EPF, SOCSO, EIS & PCB: The 2026 Statutory Deductions Cheat Sheet for Malaysian Employers
The exact 2026 contribution rates, ceilings, and filing deadlines for EPF, SOCSO, EIS, and PCB — with practical examples for the most common Malaysian payroll mistakes.
TL;DR — Malaysian employers must deduct and remit four statutory contributions every month: EPF (KWSP), SOCSO (PERKESO), EIS, and PCB. Each has its own rate, ceiling, deadline, and form. Miss any of them and you’re personally liable as a director. This article gives you the 2026 rates, the deadlines, and the three mistakes we see every month.
If you’re running payroll in Malaysia and you can’t recite the EPF / SOCSO / EIS / PCB rates from memory, this article is your cheat sheet. Save it. Print it. Tape it to your monitor.
The four contributions, at a glance
| Contribution | Employer | Employee | Cap | Form | Deadline |
|---|---|---|---|---|---|
| EPF | 13% / 12% | 11% | None on employer; salary-banded on employee | Form A | 15th of following month |
| SOCSO | 1.75% | 0.5% | RM 5,000 monthly wages (Cat 1 + Cat 2) | Form 8A | 15th of following month |
| EIS | 0.2% | 0.2% | RM 5,000 monthly wages | Form SIP-1 | 15th of following month |
| PCB (MTD) | — | Tax band | None | CP39 / Form E (annual) | 15th of following month |
Two important footnotes:
- EPF employer rate is 13% if employee earns ≤ RM 5,000/month, 12% if > RM 5,000.
- PCB is the employee’s monthly income tax deduction. The employer doesn’t add anything — but the employer must deduct it correctly and remit it.
EPF (Employees Provident Fund) — the basics
EPF is a compulsory retirement savings fund administered by KWSP. It applies to all Malaysian and PR employees, and to non-Malaysian employees who opt in.
2026 employer rates:
- 13% on monthly wages of RM 5,000 or less
- 12% on monthly wages above RM 5,000
2026 employee rate: 11% on all wages.
What counts as “wages” for EPF purposes:
- Basic salary, fixed allowances, commissions, bonuses, leave pay, arrears of wages.
What does NOT count:
- Service charge, overtime, gratuity (one-off retirement gift), retrenchment benefit, travel allowance, accommodation, director’s fees that are pure equity returns.
⚠️ Common mistake #1: Treating monthly bonuses as “non-wage”. Bonuses are EPF-deductible. Annual bonuses paid out monthly count.
How to remit:
- Generate Form A in your payroll software.
- Pay via i-Akaun (Employer) at kwsp.gov.my by the 15th of the following month.
- Late payment = 6% per annum dividend penalty on the underpayment, plus separate court-imposed fine.
SOCSO (Social Security Organisation) — Cat 1 + Cat 2
SOCSO covers two schemes administered by PERKESO:
- Category 1 — Employment Injury + Invalidity: covers all Malaysian employees regardless of age. Rate: 1.75% employer, 0.5% employee, on wages up to RM 5,000/month.
- Category 2 — Employment Injury only: applies once an employee turns 60. Rate: 1.25% employer, 0% employee, on wages up to RM 5,000/month.
Ceilings:
| Wage band | Employer Cat 1 | Employee Cat 1 |
|---|---|---|
| RM 30 or less | RM 0.40 | RM 0.10 |
| RM 30.01 – 50 | RM 0.70 | RM 0.20 |
| …graduated table… | … | … |
| RM 4,400.01 – 5,000 | RM 86.65 | RM 24.75 |
| Above RM 5,000 | RM 86.65 | RM 24.75 (capped) |
⚠️ Common mistake #2: Forgetting to switch employees from Category 1 to Category 2 the month they turn 60. The 0.5% employee deduction stops; the employer pays only 1.25%.
How to remit:
- Generate Form 8A.
- Pay via ASSIST Portal at perkeso.gov.my by the 15th of the following month.
- Late payment = interest 6% per annum + 10% one-off penalty.
