EPF, SOCSO, EIS & PCB Malaysia 2026: Full Calculation Guide

It is the 12th of the month. Payroll closes on the 15th, and your EPF figure for one employee does not match what the spreadsheet produced last month, even though her salary has not changed. You check the formula. The formula is fine. The number is still wrong.

This happens because EPF is not a percentage. Most Malaysian employers run their statutory deductions off a spreadsheet built from percentages they were told once, and that spreadsheet is wrong in at least one place within about eighteen months. The rates move, the ceilings move, and in 2026 a fifth deduction arrived.

This guide covers how EPF, SOCSO, EIS, PCB and the new LINDUNG 24 Jam are actually calculated, using the current schedules from KWSP, PERKESO and LHDN. It also covers the two rules that catch people out most often.

The five statutory deductions in 2026

Deduction	Paid by	Governed by	Wage ceiling
EPF (KWSP)	Employer and employee	Third Schedule, EPF Act 1991	None. Percentages apply only above RM20,000
SOCSO (PERKESO)	Employer and employee	Third Schedule, Act 4	RM6,000 per month
EIS	Employer and employee	Second Schedule, Act 800	RM6,000 per month
LINDUNG 24 Jam	Employee only	Non-Employment Injury Scheme	Per PERKESO schedule
PCB (MTD)	Employee, employer remits	Income Tax (Deduction from Remuneration) Rules	None, income-based

1. EPF (KWSP)

Section 43(1) of the EPF Act 1991 requires contributions “on the amount of wages at the rate respectively set out in the Third Schedule”. The schedule below is the current one, effective from October 2025 salary, as published by KWSP’s employer mandatory contribution page.

Employee status	Monthly salary	Below 60	Age 60 and above
Malaysian	No limit	See rows below	Employee 0%, employer 4% (Part E)
Malaysian, PR, or non-Malaysian who registered before 1 August 1998	RM5,000 and below	Employee 11%, employer 13% (Part A)	Employee 5.5%, employer 6.5% (Part C, PR and pre-1998 members only)
Malaysian, PR, or non-Malaysian who registered before 1 August 1998	Above RM5,000	Employee 11%, employer 12% (Part A)	Employee 5.5%, employer 6% (Part C, PR and pre-1998 members only)
Non-Malaysian who registered from 1 August 1998	No limit	Employee 2%, employer 2% (Part F)	Employee 2%, employer 2% (Part F)

Note the employer step. It is 13% at RM5,000 and below, and 12% above RM5,000. The employee share stays at 11% either side of that line.

Why your spreadsheet disagrees with KWSP

This is the rule that produces the mismatch described at the top. KWSP states it plainly:

Employers are not allowed to calculate the employer’s and employee’s share based on exact percentage EXCEPT for salaries that exceed RM20,000.00. The total contribution which includes cents shall be rounded to the next ringgit.

So for anyone earning RM20,000 a month or less, which is almost everyone, the contribution is a wage-band lookup, not a multiplication. The Third Schedule groups wages into bands, and every salary inside a band contributes the same ringgit amount.

Two consequences follow. A salary of RM3,990 and a salary of RM4,000 can produce an identical EPF figure. And percentage math will disagree with the schedule by a ringgit or two per employee, in a direction that is not consistent.

Across 80 staff, a ringgit here and there is not a rounding curiosity. It is a reconciliation gap that surfaces at year end, when the EA Forms have to agree with twelve months of submissions. Use the percentages to sanity-check the size of a number. Take the number itself from the Third Schedule or KWSP’s own contribution calculator.

Foreign workers

Non-Malaysians who registered as members from 1 August 1998 contribute 2% employee and 2% employer under Part F, with no wage ceiling, effective from October 2025 salary.

If you employ foreign staff, note that they sit on a different footing in two of the five deductions, EPF and LINDUNG 24 Jam. Running one deduction rule for everybody is the most common way this goes wrong.

Deadline

EPF contributions are due on or before the 15th of the following month. January salary makes February the contribution month, payable by 15 February. Late payment carries a dividend-based charge with a minimum of RM10.

2. SOCSO (PERKESO, Act 4)

The change to know first: the wage ceiling rose from RM5,000 to RM6,000 effective 1 October 2024. Wages above RM6,000 contribute at the RM6,000 amount. PERKESO sets this out on its contribution rate page.

PERKESO splits contributions into two categories.

• First Category, employees below 60. Covers the Employment Injury Scheme and the Invalidity Scheme. The rate is 1.75% employer share and 0.5% of the employee’s monthly wages, per the contribution schedule.
• Second Category. The rate is 1.25% of monthly wages, paid by the employer. The employee contributes nothing.

The category rule has an exception that is easy to miss. All employees under 60 belong to the First Category except those who have reached 55 and have no prior contributions before 55, because they were not eligible under the Employees’ Social Security Act 1969. Those employees fall under the Second Category. Eligible new employees aged 55 also go into the Second Category.

As with EPF, the amount you remit comes from the Third Schedule of Act 4. The percentages are for budgeting.

