Malaysian Salary Deductions Explained: EPF, SOCSO, EIS & PCB (2026)
Understand every deduction on your Malaysian payslip — EPF, SOCSO, EIS, and PCB. Includes 2026 contribution rates, employer vs employee shares, and a worked example.
When you receive your first Malaysian payslip, the gap between your gross salary and take-home pay can be surprising. Four statutory deductions — EPF, SOCSO, EIS, and PCB — can collectively reduce your gross pay by 15 to 25 percent. This guide explains exactly what each deduction is, how the rates are calculated, what you receive in return, and how to verify your own payslip.
Published 2026-01-15 · 8 min read · Salary & Tax
Why Your Gross and Net Salary Differ
Malaysian law requires employers to deduct certain contributions from your salary before paying you. These are not punitive taxes — they are partly contributions to your own savings and insurance funds, and partly income tax prepayments.
The four main deductions are: EPF (Employees Provident Fund), SOCSO (Social Security Organisation), EIS (Employment Insurance System), and PCB (Potongan Cukai Berjadual, the monthly tax deduction). On top of employee deductions, your employer also pays its own contributions into EPF and SOCSO on your behalf.
EPF — Your Retirement Savings
EPF (or KWSP — Kumpulan Wang Simpanan Pekerja) is Malaysia's mandatory retirement savings fund. Both you and your employer contribute a percentage of your monthly salary.
Employee contribution rate: 11% of monthly wages (or 9% for employees aged 60 and above). Employer contribution rate: 13% if your monthly wage is RM5,000 or below; 12% if above RM5,000.
On a RM5,000 salary, you contribute RM550 (11%) and your employer contributes RM650 (13%), totalling RM1,200 per month going into your EPF account. This money is yours — it accumulates interest and is returned at retirement.
| Employee Age | Employee Rate | Employer Rate (≤RM5,000) | Employer Rate (>RM5,000) |
|---|---|---|---|
| Below 60 | 11% | 13% | 12% |
| 60 and above | 0% (optional) | 4% | 4% |
EPF contributions qualify for personal income tax relief of up to RM4,000 per year (combined with life insurance premiums).
SOCSO — Work Injury and Invalidity Protection
SOCSO (PERKESO) provides insurance for workplace injuries, occupational diseases, and permanent invalidity. It operates two schemes: the Employment Injury Scheme and the Invalidity Scheme.
PERKESO raised the wage ceiling for contributions from RM5,000 to RM6,000 effective 1 October 2024. Wages above RM6,000 use the ceiling band. At RM6,000, the official first-category employee contribution is RM29.75 and the employer contribution is RM104.15.
| Monthly Wage | Employee contribution | Employer contribution | Total |
|---|---|---|---|
| RM2,000 | RM10.00 | RM35.00 | RM45.00 |
| RM3,000 | RM15.00 | RM52.50 | RM67.50 |
| RM6,000 (ceiling band) | RM29.75 | RM104.15 | RM133.90 |
EIS — Protection If You Lose Your Job
EIS (Employment Insurance System), managed by SOCSO/PERKESO, was introduced in January 2018 to protect employees who are retrenched or made redundant.
EIS contributions are based on the RM6,000 monthly wage ceiling. At the ceiling, the employee and employer each contribute RM11.90. The calculator approximates the employee contribution at 0.2% up to this ceiling amount; PERKESO's table rounds by wage band.
If you are retrenched, EIS provides a Job Search Allowance (up to 80% of your previous wage for the first month, reducing over subsequent months), career counselling, job matching, and upskilling programmes.
PCB — Your Monthly Income Tax Prepayment
PCB (Potongan Cukai Berjadual) is the monthly tax deduction. Your employer estimates and deducts income tax from your salary each month based on your projected annual income.
PCB is not a separate tax — it is a prepayment of your annual income tax. When you file your tax return with LHDN every April, any overpayment is refunded and any shortfall must be paid.
Your PCB amount depends on your annual income, declared tax reliefs, and whether you are a tax resident. Non-residents pay a flat rate of 28% on employment income with no access to personal reliefs.
Worked Example: RM6,000 Gross Salary
For a Malaysian resident employee below age 60 earning RM6,000 monthly, with no annual bonus or extra declared reliefs, the calculator estimates the following monthly figures.
| Deduction | Amount | Note |
|---|---|---|
| EPF (Employee 11%) | RM660.00 | Goes to your EPF account |
| SOCSO (employee) | RM29.75 | PERKESO official ceiling-band amount |
| EIS (employee) | RM11.90 | At the RM6,000 wage ceiling |
| SKBBK / Lindung 24 Jam (0.75%) | RM45.00 | New from 1 June 2026, capped at RM45/month |
| Estimated monthly tax | RM204.29 | Annualised estimate; actual PCB varies |
| Total Deductions | RM950.94 | Under the calculator's assumptions |
| Take-Home Pay | RM5,049.06 | Estimated monthly net pay (RM5,094.06 without SKBBK) |
At RM6,000, the employer additionally contributes RM720 (EPF 12%) + RM104.15 (SOCSO) + RM11.90 (EIS) = RM836.05. Verify the official contribution-table amounts with PERKESO and your payroll department.
How to Verify Your Payslip
Check your EPF contributions anytime via KWSP i-Akaun (kwsp.gov.my) or the i-Akaun mobile app. Your statement shows contributions from both you and your employer.
For SOCSO and EIS, use the MySocso app or website (perkeso.gov.my) to view your contribution history and coverage status.
Your EA Form — issued by your employer each February — summarises your annual gross income and total PCB deducted. Review it carefully before filing your tax return.