Employee Welfare Fund contributions postponed to January 1, 2027

The Cabinet has acknowledged the principles of three draft laws concerning the Employee Welfare Fund to postpone the commencement of contributions to January 1, 2027.

The collection of employee and employer contributions to the fund was originally scheduled to commence on October 1, 2026.

The postponement aims to alleviate the burden on both employers and employees during a period of economic uncertainty, particularly for business establishments affected by the floods that occurred between September 25 and 29, 2026—a situation that forced some businesses to suspend or scale back operations, while causing some employees to experience a reduction or total loss of income due to work stoppages.

The three draft laws proposed by the Ministry of Labour and approved by the Cabinet were:

1. Postponement of the start date for fund contributions: From October 1, 2026, to January 1, 2027

The draft Royal Decree on the Commencement of Collection of Employee Welfare Fund Contributions stipulates a three-month postponement of the collection start date. This measure aims to provide immediate relief and allow business establishments time to recover their operations and prepare their finances before contributions begin.

2. Adjustment of the contribution timeline, with initial rates maintained

The draft Ministerial Regulation on Employee Welfare Fund Contribution Rates aligns the implementation timeline for contribution rates with the revised start date. From January 1, 2027, to December 31, 2031, both employees and employers will be required to contribute 0.25% of the employee's wages. This rate will subsequently increase to 0.5% for each party, effective from January 1, 2032, onwards.

3. Alignment of the effective date for welfare assistance criteria with the revised contribution start date

The draft Ministerial Regulation prescribing criteria and procedures for providing assistance to employees in the event of the termination of their employment or death revises the effective date of the original 2024 Ministerial Regulation, setting it to commence from January 1, 2027, onwards. This adjustment ensures that the criteria for providing employee assistance align with the scheduled start date for fund contributions, thereby preventing inconsistencies among relevant laws.

The Cabinet’s resolution serves to acknowledge the principles underlying these three draft legal instruments, which will now proceed through the established legal processes to become law.

For details on the original Employee Welfare Fund contribution requirements and rates, read our previous update: Employee Welfare Fund Contributions to Begin on 1 October 2026.