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Q：
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What are the statutory contributions and deductions for Employees in Malaysia?
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A：
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Employees Provident Fund (EPF);
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Social Security Organisation (SOCSO);
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Employee Insurance System (EIS);
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Monthly tax deductions (PCB); and
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Human Resources Development Fund (HRDF) levy.
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Q：
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What is the purpose of EPF contribution?
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A：
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The EPF is a government-managed fund designed to assist Malaysian workers in saving for their retirement. Contributions are deducted from an employee's salary and paid to the EPF by the employer on their behalf. Additionally, the employer is required to contribute to the EPF for each employee.
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Q：
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What is the purpose of SOCSO contribution?
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A：
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SOCSO contributions are mandatory for all employees, regardless of their nationality or residency status. It provides coverage for work-related accidents, illnesses, and disabilities.
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Q：
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What is the purpose of EIS contribution?
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A：
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EIS is a mandatory deduction from an employee’s wages for most Malaysian citizens and permanent residents. Employers in the private sector are required to make monthly contributions on behalf of their employees. EIS provides short-term financial aid and assistance to individuals who are unemployed.
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Q：
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Is it mandatory for employers to make a monthly tax deduction?
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A：
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Under the Income Tax Act 1967, employers shall deduct taxes from an employee’s salary every month. The employer is responsible for remitting these deductions to the Inland Revenue Board of Malaysia by the 15th of the following month.
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Q：
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Under what circumstances employers are required to contribute to the HRDF?
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A：
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The HRDF levy is mandatory for companies employing 10 or more individuals. Companies with 10 or more local employees must register, while those with 5 to 9 local employees may choose to register. This fund helps to finance training and development programs for employees, apprentices, and trainees within the Malaysian workforce.
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FAQ
