Cost to Hire Foreign Worker in Malaysia: 2026 Breakdown
RM1,850. That is the number most employers memorize before hiring a foreign worker: the annual levy for manufacturing, construction, and services. The levy is rarely the biggest or most expensive number on the bill.
The total cost to hire a foreign worker in Malaysia ranges from approximately RM6,300 to RM10,000 per worker in Year 1, then decreases to RM4,500 to RM7,000 per worker in Year 2. The agent fee, the levy, and mandatory insurance are the three largest categories, and in most sectors, the agent fee outweighs the levy.
This is not the salary-plus-EPF-plus-SOCSO calculation most “cost of hiring foreign worker” articles run for Malaysian employees. Bringing in a foreign worker entails a distinct stack of at least 10 mandatory government-regulated costs, plus mandatory foreign worker insurance, most of which recur yearly.
This guide answers all the costs of hiring a foreign worker in Malaysia, verified against imi.gov.my, fomema2u.com.my, perkeso.gov.my, and einsuransmy.com.
Key Takeaways
- Year 1 total: RM6,300 to RM10,000/worker, excluding salary. Year 2+: RM4,500 to RM7,000.
- Biggest surprise: the agent fee (RM2,000 to RM5,000+) usually beats the levy as the largest Year 1 cost.
- FOMEMA is now annual for everyone: since 16 December 2023, no alternate-year exception. Budget RM223.56 (male) or RM234.36 (female) per worker.
- Insurance is cheap but critical: SPIKPA (RM120/worker/year before SST) plus FWIG (from RM50) costs less than a month’s levy, yet either lapsing blocks your FWCMS renewal.
- SOCSO and EPF scale with headcount: 1.75% and 2% (EPF, mandatory since October 2025) of monthly wages, per worker. Foreign workers also pay 0.75% LINDUNG 24 Jam (mandatory accident coverage, effective 1 June 2026), rising with tenure.
- Decision rule: under RM6,300/worker signals missed categories; over RM12,000 signals a fee worth renegotiating.
See our guide on employer requirements to hire foreign workers in Malaysia for the full compliance checklist; this article builds your hiring budget line by line.
The Complete Cost Stack
Source: Magnific
Foreign worker hiring costs fall into three buckets: one-time, annual recurring, and refundable deposits recovered at repatriation. The table below is the direct answer to all the costs of hiring a foreign worker in Malaysia: every mandatory fee, in one place.
| Cost Category | Type | Amount (RM) | Frequency | Source |
|---|---|---|---|---|
| Recruitment agent fee | One-time | 2,000 – 5,000+ | Per worker, at hiring | Market rate |
| VDR/eVDR processing | One-time | Likely no separate fee* | Per worker | imi.gov.my |
| Section 60K approval | One-time | Likely no separate fee* | Per employer | JTKSM / mohr.gov.my |
| Quota application (OSC) | One-time | Likely no separate fee* | Per employer | mohr.gov.my |
| Security bond | One-time, refundable | 250 – 1,500 | By nationality | imi.gov.my |
| Annual levy | Annual | 640 – 1,850 (Peninsular) | Per worker/year | imi.gov.my, moha.gov.my |
| SPIKPA/FWHS | Annual | 120 (before SST) | Per worker/year | einsuransmy.com |
| FWIG | Annual | From 50 | Per worker/year | einsuransmy.com |
| FOMEMA | Annual | 223.56 (Male) / 234.36 (Female) | Per worker/year | fomema2u.com.my |
| SOCSO (employer) | Annual | 1.75% of wage | Ongoing | perkeso.gov.my |
| LINDUNG 24 Jam (worker) | Annual | 0.75%-1.25% of wage, phased | Ongoing, from 1 June 2026 | perkeso.gov.my |
| EPF (employer) | Annual | 2% of wage | Ongoing | kwsp.gov.my |
| PLKS/VP(TE) renewal | Annual | 185 (60 + 125) | Per worker/year | imi.gov.my |
| Accommodation | Annual, variable | 100 – 300/month | Ongoing | Act 446 |
Government-regulated costs (levy, FOMEMA, insurance, SOCSO, EPF, PLKS) are fixed regardless of agent or platform, so the agent fee is the largest negotiable line item.
This excludes wages: minimum wage is RM1,700/month, and total cost is always salary plus every item above. The security bond is refundable via a Check Out Memo (COM), unlike the non-refundable levy.
Government Levy: Rates by Sector and Region
The annual levy in Peninsular Malaysia is RM1,850/worker for manufacturing, construction, and services, and RM640 for plantation and agriculture, per the Ministry of Home Affairs and Immigration Department.
| Sector | Peninsular Malaysia | Sabah & Sarawak |
|---|---|---|
| Manufacturing / Construction | 1,850 | 1,010 |
| Services | 1,850 | 1,490 |
| Plantation | 640 | 590 |
| Agriculture | 640 | 410 |
Sarawak adds a RM1,854 Foreign Workers Transformation Approach (FWTA) surcharge on top of its base levy: for manufacturing, RM1,010 + RM1,854 = RM2,864/worker/year, more than Peninsular Malaysia. Sabah does not apply this surcharge.
FWTA was only introduced in January 2026 and is currently under active review, with the Sarawak government studying possible fee revisions after pushback from ACCCIS and other industry groups (Borneo Post, July 2026); confirm the current rate before finalizing your budget.
The Multi-Tier Levy Model has not been gazetted as of July 2026; the levy is non-refundable and not deductible from wages.
