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Malaysia has mandatory EPF (13% employer), SOCSO, EIS, and HRDF levy contributions. Monthly PCB income tax withholding due by the 15th. Rippling handles KWSP, PERKESO, and LHDN filings.
Malaysia is a Southeast Asian upper-middle-income economy with strengths in manufacturing (semiconductors, electronics, palm oil, petroleum), financial services, and a growing technology sector in Kuala Lumpur. Malaysia is a regional hub for shared services centers (SSCs) and BPO operations, hosting major operations of Standard Chartered, HSBC, Accenture, and others. Kuala Lumpur and Penang are the primary business markets. Malaysia uses the ringgit (MYR).
| Contribution | Rate | Notes |
|---|---|---|
| EPF (employer) | 13% or 12% | 13% for salary ≤5,000 MYR; 12% above 5,000 MYR |
| SOCSO (employer) | ~1.75% | Employment injury and invalidity scheme |
| EIS (employer) | 0.4% | Employment Insurance System |
| HRDF levy | 1% | Human Resources Development Fund; employers with 10+ employees in most sectors |
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| Contribution | Rate | Notes |
|---|---|---|
| EPF (employee) | 11% | On monthly wages; reduced to 9% optionally |
| SOCSO (employee) | ~0.5% | Employment injury and invalidity scheme |
| EIS (employee) | 0.4% | Employment Insurance System |
| Income tax (PCB) | 0–30% | Progressive; withheld monthly via Potongan Cukai Bulanan (PCB) system |
| Annual Income (MYR) | Rate |
|---|---|
| Up to 5,000 | 0% |
| 5,001–20,000 | 1% |
| 20,001–35,000 | 3% |
| 35,001–50,000 | 8% |
| 50,001–100,000 | 13% |
| 100,001–400,000 | 21% |
| 400,001–1,000,000 | 24% |
| Above 1,000,000 | 30% |
Monthly PCB withheld by employer and remitted to LHDN by the 15th of the following month.
Notice: as per contract (minimum 4 weeks for employees earning MYR 5,000/month or less under Employment Act). Termination benefits (retrenchment): tiered by years of service — 10 days' wages per year (years 1–2), 15 days (years 2–5), 20 days (5+ years). SOCSO retrenchment notification required.
EPF (Kumpulan Wang Simpanan Pekerja — KWSP) is Malaysia's mandatory retirement savings scheme. Employer contributes 13% (for salary ≤5,000 MYR/month) or 12% (above 5,000 MYR). Employee contributes 11%. Contributions are remitted monthly to EPF by the 15th of the following month. EPF applies to Malaysian citizens and permanent residents; foreign employees may opt in voluntarily.
Malaysia's PCB (Potongan Cukai Bulanan) is the monthly income tax withholding system. Employers calculate and deduct PCB from employee salaries using the LHDN's schedule or e-PCB online calculator, and remit by the 15th of the following month. PCB must be paid even for employees earning below the tax threshold — PCB is a withholding mechanism, not a separate tax. Rippling handles monthly PCB calculation and remittance.
Malaysia's minimum wage is MYR 1,500/month (March 2023) for all employees regardless of sector or location. This applies to both peninsular Malaysia and East Malaysia (Sabah, Sarawak, Labuan). The minimum wage has increased significantly from MYR 1,200 (2020) to MYR 1,500 (2023).
Malaysia has a mandatory Maternity Protection Act providing 98 days of paid maternity leave (increased from 60 days for employers with 5+ employees in 2023). Paternity leave: 7 days paid (government sector employees; private sector employers encouraged but not mandated). Employers must pay full salary during maternity leave; there is no SOCSO reimbursement for maternity.
