EPF, SOCSO, EIS and PCB: A Malaysian Employer's Monthly Payroll Guide

What does an employer pay and deduct each month?

Every month you pay at least the minimum wage, add the employer's share of EPF, SOCSO and EIS, deduct the employee's share and PCB, and remit everything by the 15th of the following month. The four statutory payments as of October 2026:

Item	Employer	Employee	Key rule
EPF (KWSP), Malaysian employees	13% (wages up to RM5,000) or 12% (above RM5,000)	11%	Amounts follow KWSP's contribution schedule
EPF, non-Malaysian employees	2%	2%	From October 2025 wages; excludes domestic servants
SOCSO (PERKESO)	PERKESO table	PERKESO table	Insurable wage ceiling RM6,000 (since 1 October 2024)
EIS (SIP)	About 0.2%	About 0.2%	Same RM6,000 ceiling; foreign workers not covered
PCB (MTD)	Deducts and remits	Deducted from pay	LHDN schedule; depends on pay and reliefs

Minimum wage. The minimum wage is RM1,700 a month. It applied from 1 February 2025 to employers with five or more employees and to employers in professional activities, and from 1 August 2025 to all employers. Check that every basic salary meets it; a higher salary also raises EPF, SOCSO and EIS.

Deadline. EPF, SOCSO, EIS and PCB for a month's wages are all due by the 15th of the next month, so September 2026 wages mean payment by 15 October 2026.

How do you calculate EPF, SOCSO and EIS? A worked example

Multiply the wage by the rate for a first estimate, then confirm the exact amounts in the official tables, which work in wage bands. Example (illustrative): a Johor Bahru furniture workshop pays three employees for September 2026.

Item	Admin executive (Malaysian)	Sales manager (Malaysian)	Production worker (non-Malaysian)
Monthly wage	RM3,000	RM6,500	RM1,700
Employee EPF	11% = RM330	11% = RM715	2% = RM34
Employer EPF	13% = RM390	12% = RM780	2% = RM34
SOCSO	PERKESO table, on RM3,000	PERKESO table, capped at the RM6,000 ceiling	Confirm with PERKESO
EIS (about 0.2% each)	About RM6 each	About RM12 each (on RM6,000)	Not covered
PCB	LHDN schedule	LHDN schedule	LHDN rules

For September, the workshop pays KWSP RM1,204 of employer EPF plus RM1,079 deducted from staff, a total of RM2,283, by 15 October 2026. The admin executive alone costs the company at least RM3,390 a month before SOCSO and EIS, not RM3,000, which matters when you budget for a hire (see outsourcing versus hiring in-house).

Percentages are a guide only. KWSP, PERKESO and LHDN publish the official tables and calculators; use them for the exact amounts.

What changed for foreign workers' EPF?

From October 2025 wages, EPF became mandatory for non-Malaysian employees: 2% from the employer and 2% from the employee, with domestic servants excluded. October 2025 wages fell into the November 2025 contribution month, so the first payments were due by 15 November 2025.

If you employ foreign workers, for example in manufacturing, construction or F&B:

• Register each foreign worker with KWSP and keep passport and permit details current.
• Set payroll to deduct 2% and add the 2% employer share every month.
• Do not deduct EIS: foreign workers are not covered by EIS.
• Confirm with PERKESO how SOCSO applies to your foreign workers.
• Budget for it: on a RM1,700 wage, 2% is RM34 per worker a month, or RM408 a year.

If your payroll was not updated from the October 2025 wage month, contact KWSP about the missed months rather than waiting for them to surface in an inspection.

How does PCB work for employers?

PCB (Potongan Cukai Bulanan, the monthly tax deduction or MTD) is income tax that you deduct from each employee's pay and remit to LHDN by the 15th of the following month. It is the employee's tax, not a company cost, but the employer is responsible for deducting and remitting the right amount.

• The amount depends on each employee's pay and personal reliefs; use LHDN's official PCB schedule or calculator.
• Bonuses, commissions and arrears change that month's PCB, so do not copy last month's figure.
• New staff may have income from a previous employer in the same year, and employees can declare extra reliefs; ask LHDN or your tax agent how to reflect these.
• Lower-paid employees may have no PCB to deduct, but calculate and record it anyway.

