He said the rate was lower than the initial proposal of 12%.

“There were some concerns that it (the contribution rate) might accumulate, starting at 2%, then increasing to 4% to 6%. That is not the case.

“We are keeping it at 2%, which is very minimal,” Bernama quoted him as saying at an Associated Chinese Chambers of Commerce and Industry of Malaysia’s Chinese New Year reception.

He said the Cabinet had considered feedback from various chambers of commerce before finalising the decision.

Tabling the 2025 budget last October, Anwar said the government planned to make EPF contributions mandatory for all foreign workers, with the plan to be implemented in phases.

EPF has since said the move is expected to benefit two million foreign workers, with mechanisms being put together to mandate foreign workers’ contributions to the fund.

Previously, foreign workers could voluntarily opt to contribute to EPF at a rate of either 11% for those aged below 60, or 5.5% for the rest. Employers contribute only RM5 under both schemes.

Following Anwar’s announcement, human resources minister Steven Sim said a bill to amend the EPF Act 1991 is expected to be tabled at the Dewan Rakyat meeting starting today.

Sim also said the rate, for both employees and employers, will remain in place until further studies are conducted to assess its suitability.

“Further details on implementing this mandatory contribution will be discussed at a Cabinet meeting,” he said in a separate statement.