Foreign Worker Levy Rates and the Multi-Tier Levy

Start with the thing that makes this topic hard to research: there is no foreign worker levy instrument.

Search the federal gazette for “levi” or “levy” and you get the CIDB levy, the HRD Corp levy, the departure levy, the windfall profit levy — and nothing about foreign workers. That is not an indexing failure. What everyone calls the levy is legally a fee under s.3 of the Fees Act 1951, imposed by the Fees (Employment Pass, Visit Pass (Temporary Employment) and Work Pass) Order 1998, P.U.(A) 479/1998. The word “levy” does not appear in it.

The operative rates sit in Schedule I, substituted wholesale by P.U.(A) 67/2016, in force 18 March 2016. They are stated per month. Every “annual levy” figure in circulation is that monthly figure multiplied by twelve.

Levy rates by sector

Annual, per worker, as gazetted and as published by Immigration:

Sector	Peninsular Malaysia	Sabah, Sarawak and Labuan
Manufacturing	RM1,850	RM1,010
Construction	RM1,850	RM1,010
Services	RM1,850	RM1,490
Services (island resort)	RM1,850	RM1,010
Plantation	RM640	RM590
Agriculture	RM640	RM410
Domestic helper — first	RM410	RM410
Domestic helper — second and subsequent	RM590	RM590
All other work	RM1,850	RM1,490

Two additional charges ride alongside: a RM125 processing fee per application and a RM60 pass fee for the Visit Pass (Temporary Employment). The entry visa and the security bond are separate again, and both are keyed to nationality rather than sector.

Note that the gazette groups Labuan with Sabah and Sarawak, not with the Peninsula — an easy and expensive mistake for anyone budgeting a Labuan operation.

And note what has not happened: Schedule I has not been amended since 18 March 2016. The chain of amending orders to P.U.(A) 479/1998 runs 172/2011, 79/2014, 67/2016, 1/2017, 241/2018, 2/2019, 122/2019, 145/2020, 354/2020, 258/2021, 4/2022 and 231/2023 — and stops there. There is nothing after 1 August 2023. Ten years of unchanged sector rates is itself the story.

The two schedules nobody quotes

Malaysia already has a tiered levy. It is tiered by length of employment, not by workforce dependency — which is why the market keeps waiting for a “tiered levy” that in one form already exists.

Schedule IA — the eleventh year onwards. Introduced by P.U.(A) 241/2018 at RM10,000 a year, then reduced by P.U.(A) 122/2019 with effect from 30 April 2019 to RM500 a month, RM6,000 a year, and RM166.67 a month, RM2,000 a year for plantation and agriculture. The same figures apply in both regions. Given that the maximum employment period is ten years, this schedule catches precisely the extension cases.

Schedule IB — special programmes. A flat RM1,500 per pass for employers participating in a special programme such as a recalibration exercise, under P.U.(A) 231/2023, in force 1 August 2023.

Who is legally liable

The employer. And the date matters, because almost every published guide gets it wrong.

P.U.(A) 1/2017, in force 1 January 2017, amended paragraph 3 of the principal Order to substitute “An Employment Pass holder” with “An employer of the Employment Pass holder”, and deleted the words “to him”. The paragraphs inserted later leave no room at all: paragraph 3A says “any employer who makes an application to extend a Visit Pass (temporary employment) … shall pay the fees”, and paragraph 3B says “any employer of the Visit Pass (temporary employment) holder … shall pay the fees”.

So employer liability has been gazetted since 1 January 2017. The 1 January 2018 date repeated across HR guidance is the date the Ministry of Human Resources stated the policy, not the date the law changed. The often-cited “Cabinet decision of 25 March 2016” could not be traced to any official source at all.

On deductions, the position is more subtle than the market states. There is no express statutory ban on deducting the levy from a worker’s wages. What there is instead is s.24 of the Employment Act 1955, a closed list: subsection (1) prohibits every deduction the Act does not authorise, and subsection (2) permits only overpayment recovery, s.13(1) indemnity, s.22 advances, and deductions authorised by other written law. The levy appears nowhere in Act 265. The deduction is therefore unlawful by omission, which is exactly why nobody can ever cite the provision that forbids it.

When it is paid

Per month, charged on issuance and again on each renewal, pro-rated to the period of the pass — paragraph 3A puts it as “the fees shall be payable in accordance with the period of the Pass issued”. The pass runs twelve months.

There is an unresolved conflict on timing for new applications. Immigration states that the approval letter is issued only after the employer makes the levy payment within two days. ePPAx states within 30 days of quota approval. Two official systems, two deadlines; work to the shorter one.

Renewals are paid to Immigration with the pass extension, in cash or by bank draft to the Director General of Immigration Malaysia.

Has the multi-tier levy been gazetted?

No. As at July 2026, no instrument implementing a Multi-Tier Levy Mechanism has been gazetted, and it is not in force.

That negative is the answer most searchers actually want, and it is stated plainly nowhere else. The evidence for it is threefold: an exhaustive gazette search returns no P.U.(A) or P.U.(B) matching a foreign worker levy in any of the obvious title forms; the amendment chain for the governing fees order stops at P.U.(A) 231/2023; and Schedule I still reads as it did in 2016.

The announcement history explains why so many people believe otherwise:

When	Where	What was said
2019	Ministerial announcement	Multi-tier levy from 1 January 2020, rates withheld pending Cabinet
2024	Recorded in RMK-13	The mechanism was approved in 2024
18 Oct 2024	Budget 2025 speech	Government proposes to implement it early the following year — no rates given
31 Jul 2025	Thirteenth Malaysia Plan	MTLM will be implemented in 2026; proceeds to a trust fund for automation
10 Oct 2025	Budget 2026 speech	No mention at all

Approved is not gazetted, and planned is not in force. The design that has circulated — rates escalating with the ratio of foreign workers to total workforce — comes from a 2021 policy paper that was never given legal effect, and the figures attached to it should not be used for budgeting.

The strongest current signal is the silence. With half of 2026 gone and no amendment to Schedule I in sight, a 2026 commencement would require an instrument that has not appeared.

Common mistakes

Searching the gazette for “levy”. It is a fee under the Fees Act 1951 and the word never appears.

Quoting the annual figure as though it were gazetted. The gazette states monthly rates; the annual number is arithmetic.

Putting Labuan on Peninsular rates. The gazette groups it with Sabah and Sarawak.

Attributing employer liability to a 2018 Cabinet decision. It was gazetted on 1 January 2017 by P.U.(A) 1/2017.

Citing ePPAx for rates. Its own FAQ publishes a manufacturing figure that contradicts both the gazette and Immigration.

Treating the multi-tier levy as live. It is approved and announced, and it is not law.

What’s next

Budget on the gazetted rates, not the announced ones, and put a watch on Schedule I of P.U.(A) 479/1998 rather than on ministerial statements — the amendment order is the only thing that will actually change your cost base.

If you employ anyone approaching their eleventh year, check Schedule IA now. That tier is already in force and has been since 2019.