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Malaysia Social Contributions Guide

Malaysia mandatory social contributions for 2026. The guide covers: the EPF (KWSP) at employee 11% — the employee may elect to reduce to 9% or 7%; the employer EPF contribution at 13% (for salaries below MYR 5,000) or 12% (for salaries above MYR 5,000); the SOCSO (Perkeso) at 0.5% employee share and 1.75% to 3% employer share; the EIS (Employment Insurance) at 0.2% each from the employee and the employer.

EPF (KWSP) — Employees Provident Fund (Kumpulan Wang Simpanan Pekerja)

  • Employee contribution — 11% (reducible to 9% or 7%): The employee is required to contribute 11% of the monthly salary to the EPF. The employee may elect to reduce the contribution rate to 9% or 7% by submitting the form (the "KWSP 17A" — the "election form") to the employer. The reduced rate applies for the calendar year and must be renewed annually. The contribution ceiling is MYR 4,000 per month for the mandatory contributions (the "monthly salary ceiling").
  • Employer contribution — 13% or 12%: The employer contributes 13% of the monthly salary for the employees earning MYR 5,000 or less per month, and 12% for the employees earning more than MYR 5,000 per month. The employer contribution is mandatory and cannot be deducted from the employee's salary. The total combined contribution — employee 11% + employer 13% — reaches 24% of the monthly salary.
  • Contribution ceiling: The EPF contributions are capped at the monthly salary ceiling of MYR 20,000 (for the purpose of the employer contribution calculation). The employee contribution is capped at MYR 4,000 per month for the mandatory contributions. The voluntary contributions above the ceiling are permitted.

For example: an employee earning MYR 4,000/month contributes MYR 440 (11%), and the employer contributes MYR 520 (13%) — the total EPF contribution is MYR 960/month (24% of the salary).

SOCSO (Perkeso) — Social Security Organisation (Pertubuhan Keselamatan Sosial)

  • Employee share — 0.5%: The employee contributes 0.5% of the monthly salary to the SOCSO (the "First Category" — the "Employment Injury Scheme" and the "Invalidity Pension Scheme"). The contribution is calculated on the monthly salary up to the ceiling of MYR 4,000 per month for 2026.
  • Employer share — 1.75% to 3%: The employer contributes between 1.75% and 3% of the monthly salary, depending on the employee's monthly salary bracket. For the salaries up to MYR 4,000, the employer rate is 1.75%. For the salaries above MYR 4,000, the rate increases up to 3%. The employer share covers the Employment Injury Scheme and the Invalidity Pension Scheme.
  • Coverage: SOCSO provides the coverage for: (a) the employment injury — the medical benefits, the temporary or permanent disability benefits, and the death benefits; (b) the invalidity — the pension for the permanent disablement due to the non-work-related causes; (c) the occupational disease — the benefits for the diseases arising from the employment.

For example: an employee earning MYR 4,000/month pays MYR 20 (0.5%) and the employer pays MYR 70 (1.75%) — the total SOCSO contribution is MYR 90/month.

EIS — Employment Insurance System (Sistem Insurans Pekerjaan)

  • Employee share — 0.2%: The employee contributes 0.2% of the monthly salary to the EIS. The contribution is calculated on the monthly salary up to the ceiling of MYR 4,000 per month. The maximum employee contribution is MYR 7.90 per month (MYR 4,000 × 0.2%).
  • Employer share — 0.2%: The employer contributes 0.2% of the monthly salary, matching the employee contribution. The total EIS contribution is 0.4% of the monthly salary (0.2% employee + 0.2% employer).
  • Coverage: EIS provides the benefits for the employees who lose the employment: (a) the job search allowance — up to 6 months of the partial income replacement; (b) the early re-employment allowance — the incentive for finding the new job before the benefit period ends; (c) the training fee — the vocational training support; (d) the income reduction allowance — for the reduced working hours.

For example: an employee earning MYR 4,000/month pays MYR 8 (0.2%) and the employer pays MYR 8 (0.2%) — the total EIS contribution is MYR 16/month.

FAQs

Are these contributions tax-deductible?

The EPF employee contribution is tax-deductible up to MYR 4,000 per year (the "EPF contribution relief" under the "individual income tax relief" category). The SOCSO and EIS contributions are NOT separately tax-deductible — they are included in the general relief or the employment expenses.

Do foreign workers pay EPF and SOCSO?

The foreign workers are generally NOT required to contribute to the EPF, but the employer may opt to contribute voluntarily. The foreign workers are exempt from SOCSO contributions. The foreign workers with the valid work permits contribute to the EIS if they are covered under the Employment Act 1955.

Can the EPF contributions be withdrawn before retirement?

Yes. The EPF allows the partial withdrawals for: (a) the housing — the purchase or the reduction of the housing loan; (b) the health — the critical illness or the medical treatment; (c) the education — the higher education expenses; (d) the age 50 — the withdrawal of up to 30% of the savings upon reaching age 50. See the "Pension Guide" for the full details of the EPF withdrawal rules.