EPF, SOCSO & EIS: The Complete Employer Guide

The moment you hire your first employee, three statutory contributions become mandatory: EPF (KWSP) at 11% employee / 13% or 12% employer depending on wage band, SOCSO (PERKESO) and EIS, both capped at a RM6,000 monthly wage ceiling. All three — plus the HRD Corp levy, if your headcount triggers it — are due by the 15th of the following month. This guide covers exact rates, registration, and worked examples; for the employment-law side (who's covered, leave, termination), see our Employment Act guide.

EPF (KWSP) — retirement savings

A few practical points:

• Wages below RM20,000/month must use the exact fixed contribution amounts from EPF's Third Schedule, not a raw percentage calculation — the Schedule rounds to specific bands. Only wages above RM20,000/month are calculated by straight percentage.
• Total contributions (including cents) round up to the next ringgit.
• The foreign-worker rate change is recent — before October 2025 wages, non-citizen EPF was largely voluntary (a flat RM5/month if the employer opted in); it's now a mandatory 2%/2% split for non-citizen employees under 75 with a valid work pass.
• Contributions are due by the 15th of the following month.

SOCSO (PERKESO) — workplace injury & invalidity protection

The wage ceiling is RM6,000/month (raised from RM5,000 effective 1 October 2024) — wages above this are still contributed on the RM6,000 cap, not the full amount.

Below the RM6,000 ceiling, PERKESO uses tiered wage bands (not a flat percentage) — actual monthly contribution for a given salary comes from the published contribution table rather than a simple multiplication. Our payroll calculator applies the correct band automatically for any wage you enter, which is the fastest way to get an exact figure without looking up the table by hand.

EIS (Employment Insurance System)

EIS provides temporary financial assistance if an employee loses their job. It shares SOCSO's RM6,000 wage ceiling, with a maximum contribution at the ceiling of RM11.90/month employer + RM11.90/month employee. EIS covers Malaysian employees under 60 — employees aged 60+ and most foreign workers are excluded from EIS coverage specifically (unlike SOCSO, which still covers 60+ employees under its Category 2).

HRD Corp levy — the one employers forget

If you have 10 or more Malaysian employees, HRD Corp registration and levy payment are mandatory — a step many SME owners genuinely don't know applies to them until they're already over the threshold. Employers with 5–9 employees can register voluntarily.

The levy is calculated on basic salary plus fixed allowances (transport, housing, shift allowance) — it excludes variable pay like overtime, bonuses, and commissions. Like EPF/SOCSO/EIS, it's due by the 15th of the following month. The upside: registered employers can claim back training costs — upskilling, apprenticeships, even training-related equipment — through HRD Corp's grant system, so the levy isn't purely a cost if you actually use the training budget it unlocks.

Worked example

An employee earning RM3,500/month, Malaysian citizen, under 60, at a company with 12 Malaysian employees (HRD Corp-mandatory):

SOCSO and EIS are not straight percentages — they are fixed amounts read off PERKESO's tiered contribution schedule for the wage band the salary falls into, which is why they don't move smoothly with salary. The figures above are the exact scheduled amounts for the RM3,400–3,500 band; use the payroll calculator for any other wage.

The number that matters for hiring decisions: this employee costs the employer RM4,057.25/month, about 16% more than the RM3,500 advertised salary. Budget from that figure, not the headline one.

Registering as an employer

1. EPF: register via the KWSP employer portal (i-Akaun) before or immediately upon hiring your first employee.
2. SOCSO/EIS: register via PERKESO's ASSIST portal — SOCSO and EIS registration happen together.
3. HRD Corp (if applicable): register via the HRD Corp e-TRIS system once your Malaysian headcount reaches 10, or voluntarily from 5.
4. All four contributions are then paid monthly, alongside PCB (income tax deduction) — see our salary structures guide for the full payroll calendar and how they all line up on the same 15th-of-month deadline.

Frequently asked questions

Do I need to register for EPF/SOCSO for a part-time or contract employee?
Generally yes — EPF and SOCSO obligations are based on employment relationship and wages, not full-time status specifically. Check the specific arrangement (some genuinely independent contractors are treated differently from employees) rather than assuming part-time automatically means exempt.

What happens if I miss the 15th-of-month deadline?
Late payment triggers interest/penalty charges from KWSP and PERKESO respectively, and in serious or repeated cases can expose company directors to personal liability. There's no grace period built into the statutory deadline itself.

Does HRD Corp apply to me if I have 8 employees, some of them foreign workers?
The 10-employee mandatory threshold counts Malaysian employees specifically — check your actual Malaysian headcount, not total staff count, when determining whether you're mandatory (10+) or in the voluntary band (5–9).

Why did the foreign worker EPF rate change in October 2025?
It moved from a largely voluntary, flat RM5/month employer-only arrangement to a mandatory 2% employer / 2% employee structure for non-citizen employees under 75 with a valid work pass — a genuine policy shift, not a continuation of the old voluntary system. If you employ foreign workers, this is worth double-checking against your current payroll setup if it hasn't been reviewed since the change.

Is SOCSO Category 2 (60+) contribution optional?
No — it's still mandatory for employees aged 60 and above who continue working, just at a lower rate and covering Employment Injury only (no Invalidity Scheme, since that's a pre-retirement-age benefit), with no employee-side deduction.

Sources: KWSP (EPF) employer contribution guidance and Third Schedule; PERKESO (SOCSO) contribution rate schedule; HRD Corp employer levy guidance. Rates and wage ceilings confirmed as of July 2026, cross-checked against this site's own payroll calculator — verify current figures with KWSP, PERKESO, or HRD Corp directly, as contribution rates and wage ceilings have changed multiple times in recent years (most recently the SOCSO/EIS ceiling in October 2024 and the foreign-worker EPF rate in October 2025).