Every employer in Malaysia is legally required to make monthly statutory contributions to three bodies on behalf of their employees: EPF (Employees Provident Fund / KWSP), SOCSO (Social Security Organisation / PERKESO), and EIS (Employment Insurance System). These contributions are not optional and are not the employee's responsibility to arrange — they are the employer's legal obligation. Missing deadlines, contributing the wrong amounts, or failing to register employees correctly exposes employers to fines, surcharges, and in serious cases, criminal prosecution.

This guide covers the contribution rates, eligible employees, monthly deadlines, and the most common compliance mistakes for each of the three statutory schemes.

EPF (Employees Provident Fund / KWSP)

Who Must Contribute

EPF contributions are mandatory for:

  • All Malaysian citizens and permanent residents employed in Malaysia
  • Non-Malaysian employees and their employers may contribute voluntarily
  • Employees of any age, including those above 60 (at different rates)

EPF does not apply to: self-employed individuals (though voluntary participation is available), domestic workers (household employees), and casual or temporary workers paid on a daily basis (though EPF may still apply to certain arrangements).

Contribution Rates

For employees below 60 years of age:

  • Employee contribution: 11% of monthly wages
  • Employer contribution: 13% of monthly wages (for monthly wages below RM5,000) or 12% (for monthly wages of RM5,000 and above)

For employees 60 and above:

  • Employee contribution: 5.5% of monthly wages
  • Employer contribution: 6.5% of monthly wages

Note: The government occasionally revises EPF employee contribution rates. Check EPF's official website (kwsp.gov.my) or the official contribution rate table for the most current rates, particularly if any amendments have been made since this guide was last updated.

What Counts as "Wages" for EPF

Not all payments to employees are subject to EPF contributions. Payments that are subject to EPF include basic salary, overtime pay, commissions, and most regular allowances. Payments that are generally excluded include: annual bonus (for contributions above the statutory threshold), gratuity, retirement benefits, retrenchment benefits, and certain specific allowances. Check EPF's Third Schedule for the definitive list of included and excluded payments.

Payment Deadline

EPF contributions for each month must be paid by the 15th of the following month. For example, January's contributions must be paid by 15 February. Late payment incurs a penalty of 6% per year on the late amount, calculated daily from the due date.

Employer Registration

Employers must register with EPF before hiring their first employee. Registration can be done online through the i-Akaun (Employer) portal. Failure to register before employing staff is an offence under the EPF Act 1991.

SOCSO (Social Security Organisation / PERKESO)

Who Must Contribute

SOCSO coverage is mandatory for Malaysian citizens and permanent residents employed in Malaysia. Non-Malaysian employees may be covered at the employer's and employee's request, but is not mandatory for most categories. SOCSO covers employees earning up to RM5,000 per month in wages — employees earning above this threshold are still covered but contributions are capped at the RM5,000 wage ceiling.

Schemes and Contribution Categories

SOCSO operates two schemes:

Employment Injury Scheme (EIS — not to be confused with EIS described below): Covers injuries sustained during the course of employment and occupational diseases. Both employer and employee contribute.

Invalidity Pension Scheme: Provides pension, invalidity benefit, and survivors' pension to employees who become permanently disabled. Employees below 60 who have not previously reached 60 contribute to this scheme. Employees 60 and above contribute only to the Employment Injury Scheme.

Contribution Rates

SOCSO contribution rates are calculated from a rate table based on monthly wages. Rates vary from RM0.40 to RM92.55 per month depending on the wage bracket. The employee's share is approximately 0.5% of wages, and the employer's share is approximately 1.75% of wages, though the exact amounts should be verified from SOCSO's official contribution rate table, as rates are expressed in fixed amounts per wage band rather than precise percentages.

Payment Deadline

SOCSO contributions for each month must be paid by the 15th of the following month. Late payment incurs interest of 6% per year.

EIS (Employment Insurance System)

What EIS Is

The EIS (not to be confused with SOCSO's Employment Injury Scheme) is a social protection scheme established under the Employment Insurance System Act 2017. It provides financial assistance to employees who lose their jobs involuntarily — for example, through retrenchment, company closure, or constructive dismissal. It also funds training and job placement services through SoscoSPAD.

Who Must Contribute

All employees and employers covered by SOCSO are also covered by EIS. Employees above 57 who have never made EIS contributions before joining their current employer are exempt from EIS contributions.

Contribution Rates

Both employer and employee each contribute 0.2% of monthly wages, capped at a monthly wage ceiling of RM5,000. The contribution is calculated from the same SOCSO contribution table — the EIS contribution is listed as a separate line item alongside the SOCSO amounts. For employees earning above RM5,000, contributions are capped at the ceiling wage level.

Payment Deadline

EIS contributions are paid together with SOCSO contributions through the same PERKESO payment system, by the 15th of the following month.

How to Make the Monthly Payments

EPF contributions are submitted through the i-Akaun (Employer) portal at kwsp.gov.my. Payments can be made via online banking, e-payment through the portal, or at authorised agent banks. SOCSO and EIS contributions are submitted together through the EzHasil or ASSIST system at socso.gov.my or through the PERKESO ASSIST portal.

Many Malaysian payroll software packages automate the calculation and submission of all three contributions, reducing the risk of calculation errors and missed deadlines. Manual calculation using the official rate tables is still valid and is what many small employers do.

Penalties for Non-Compliance

  • EPF: Late payment penalty of 6% per annum from the due date. Failure to pay is a criminal offence with fines of up to RM10,000 per offence and/or imprisonment
  • SOCSO: Late payment attracts interest of 6% per annum. Employers who fail to register employees or remit contributions face fines and potential prosecution
  • EIS: Same penalties as SOCSO

Calculate Your EPF, SOCSO, and EIS Contributions with Popupnote

The EPF / SOCSO / EIS Calculator on Popupnote calculates the exact contribution amounts for both employer and employee based on the employee's monthly wages and age category, using the official rate tables. Enter the wage amount and select the employee category, and the calculator returns the exact amounts payable to each statutory body. Runs in your browser without an account.