM, the Ministry of Human Resources also announced in the media release on the same day that the proposal of the mandatory EPF contribution rate for workers is as follows:
| Employee (Foreign workers) | Employer | |
| EPF contribution rate | 2% | 2% |
More information on the implementation of this mandatory EPF contribution will be tabled in a Cabinet meeting before a bill to amend the EPF Act 1991 is presented in the Dewan Rakyat.
As no further information was disclosed as of now, we will share more information regarding this update once the authorities release their guidelines.
Minimum Wages Order 2024 Gazetted
Following the Minimum Wages Order 2024 [P.U.(A) 376/2024] gazetted on 4 December 2024, the minimum monthly wages of RM1,700 will apply for the following employers effective 1 February 2025: –
Please note that this Minimum Wage Order 2024 also applies to foreign workers but not domestic servants. Any non-compliance is an offence under the National Wages Consultative Council Act 2011 (Act 732) that may result in penalties.
How we can help
As a global mobility service provider, we are uniquely positioned to assist our clients in navigating the recent Employment Tax updates in Malaysia. Our expertise in compliance and regulatory matters ensures a seamless transition to the new e-PCB Plus system, facilitating accurate processing of Monthly Tax Deductions while minimising administrative burdens. We can provide guidance on the implications of the newly mandated EPF contributions for foreign workers, helping organisations understand their responsibilities and ensuring adherence to the forthcoming legislative changes. Additionally, we offer insights into the Minimum Wages Order 2024, ensuring that employers are fully compliant with the new wage requirements and avoiding potential penalties. By leveraging our comprehensive knowledge and resources, we empower clients to effectively manage their workforce while remaining compliant with evolving employment tax regulations.
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
Hilda Liow
Partner
Lim Phing Phing
Partner
Wee Lay Har
Director
Loh Zi-Lynn
Senior Manager
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