EIS (Employment Insurance Scheme)
EIS is the unemployment-insurance leg, administered by PERKESO alongside SOCSO. It applies to all Malaysian employees aged 18–60 earning up to RM 5,000/month.
Rate: 0.2% employer + 0.2% employee, capped at RM 5,000 wages.
| Wage band | Employer | Employee |
|---|---|---|
| RM 30 or less | RM 0.05 | RM 0.05 |
| RM 30.01 – 50 | RM 0.10 | RM 0.10 |
| …graduated table… | … | … |
| Above RM 5,000 | RM 7.90 | RM 7.90 |
EIS is filed alongside SOCSO through the same ASSIST Portal in a single payment — Form SIP-1 is auto-bundled with Form 8A.
⚠️ Common mistake #3: Stopping EIS at age 60 instead of stopping it the month after the employee’s 60th birthday. The cut-off is exclusive of the birth-month.
PCB (MTD — Monthly Tax Deduction)
PCB is the employee’s monthly income tax that you, the employer, deduct and remit to LHDN. The employee’s annual tax bill is reconciled at year-end via Form E (employer return) and Form BE (employee return).
Where to find the 2026 PCB tables:
- The official tables are published by LHDN as Schedule 1 — Tax Tables. Download the latest at hasil.gov.my → “PCB Calculator”.
- Use the e-PCB calculator at MyTax to verify any case.
Key principle: PCB is calculated on the chargeable income for the month, which is the employee’s gross taxable income minus EPF (capped at RM 7,000/year for relief), zakat, and the prescribed monthly rebates (including the PCB rebate of up to RM 400 for individuals earning below RM 35,000 chargeable income).
Special components that often get PCB-coded wrong:
| Component | PCB-able? |
|---|---|
| Basic salary | Yes |
| Bonus | Yes — pro-rate using bonus formula |
| Director’s fees | Yes |
| Travelling allowance for official duty | No (subject to LHDN limits) |
| Childcare allowance | Exempt up to RM 2,400/year |
| Mobile phone allowance | Exempt up to RM 6,000/year |
| Petrol card / company car | Yes — use prescribed BIK rates |
| Group insurance premium paid by employer | Yes — BIK |
How to remit:
- Generate CP39 (PCB statement) and CP38 (any LHDN-instructed deductions).
- Pay via MyTax by the 15th of the following month.
- Submit Form E annually by 31 March (one-off) summarising all employees and PCB deducted.
Putting it all together — the 15th of every month
Mark these in your calendar as non-negotiable:
- 15th of every month — EPF + SOCSO + EIS + PCB all due.
- 31 March every year — Form E (employer annual return) due. Single largest cause of LHDN compounded fines because directors leave it to the auditor.
- 30 April every year — Form CP21A (employee leaving Malaysia) and Form CP22 (new employee) — whenever applicable.
⚠️ Director liability: Under the Income Tax Act §75A, directors are personally liable for unpaid PCB and Form E. Don’t gamble.
Don’t do this manually
Calculating EPF / SOCSO / EIS / PCB by hand is one of the highest-error parts of running a Malaysian SME. Even spreadsheets break — the SOCSO ceiling table changes when an employee turns 60, the EPF rate changes when their wages cross RM 5,000, the PCB rate changes when their bonus pushes them into the next band.
This is exactly what payroll software is for. IntBooks Payroll ships with the 2026 statutory tables baked in — EPF, SOCSO, EIS, PCB, plus EA forms, Form E, CP38, CP39, and bank giro files for direct credit. It’s bundled into the Professional plan and is included in the outsourced payroll service if you’d rather hand the whole thing over.
Related reading
- Payroll Outsourcing in Malaysia — A 2026 Guide
- Why Malaysian SMEs Should Switch from Spreadsheets
- Malaysian Accounting Glossary
Last updated: 10 May 2026. The 2026 contribution rates above were verified against published guidance from KWSP, PERKESO, and LHDN. We refresh this article when any rate changes.