Employer Social liability in Malaysia

GENERAL

In Malaysia, employers are required to contribute to 4 mandatory social benefit programs for their local national employees. These include

the Employees Provident Fund (EPF),
Social Security Organization (SOCSO),
Employee Insurance Scheme (EIS),
and HRD Levy

For Expat with Employment pass, it is mandatory to contribute to 2 benefit programs, Social Security Organization (SOCSO)

Q:What are the contributions of each of the burdens refers to?

A: The burden payment amount is based on actual incomes of employee for the month. However, there's a difference - besides the 1% HRD Levy as employer contribution, other burdens are paid based on your income range and the specific amount issued by the authority. Also, some of your income won't be used as the payment base. Please refer to the table below, or utilize Horizons tools of Cost Simulator

Employer Burden	Range or Rate	Base Exempted
HRD LEVY	= [(BASIC SALARY+ FIXED ALLOWANCE] x 1% Ref [click the link]→ Levy Calculation Guideline (hrdcorp.gov.my)	non-monthly fixed income E.g. Bonuses and commissions Gratuity on discharge or retirements Fund/scheme contribution to employee benefits or welfare. Travel allowances including petrol and transport allowances Apprenticeship Overtime payment Night work allowance Shift allowance Attendance allowance (for which the amount changes from month-to=month) Production incentive
EIS	Range and contribution as per [click the link]→ Rate_of_Contribution_ACT_800.pdf (perkeso.gov.my)
SOCSO	Range and contribution as per [click the link]→ Rate_of_Contribution_ACT_4.pdf (perkeso.gov.my)
EFP	Range and contributions as per [click the link]→ Ref Third Schedule – Section A (kwsp.gov.my)	e,g, certain incomes intec Overtime payments Gratuity (payment to employee payable at the end of a service period or upon voluntary resignation) Retirement benefits Termination benefits Travel allowances Meal allowance Payment in lieu of notice of termination of service Director’s fee Gifts (includes Cash Payments for holidays like Hari Raya, Christmas, etc.)

Employee Provident Fund (EPF):

In Malaysia, the deadline for all statutory payments including EPF is the 15th of the following month. In accordance with the Malaysian statutory requirements, the EPF Contributions must be submitted and paid by the 15th of each month for the previous month's salary by the employer. Once the payment has been successfully submitted, it usually takes 3 to 7 working days for the contribution to appear and be reflected in the employee's I-Akaun.

If the employee has encounter that his/her contribution has been delayed in more than 10 working and above after the 15th of the following month, he/she will need to reach out directly to his/her employer and EPF for further investigation.

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Malaysia

Employer Social liability in Malaysia