SOCSO, EIS, EPF, HRDF, PCB — every statutory registration you must complete and when to do it.
| Contribution | Employer Pays | Employee Pays | Notes |
|---|---|---|---|
| EPF (KWSP) | 13% (wages ≤RM5,000) / 12% (wages >RM5,000) | 11% | Employee can opt for 9% voluntarily |
| SOCSO (Employment Injury) | ~1.75% | 0.5% | Capped at RM4,000 wages for contribution calculation |
| EIS (Employment Insurance) | 0.2% | 0.2% | Bundled with SOCSO registration; for retrenched workers |
| HRDF / HRD Corp | 1% (10+ staff) / 0.5% optional (<10) | None | Only for Malaysian employees |
| PCB / MTD (income tax) | Withhold & remit only | 0–30% depending on income bracket | Employer deducts from salary and remits to LHDN |
Budgeting tip: Add 15–20% above gross salary to cover employer-side statutory costs.
| Action | Deadline |
|---|---|
| Register with EPF | Within 7 days of first hire |
| Register with SOCSO / EIS | Within 30 days of first hire |
| Register with LHDN (PCB) | ASAP; upload SSM docs within 14 days |
| Pay salary to employee | By 7th of following month |
| Remit EPF, SOCSO, EIS, PCB | By 15th of following month |
| Issue Form EA to employees | By end of February (for prior year) |
| Provision | Requirement |
|---|---|
| Minimum wage (2026) | RM1,700/month (all employers from 1 Aug 2025) |
| Working hours | Maximum 8 hours/day, 48 hours/week (EA-covered employees) |
| Annual leave | 8 days/year (<2 years service); 12 days (2–5 years); 16 days (>5 years) |
| Sick leave | 14 days/year (<2 years); 18 days (2–5 years); 22 days (>5 years) |
| Maternity leave | 98 consecutive days (mandatory) |
| Overtime | 1.5× hourly rate for normal OT; 2× on rest days; 3× on public holidays |
| Termination notice | 4 weeks (<2 years service); 6 weeks (2–5 years); 8 weeks (>5 years) — or payment in lieu |
Employment Act 1955 protections apply to all employees earning RM4,000/month or less, and to manual workers of any salary. Many provisions are extended by regulation to all employees regardless of salary.
Yes. EPF contributions apply to all employees paid wages — whether full-time, part-time, or contract. The contribution rates are the same (13% employer / 11% employee for wages ≤RM5,000). The only exemptions are: self-employed individuals (no employer-employee relationship), interns who are unpaid, and certain categories of domestic workers (though EPF is now strongly encouraged for domestic workers too).
PCB stands for Potongan Cukai Berjadual — literally "Scheduled Tax Deduction" — which is Malaysia's PAYE (Pay As You Earn) income tax system. As an employer, you calculate and deduct an estimated monthly income tax from each employee's salary based on their annual projected income, then remit it to LHDN by the 15th of the following month. LHDN provides a PCB calculator and tax deduction tables to help you calculate correctly. Incorrect PCB calculation or late remittance carries a penalty of 10% of the amount owed.
EPF (Kumpulan Wang Simpanan Pekerja / KWSP) is a retirement savings fund — contributions go into individual member accounts and are withdrawn at retirement (age 55/60). SOCSO (Sistem Perlindungan Keselamatan Sosial / PERKESO) is a social insurance scheme — it provides coverage for workplace accidents, occupational disease, disability, and death. EPF is savings you get back; SOCSO is insurance that pays out only if a qualifying event occurs. Both are mandatory for Malaysian employees.
It depends. If an intern receives wages (gaji), EPF and SOCSO contributions are technically required. If the intern receives only a token allowance (elaun) — and the arrangement is structured as training rather than employment — contributions may not be required, but the lines are blurry. To be safe: if you're paying them a regular monthly amount, treat it as employment and register contributions. SOCSO coverage is particularly important since workplace accidents can happen during internships.
Only if the person is genuinely self-employed — i.e., they run their own business, invoice you, have multiple clients, and control how/when they work. If the actual arrangement looks like employment (fixed hours, single client, you direct their work), LHDN and SOCSO may recharacterise it as an employment relationship, making you liable for backdated contributions plus penalties. "Freelance" contracts are not a reliable way to avoid statutory obligations — substance matters more than labels.
EIS (Employment Insurance Scheme / Skim Insurans Pekerjaan) is managed by SOCSO and provides income replacement if an employee is retrenched (laid off). It covers Malaysian citizens and permanent residents in the private sector earning up to RM4,000/month (for contribution calculation purposes). The rate is 0.2% each from employer and employee. EIS does NOT cover: foreign workers, public servants, domestic workers, or employees who resign voluntarily. EIS registration is bundled with SOCSO — one registration covers both.
Failure to register is an offence under the EPF Act 1991 and SOCSO Act 1969. Penalties include: fines up to RM10,000 per offence, and up to 3 years imprisonment for persistent or egregious non-compliance. LHDN can also backdate PCB liability with interest. In practice, enforcement targets larger employers, but small employers are not immune — especially when a disgruntled employee files a complaint. Backdated contributions plus penalties can be financially devastating for small businesses.
The Employment Act 1955 (EA) applies to all employees earning RM4,000/month or less, and to manual workers of any salary. From 1 January 2023, many protections (working hours, overtime rates, termination benefits) were extended to all private sector employees regardless of salary. If you run a small Malaysian business with local employees, assume the EA applies to you in full and comply accordingly.