Employers in Malaysia must understand statutory contributions such as EPF, SOCSO, and EIS to ensure compliance and avoid penalties. These contributions form the backbone of employee welfare protection, supporting retirement benefits, injury protection, and unemployment coverage.
At Alena Consultancy & Services, we help Malaysian businesses navigate payroll compliance, statutory obligations, and workforce risk management. This comprehensive guide explains EPF, SOCSO & EIS contribution requirements and how employers can implement them effectively in payroll systems.
In Malaysia, employers are required by law to contribute to several key social protection schemes on behalf of their employees:
EPF — Employees’ Provident Fund
SOCSO — Social Security Organisation (Employment Injury & Invalidity)
EIS — Employment Insurance System
These schemes protect employees while ensuring employers meet their statutory obligations under Malaysian labour law.
The Employees’ Provident Fund (EPF) is a retirement savings scheme managed by the that provides retirement, disability, and death benefits to employees.
Both employers and employees must make monthly contributions based on a percentage of the employee’s basic salary:
| Party | Contribution Rate |
|---|---|
| Employer | 13% – 12% (depending on employee age group) |
| Employee | 11% |
(Exact percentages may vary based on age, government updates, and employer type.)
Employers should ensure payroll systems:
✔ Deduct employee EPF correctly
✔ Add employer EPF contribution
✔ Report and remit contributions by the deadline
Failing to comply can lead to penalties and non-compliance issues.
Managed by the , SOCSO protects employees from workplace injuries, occupational diseases, and invalidity.
SOCSO includes two main schemes:
Employment Injury Scheme
Invalidity Scheme
Employers and employees contribute monthly based on a scale tied to wages. This ensures:
✔ Coverage for work-related injuries
✔ Compensation for disabilities
✔ Survivor benefits
Payroll systems should calculate and remit SOCSO on time to maintain compliance.
The Employment Insurance System (EIS) is designed to provide temporary financial assistance to workers who become unemployed. It also supports training and reemployment initiatives.
Both employers and employees contribute monthly based on a fixed percentage of the employee’s wages.
EIS offers:
✔ Job search allowances
✔ Career coaching
✔ Skills training grants
✔ Monthly financial support during unemployment
This system is especially important for employers managing workforce restructuring or redundancies.
Failing to remit EPF, SOCSO, or EIS contributions on time can lead to:
Fines and penalties
Legal disputes
Reputation damage
Audit exposure
Employees expect statutory protections. Proper contributions support morale, reduce turnover, and build employer credibility.
Integrated payroll systems and professional advice help eliminate calculation errors and late remittances.
Statutory compliance forms part of a broader HR governance strategy and helps protect the business from unforeseen liabilities.
At Alena Consultancy & Services, we specialise in statutory payroll compliance for Malaysian businesses, including:
✔ EPF calculation & remittance support
✔ SOCSO contribution registration & reporting
✔ EIS enrollment & submission handling
✔ Payroll outsourcing solutions
✔ HR advisory for statutory compliance
We help businesses stay informed on latest regulatory changes, optimise payroll operations, and reduce compliance risk — so you can focus on core growth.
Q1: When are EPF, SOCSO, and EIS contributions due each month?
A1: Contributions are generally due by the 15th of the following month. Employers must remit contributions promptly to avoid penalties.
Q2: Do foreign employees also require statutory contributions?
A2: Yes. Most foreign employees employed in Malaysia must be included in EPF, SOCSO, and EIS contributions, subject to eligibility and legal requirements.
Q3: Can Alena handle statutory contributions on behalf of my company?
A3: Yes. We offer payroll outsourcing that includes accurate calculation, reporting, and statutory remittance support.
Q4: What happens if contributions are late or incorrect?
A4: Non-compliance may trigger fines, legal action, and employer audits. Professional payroll support reduces this risk.
Q5: Do these contribution rates change?
A5: Yes. Contribution rates can change based on government policy updates. Employers should stay informed and align payroll systems accordingly.
Understanding and managing EPF, SOCSO, and EIS contributions is essential for Malaysian employers who value compliance, employee welfare, and long-term stability.
With expert payroll support and HR advisory from Alena Consultancy & Services, you can ensure your statutory obligations are met with precision and reliability.
📩 Contact Alena today at [email protected] to streamline your payroll and statutory contribution processes.
Prepared by the Alena Consultancy & Services’s Marketing & Compliance Department, This article is for general informational purposes only and does not constitute legal or professional advice. Employers should consult qualified HR or payroll specialists to ensure compliance with current Malaysian regulations.
Malaysia
