EPF, SOCSO & EIS for Employers Malaysia 2026
Hiring staff means taking on statutory payroll responsibilities. This guide explains the three schemes Malaysian SME employers most often encounter: EPF, SOCSO and EIS.
Once you employ eligible workers, you generally need to register them correctly, calculate employee deductions and employer contributions, pay the statutory bodies on time and keep payroll records.
EPF (KWSP)
EPF is retirement savings. For Malaysian employees below 60, KWSP currently highlights an 11% employee share, with the employer generally contributing 13% for monthly wages of RM5,000 and below and 12% for wages above RM5,000, subject to the official contribution schedule and employee circumstances.
Do not simply multiply every salary by a percentage: KWSP instructs employers to use the statutory contribution schedule for most salaries.
Foreign employees
Mandatory EPF contributions expanded to non-Malaysian citizen employees from October 2025 wages. For many non-Malaysian employees, the current rate is 2% employer and 2% employee, with different treatment for permanent residents and certain existing members.
SOCSO (PERKESO)
SOCSO provides social-security protection. PERKESO states that employers with one or more employees are responsible for registration and contributions for eligible workers.
For employees under 60 in the first contribution category, the contribution comprises 1.75% employer share and 0.5% employee share according to the contribution schedule. Other categories have different treatment.
EIS
The Employment Insurance System provides income support and employment services for eligible workers who lose employment. For covered employees, the total contribution is 0.4% of assumed monthly salary: 0.2% employer and 0.2% employee, subject to the statutory schedule and wage ceiling.
At-a-glance
| Scheme | Main purpose | Employer action |
|---|---|---|
| EPF | Retirement savings | Deduct employee share and pay employer share |
| SOCSO | Social security | Register eligible employees and contribute |
| EIS | Employment insurance | Contribute for covered employees |
Practical payroll workflow
- Collect accurate employee details.
- Confirm eligibility and statutory categories.
- Register the employer and employees where required.
- Set up payroll with current statutory tables.
- Deduct the employee portions correctly.
- Add employer contributions.
- Submit and pay by the applicable deadlines.
- Keep payroll and payment records.
Compare payroll software for Malaysia
Use payroll software that is actively maintained for Malaysian statutory changes. Rates, ceilings and treatment of different employee categories can change.
Important
This guide is general educational information. Always verify the current contribution schedules and employee eligibility with KWSP and PERKESO.
Last reviewed: August 2026.