Key takeaways
- Every foreign worker in Malaysia needs SPIKPA hospital insurance, a security bond with Immigration (cash, bank guarantee or insurance guarantee) and PERKESO registration, all arranged by the employer.
- SPIKPA costs RM120 per worker a year according to the Ministry of Health and pays only for admission to non-corporatised government hospitals, up to RM20,000 a year per worker on Great Eastern's scheme.
- The security bond depends on nationality, from RM250 for Indonesian, Thai and Cambodian workers to RM1,500 for Vietnamese workers, and an insurance guarantee used for a work pass extension must be valid for at least 18 months.
- PERKESO has covered foreign workers for work injuries since 1 January 2019, invalidity since 1 July 2024 and accidents outside work since 1 June 2026; the employer pays 1.75% of wages and the worker 1.25%.
- Immigration does not renew a PLKS while the worker still owes Ministry of Health hospital or clinic bills, so check and settle them first, ideally 3 months before the pass expires.
- Since October 2025 wages, EPF is also compulsory for non-Malaysian employees with a valid work pass (domestic workers excepted): 2% from the employer and 2% from the worker.
What insurance must an employer buy for foreign workers in Malaysia?
Foreign worker cover in Malaysia is not one policy. It is a set of separate requirements from different agencies, and many business owners only find the gap at permit renewal or after an accident. The FWCMS help centre, part of the Immigration Department's online work pass system, lists two compulsory insurance policies: the Foreign Workers Insurance Guarantee and the Foreign Workers Hospitalisation and Surgical Scheme. PERKESO registration is a separate legal duty on top of both.
| Requirement | What it is for | Set by | Paid by | Renewed |
|---|---|---|---|---|
| SPIKPA (also called SKHPPA or FWHS) | Admission and surgery charges at non-corporatised government hospitals, for accident or illness | Ministry of Health (KKM) | Employer; MOH says it may be deducted from wages | Every year |
| Security bond: cash deposit, bank guarantee or insurance guarantee | Money Immigration can use if the worker has to be sent home; forfeited if the worker absconds | Immigration Department | Employer | With the work pass; a guarantee for an extension must be valid 18 months or more |
| PERKESO (LINDUNG PEKERJA and LINDUNG 24 Jam) | Work injuries, occupational disease, invalidity or death from any cause, and accidents outside work | PERKESO, under the Employees' Social Security Act 1969 | Employer 1.75%, worker 1.25% of wages | Monthly contributions |
| EPF (savings, not insurance) | Retirement savings | KWSP | Employer 2%, worker 2% | Monthly, from October 2025 wages |
The names confuse people. SPIKPA (Skim Perlindungan Insurans Kesihatan Pekerja Asing), SKHPPA and FWHS all refer to the same compulsory hospital and surgical insurance. The Ministry of Health runs the SPIKPA portal and its FAQ calls the scheme SKHPPA, while Immigration's renewal checklist calls it SPIKPA. The old Foreign Workers Compensation Scheme (FWCS) is a different thing that PERKESO replaced in 2019, as explained below.
This guide is written for factories, shops, restaurants, construction firms and other businesses. Domestic helpers and the plantation sector have some different rules, so check those with Immigration. It is general information, not legal advice.
What does SPIKPA (SKHPPA / FWHS) cover, and what does it not cover?
SPIKPA pays a foreign worker's admission and surgery charges when they are admitted to a non-corporatised Malaysian government hospital because of an accident or illness. The Ministry of Health's SPIKPA FAQ says the scheme is compulsory, the premium is RM120 per worker per year, and cover starts only once the worker is registered and the premium is paid. Great Eastern General is one of the insurers on MOH's list of SPIKPA insurers, and its Foreign Worker Hospitalisation & Surgical Scheme page sets out the benefits like this:
| Benefit | How it is paid |
|---|---|
| Room and board (up to 30 days) and intensive care (up to 15 days) | Third class room rates, up to RM160 a day |
| Hospital supplies and services, operating theatre | As charged under the government hospital fees (Fees (Medical) Order 1982) |
| Surgical fees (organ transplants excluded) and anaesthetist fees | As charged under the government hospital fees |
| In-hospital doctor and specialist visits (up to 30 days each) | As charged under the government hospital fees |
| Ambulance and medical report fees | As charged under the government hospital fees |
| All of the above together | Up to RM20,000 per worker per policy year |
What this means in practice:
- Private hospitals are not covered. MOH's FAQ limits admission to non-corporatised government hospitals. If a worker is taken to a private hospital, SPIKPA will not pay that bill.
- Admission only. Every benefit on the list is tied to a hospital stay; outpatient clinic visits are not on it.
- RM20,000 a year is the ceiling for everything combined. A long ICU stay or major surgery can go past it, and the balance is still owed to the hospital.
- Death and disability are not part of SPIKPA. Those come from PERKESO, covered below.