Recruitment, Visa, and Security Bond Costs
Source: Magnific
Licensed recruitment agencies charge RM2,000 to RM5,000+ per worker, often exceeding the levy as the largest Year 1 cost. Engage only KDN-licensed agencies registered under JTKSM.
The eVDR (Calling Visa) via FWCMS, Section 60K approval (mandatory since 1 January 2023 under the Employment Act 1955), and the OSC quota application are all approval gates, not priced services; no official source lists a separate fee for any.
| Nationality | Security Bond (RM/worker) |
|---|---|
| Indonesia, Thailand, Cambodia | 250 |
| Bangladesh | 500 |
| Myanmar, Nepal, India, Pakistan, Sri Lanka | 750 |
| Philippines | 1,000 |
| Vietnam | 1,500 |
| China | 1,500 |
The bond is recoverable via a Check Out Memo on lawful repatriation, not a loss cost. Many employers use FWIG instead, from RM50/worker, to free up that cash.
Mandatory Insurance: SPIKPA and FWIG Costs
Mandatory insurance has two parts: FWHS/SPIKPA (RM120/worker/year before SST) and FWIG (from RM50), the cheapest costs here and a manageable line item, not a headache, yet either lapsing blocks your FWCMS renewal.
FWHS/SPIKPA (Foreign Worker Hospitalization and Surgical Scheme, or SKHPPA) covers hospitalization and surgical treatment only at government hospitals, up to RM20,000/year, excluding death, TPD, emergency outpatient care, and injuries from illegal acts.
Stamp duty (RM10) is per batch, not per worker. See our FWIG vs FWHS explainer. FWIG costs roughly 1% of the guarantee amount by nationality, RM50 minimum, and runs for 18 months.
How to purchase: select “Offline Purchase Insurance – Self insurance purchase” in FWCMS for an ITR, enter it, along with your SSM/TIN, on the eInsurans payment portal (auto-filled), then pay. FWCMS updates to “Insurance Purchased” automatically; no documents beyond ITR and SSM/TIN.
Valid for 14 days; covers an entire batch (with the same permit expiry date), not one worker at a time. The eInsurans Help Center and FWCMS purchase guide covers every screen
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FOMEMA, SOCSO, EPF, and PLKS
Four other annual costs apply: FOMEMA, SOCSO, EPF, and PLKS, adding roughly RM1,100-1,200/worker/year at minimum wage.
FOMEMA fees are RM223.56 (male) and RM234.36 (female), including 8% SST from 25 May 2026. Since 16 December 2023, screening is annual, no exceptions, fully online via portal.fomema.my. Find your nearest clinic via the clinic finder.
SOCSO is mandatory: 1.75% employer (Skim Bencana Kerja + Skim Keilatan), of wages (PERKESO schedule), roughly RM357/worker/year. Non-compliance risks a RM10,000 fine or 2 years’ jail.
Since 1 June 2026, foreign workers are also mandatorily enrolled in LINDUNG 24 Jam (24-hour accident coverage outside working hours), deducted from the worker’s own wages, not an added employer cost: 0.75% in Years 1-2, rising to 1.00% (Years 3-5) and 1.25% (Year 6 onward).
Combined with the existing 0.5% Skim Keilatan share, total worker deduction rises to 1.25% to 1.75% depending on tenure.
Since 1 October 2025, EPF is mandatory for foreign workers: 2% each side, roughly RM408/worker/year, the most recent change. PLKS/VP(TE) renewal costs RM185/worker/year (RM60 pass + RM125 processing).
| Cost Item | RM/Worker/Year (at RM1,700/month wage) |
|---|---|
| FOMEMA (average) | ~229 |
| SOCSO (1.75%) | ~357 |
| EPF (2%) | ~408 |
| PLKS renewal | 185 |
| Sub-total | ~1,179 |
Add the levy (RM1,850) and insurance (~RM170): manufacturing employers face roughly RM3,200/worker/year in government costs, before accommodation.
Accommodation, Transport, and Operational Costs
Source: Magnific
Act 446 compliance is not optional. Employers must provide accommodation, often a hostel, under the Employees’ Minimum Standards of Housing, Accommodations and Amenities Act 1990 (Act 446): RM100 to RM300/worker/month, the most variable cost here.
For 50 workers at RM150/month, that is RM90,000/year, the second-largest variable cost after the agent fee. Transport adds RM50 to RM150/worker/month. The agent fee, accommodation, and transport carry your negotiating leverage; everything else is fixed.
Your Total Cost: Year 1 vs. Year 2+ by Sector
For a manufacturing worker in Peninsular Malaysia (RM1,700/month wage, RM3,000 agent fee, RM150/month accommodation, RM500 bond), Year 1 costs approximately RM7,500-RM10,000. From Year 2 onward, it drops by 35% to 50%, to RM5,000 to RM6,500, since recruitment, visa, and bond costs do not recur.
| Sector | Levy | Year 1 Total (RM/worker) |
|---|---|---|
| Manufacturing/Construction/Services (Peninsular) | 1,850 | 7,500 – 10,000 |
| Plantation/Agriculture (Peninsular) | 640 | 6,300 – 8,800 |
| Year | Estimated Cost (RM, Manufacturing) |
|---|---|
| Year 1 | ~8,500 |
| Year 2 | ~5,500 |
| Year 3 | ~5,500 |
| 3-Year Total | ~19,500 |
Priority order: negotiate the agent fee, plan accommodation carefully, budget the rest at its fixed government rate.
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