If you discover that PCB was under-deducted, correct it promptly with help from LHDN or a licensed tax agent rather than waiting for the year end.

What should your monthly payroll checklist include?

A dependable payroll month follows the same eight steps, ending with payments by the 15th and a journal in your books.

1. Collect inputs by the last week of the month: attendance, overtime, leave, commissions, new joiners and leavers.
2. Check the minimum wage: every basic salary is at least RM1,700.
3. Calculate gross pay, EPF, SOCSO, EIS and PCB for each employee.
4. Review exceptions: non-Malaysian employees (2% EPF, no EIS), wages above RM5,000 (12% employer EPF) and wages above RM6,000 (SOCSO and EIS at the ceiling).
5. Pay salaries from the company's bank account and issue payslips.
6. Submit and pay EPF, SOCSO, EIS and PCB by the 15th of the following month.
7. Record the payroll journal and clear the payable accounts when you pay.
8. File the evidence: payslips, contribution statements and payment receipts, kept for 7 years.

Payroll fits naturally into your month-end closing checklist, so salary costs and liabilities are right before you review the month's results.

How do you record payroll in your books?

Record one payroll journal per pay run: gross salaries and the employer's contributions are expenses, and everything not yet paid out sits in liability accounts until it is paid. Using the admin executive from the example above:

Account	Debit	Credit
Salaries and wages (expense)	RM3,000
Employer EPF (expense)	RM390
Employer SOCSO and EIS (expense)	Table amounts
EPF payable		RM720 (RM390 + RM330)
SOCSO and EIS payable		Employer and employee shares
PCB payable		Schedule amount
Net salary payable		RM3,000 less RM330, employee SOCSO and EIS, and PCB

When you pay KWSP by the 15th, debit EPF payable RM720 and credit the bank; do the same for SOCSO, EIS and PCB. Two checks keep payroll clean:

• each payable account should be back to zero after the 15th; a growing balance means a missed or short payment;
• total salaries in the ledger should agree with your payroll reports, which makes the year-end EA forms and Form E much easier.

Salaries and statutory contributions are business costs; for how expenses are treated for tax, see tax-deductible business expenses.

What payroll mistakes cost employers the most?

The costly mistakes are usually simple ones, and each has a simple fix:

• Paying late because cash is tight. Employee deductions are held on the employees' behalf; treat them as untouchable. Late payment can attract late-payment charges or penalties from the agencies.
• Using the wrong wage base. Contributions are calculated on basic salary alone when other payments may also count as wages. Each agency defines wages for its own purposes, so check KWSP, PERKESO and LHDN guidance on allowances, commissions, bonuses and overtime before excluding anything.
• Applying the wrong rate or ceiling. Using 13% instead of 12% (or the reverse) around RM5,000, applying the RM6,000 SOCSO and EIS ceiling to EPF, or deducting EIS from foreign workers.
• Missing new joiners and leavers. Register them on time and include their part-month wages.
• Cash salaries without records. Without payslips and a bank trail, wages are hard to support if LHDN reviews your accounts.
• Salaries paid from a director's personal account. The books stop matching payroll and EA forms become guesswork; see separating business and personal money.

What are the year-end payroll deadlines?

Two annual deadlines sit on top of the monthly routine: give every employee a Form EA by the end of February, and file Form E with LHDN by 31 March.

What	For whom	Deadline
Form EA (Borang EA)	Each employee, for their personal tax return	By the end of February
Form E (Borang E)	LHDN: the employer's annual return	By 31 March
EPF, SOCSO, EIS and PCB	KWSP, PERKESO and LHDN	By the 15th of each following month

Before preparing EA forms, reconcile the year's payroll totals with your general ledger and the statutory payments; differences usually surface here. Rates, ceilings and coverage are revised from time to time, so confirm current requirements with KWSP, PERKESO and LHDN, or a licensed tax agent. For every other company deadline, see the Sdn Bhd annual compliance calendar.

How WeCount helps

WeCount records your payroll journals from your payroll reports each month, reconciles salary and statutory payments against your bank, and points out any EPF, SOCSO, EIS or PCB payment that is missing, so payroll costs show correctly in your monthly management reports. Running the payroll itself is quoted separately if you need it. Regulated audit, tax-agent and professional accountancy services are delivered through appropriately authorised partners where required. See our bookkeeping service.