The unpaid balance matters more than most owners expect. MOH's SPIKPA bill check lets employers look up hospital and clinic bills a foreign worker still owes MOH. The bills must be paid in full at that hospital or clinic, and MOH states that the worker's PLKS will not be renewed while any of them is outstanding.
Who pays the RM120? The employer buys and renews the policy. MOH's FAQ adds that the employer may pay the premium first and then deduct it from the worker's wages. If you do that, set it out clearly in the employment contract and on the payslip.
What is the foreign worker insurance guarantee, and how much is it?
Before a foreign worker gets a Visit Pass (Temporary Employment), the employer lodges a security bond with the Immigration Department. Immigration accepts it as a cash deposit, a bank guarantee or an insurance guarantee (often shortened to IG or FWIG). With an insurance guarantee, an insurer undertakes to pay Immigration, so you do not tie up cash. PIAM, the general insurers' association, told The Star that the guarantee is required from employers under Regulation 21 of the Immigration Regulations, and that if a foreign worker has to be repatriated during their stay, the insurer pays the Director General of Immigration up to the guaranteed amount.
The amount of the bond depends on the worker's nationality. These are the rates on Immigration's foreign worker page:
| Nationality | Security bond per worker |
|---|---|
| Indonesia | RM250 |
| Thailand | RM250 |
| Cambodia | RM250 |
| Bangladesh | RM500 |
| Pakistan | RM750 |
| Myanmar | RM750 |
| India | RM750 |
| Nepal | RM750 |
| Sri Lanka | RM750 |
| Philippines | RM1,000 |
| Vietnam | RM1,500 |
Three rules decide whether you get the bond back or lose it:
- Repatriation through a Check Out Memo. When employment ends, the employer must send the worker home using a Check Out Memo (COM). Immigration says the bond can be claimed back when repatriation is done this way.
- Abscondment. If a worker leaves the workplace without notice, or does not come back after a trip home, the employer reports it to Immigration with a police report. Immigration blacklists the worker and confiscates the security bond.
- Validity at renewal. For a VP(TE) extension, a bank guarantee or insurance guarantee must be valid for at least 18 months.
The fee for an insurance guarantee is set by the insurer, not by Immigration, so I do not quote it here. Before you sign, ask what you would have to repay the insurer if Immigration ever calls on the guarantee, because that is your real exposure, not the yearly fee.
PERKESO for foreign workers since 2019: what it covers and who pays
Until the end of 2018, work accidents involving foreign workers came under the Foreign Workers Compensation Scheme (FWCS), insurance under the Workmen's Compensation Act 1952 enforced by the Department of Labour since April 1993. PERKESO's Employer's Circular No. 3 of 2018 moved that cover to PERKESO from 1 January 2019. Since then, foreign workers have been brought into two more schemes:
| Date | What changed for foreign workers |
|---|---|
| April 1993 | Work accidents covered by FWCS insurance under the Workmen's Compensation Act 1952 |
| 1 January 2019 | PERKESO Employment Injury Scheme replaces FWCS: accidents at work, on the way to and from work, and occupational disease |
| 1 July 2024 | PERKESO Invalidity Scheme: invalidity or death from any cause |
| 1 October 2025 | EPF becomes compulsory for non-Malaysian employees with a valid work pass, 2% from each side (KWSP) |
| 1 June 2026 | LINDUNG 24 Jam: accidents outside working hours that are not related to work |
The monthly contributions, as a share of wages, according to PERKESO's foreign worker page:
| Scheme | Employer | Foreign worker |
|---|---|---|
| Employment Injury Scheme | 1.25% | None |
| Invalidity Scheme | 0.5% | 0.5% |
| LINDUNG 24 Jam (phase 1) | None | 0.75% |
| Total | 1.75% | 1.25% |
The LINDUNG 24 Jam rate rises in phases: 0.75% in years 1 to 2, 1.00% in years 3 to 5 and 1.25% from year 6. A worker who first joins PERKESO at 55 or older, or is still working at 60, falls under the second category, which covers only the Employment Injury Scheme and LINDUNG 24 Jam.
For a covered injury, PERKESO gives free treatment at its panel clinics or at government clinics and hospitals, and pays temporary disablement benefit for medical leave of at least 4 days (including the day of the accident), permanent disablement benefit assessed by a Medical Board, a constant attendance allowance of RM500 a month for total disablement, and dependants' benefit. If the worker dies in Malaysia and is buried in the home country, the funeral benefit is up to RM7,500: RM4,500 to whoever pays to send the remains home and RM3,000 to the dependants. Under the Invalidity Scheme, a pension of at least RM550 a month needs at least 24 months of contributions; otherwise the worker receives a one-off invalidity grant.
Registration is the employer's duty. PERKESO's circular tells employers to register each worker through the ASSIST portal, which issues a 12-digit foreign worker social security number (KSPA) used for every later contribution. PERKESO says failing to register foreign workers or to pay contributions in full is an offence under the Employees' Social Security Act 1969, with a fine of up to RM10,000, up to 2 years in jail, or both. For claims and the local staff side, see my PERKESO guide; for the 24-hour scheme, see LINDUNG 24 Jam explained.
Does PERKESO replace SPIKPA? No. When the Invalidity Scheme was extended to foreign workers in 2024, the Malaysian Employers Federation and PIAM both told The Star there is no overlap: PERKESO deals with employment-related matters, the hospital scheme pays general hospitalisation costs, and a PERKESO claim does not normally stop a claim under other insurance.
Who pays what? A worked example for 10 foreign workers
Here is how the compulsory items add up for a small factory. Assumptions (an example only): a factory in Puchong employs 10 Bangladeshi workers, each earning RM2,000 a month, in the first phase of LINDUNG 24 Jam. PERKESO actually charges by wage band, so the monthly figures are close estimates. The levy, FOMEMA medical checks and Immigration fees are left out.
| Item | Per worker | 10 workers | Paid by |
|---|---|---|---|
| SPIKPA premium (MOH rate) | RM120 a year | RM1,200 a year | Employer (MOH allows deduction from wages) |
| Security bond for Bangladesh | RM500 | RM5,000, as a cash deposit or covered by a guarantee | Employer |
| PERKESO, employer share 1.75% | About RM35 a month | About RM350 a month | Employer |
| PERKESO, worker share 1.25% | About RM25 a month | About RM250 a month | Worker, deducted from wages |
| EPF, 2% each side | RM40 + RM40 a month | RM400 + RM400 a month | Employer and worker |
Two things stand out. First, the bond is the largest single sum: an insurance guarantee is what lets that RM5,000 stay in the business instead of sitting with Immigration. Second, everything in this table is only what the law requires. If one worker needs surgery at a private hospital, or a stay that costs more than RM20,000 in a year, none of these lines pays the difference.
What is checked when you renew a foreign worker's permit (PLKS)?
The VP(TE), the work pass most people call the PLKS, is valid for 12 months. Immigration lets employers apply for the extension 3 months before it expires, and an application made after expiry is referred to the Immigration Enforcement Division. A foreign worker may work in Malaysia for up to 10 years, renewed year by year. Renewals are made online through ePLKS@FWCMS, the Immigration Department's single platform for work passes from the first application to each yearly renewal. This is the order I suggest:
- Three months before expiry: list every worker whose pass is due and check that each passport is valid for at least 12 more months.
- Check unpaid MOH bills on the SPIKPA portal and settle them at the hospital or clinic. The PLKS will not be renewed while they are outstanding.
- Renew SPIKPA for the coming year. Immigration's checklist requires it, except in the plantation sector, and cover starts only after registration and payment. On 13 November 2026 the SPIKPA portal posted a notice of delay in SPIKPA data processing, one more reason not to leave this to the last week.
- Renew the security bond: a bank guarantee or insurance guarantee must be valid for at least 18 months.
- Bring PERKESO up to date. Immigration's checklist still names the old FWCS slip; since 2019 that cover has come from PERKESO, so make sure each worker is registered and every month's contribution is paid.
- FOMEMA medical examination for the second and third year extensions.
- Pay the levy and the Immigration fees, then submit.
A renewal goes most smoothly when nothing on this list has lapsed. A simple spreadsheet with each worker's pass, SPIKPA and guarantee expiry dates side by side shows what is due well before it becomes a problem.
Where the compulsory cover stops, and how I can help
The compulsory schemes cover the basics, but they leave gaps an employer should know about:
- Hospital bills at private hospitals, or above SPIKPA's RM20,000 a year.
- An extra lump sum for a worker's family after a death or serious injury, on top of PERKESO's benefits. A group personal accident policy can add that, but it never replaces PERKESO registration.
- The business itself: fire, flood, public liability and machinery. See business insurance for SMEs, factories and shops.
I work with factory, shop and restaurant owners in Kuala Lumpur and Selangor, including Seri Kembangan, Serdang, Puchong, Cheras and Klang, in Mandarin, English or Cantonese. Great Eastern General is on the Ministry of Health's list of SPIKPA insurers and shows its Foreign Worker Hospitalisation & Surgical Scheme on its own site. Send me your worker list with nationalities and pass expiry dates, and I will:
- mark which workers' SPIKPA, guarantee or PERKESO records fall due, ahead of the 3-month renewal window;
- check what Great Eastern offers for your workers' hospital cover and for the insurance guarantee, and tell you plainly if something is not available;
- look at whether a top-up such as group personal accident makes sense for your workforce, or whether the compulsory cover is enough for now.
If what you have is already in order, I will say so. No hard selling. Immigration, MOH and PERKESO update their rules, so always confirm the latest requirements on their portals; this guide is general information, not legal advice.