3. EIS (Act 800)

EIS came into force on 1 January 2018 under the Employment Insurance System Act 2017. It gives employees who lose their job access to job-search allowance, early re-employment allowance, training and placement support.

Who contributes. All private sector employers, for each employee. Government employees, domestic workers and the self-employed are exempt. All employees aged 18 to 60 must contribute, with one exception: employees aged 57 and above who have no prior contributions before 57 are exempt.

The rate. EIS is 0.4% of the employee’s assumed monthly salary, split 0.2% employer and 0.2% employee. Rates sit in the Second Schedule under Section 18 of the Act, capped at an assumed monthly salary of RM6,000. At the ceiling that is about RM12 from each side. Source: PERKESO, contributions.

4. LINDUNG 24 Jam, new for 2026

This is the one most 2026 payroll guides still describe incorrectly, so it is worth being exact. The full LINDUNG 24 Jam employer guide covers the opt-out mechanics and per-employee administration in more depth.

LINDUNG 24 Jam (Skim Kemalangan Bukan Bencana Kerja, or SKBBK) is PERKESO’s Non-Employment Injury Scheme. It covers accidents that happen outside working hours and are unrelated to the job, with medical treatment costs financed by PERKESO.

Who pays

Contributions are borne entirely by the employee. There is no employer contribution. The employer pays on the employee’s behalf for as long as they remain employed. The employee rate rises in phases.

Phase	Period	Employee rate
Phase 1	First two years	0.75%
Phase 2	Next three years	1.0%
Phase 3	Sixth year onwards	1.25%

It is voluntary for local employees

This is the part that changed, and the part many guides have not caught up with. PERKESO’s position:

It is no longer compulsory for local employees. Instead, participation is voluntary, and the contributions are fully borne by the employees. However, it remains mandatory for foreign workers in accordance with existing legal provisions.

For payroll purposes: mandatory for foreign workers, voluntary for local employees. PERKESO publishes a Participation Status Update Form for employees moving from opt-out to opt-in, and a separate process for employees who have more than one employer. Employer Circulars No. 1, 2 and 3 of Year 2026 carry the operational detail, including the contribution text file format.

The practical consequence is that this deduction varies per employee, by choice, and can change mid-year. That is a different kind of problem from a rate change. A single opt-in on the 20th of the month has to reach the payroll run, and a spreadsheet has no mechanism for noticing that it did not.

What it does not cover

• Accidents outside Malaysian territory
• Foreign workers who misuse immigration passes or breach entry conditions under the Immigration Act 1959/63
• Self-employment injuries, which fall under Act 789
• Domestic injuries, under Act 838
• Conditions caused by illness, such as diabetes, fever or high blood pressure

5. PCB (MTD)

PCB, Potongan Cukai Bulanan, now generally called MTD or Monthly Tax Deduction, is the income tax withheld from salary each month and remitted to LHDN.

Unlike the four above, PCB cannot be reduced to a single percentage. The amount depends on chargeable income after EPF relief and other allowable deductions, marital status and whether the spouse is working, the number of children and other claimed reliefs, and any additional remuneration in the month such as bonus, commission or arrears.

Because it is personalised, a generic worked example would mislead. Use LHDN’s computerised calculation method, set out in the 2026 MTD computerised calculation specification (PDF), or payroll software that implements that formula. LHDN also publishes the PCB schedule and data specifications.

Submitting through e-PCB Plus

LHDN has consolidated its older channels, e-PCB, e-Data PCB and e-CP39, into e-PCB Plus on the MyTax portal. The legacy systems became read-only, so if you are still looking for them, register on MyTax instead.

CP39 is the monthly statement of PCB deducted per employee. It is submitted with payment by the 15th of the following month, the same deadline as EPF. See LHDN on PCB payment.

How PCB connects to the EA Form, Form E and CP8D

These three are the year-end counterpart to the monthly deductions on this page. The EA Form, Form E and CP8D filing guide covers who receives each one and the reconciliation between them.

Form	What it is	Goes to	Deadline
EA Form	Annual statement of earnings and deductions	Each employee	Last day of February
Form E	Employer’s annual return declaring all employees and total remuneration	LHDN	31 March
CP8D	Employee-by-employee schedule filed with Form E	LHDN	With Form E

Employees need the EA Form to file their own returns, and it is required for all staff including part-timers and anyone who resigned during the year. LHDN sets out the full list on employer responsibilities. If monthly PCB is accurate throughout the year, the EA Form and Form E reconcile without adjustment and your employees do not arrive at your desk in March with a tax bill they did not expect.

A worked example: RM4,000 a month

A Malaysian employee under 60, earning RM4,000. The SOCSO and EIS percentages below are the official rates. The EPF figure is a guide to size only, because the amount you remit comes from the Third Schedule band.

Contribution	Basis	Employee	Employer
EPF	Third Schedule band for RM4,000, around 11% and 13%	about RM440	about RM520
SOCSO	First Category, 1.75% and 0.5%, under the RM6,000 ceiling	about RM20	about RM70
EIS	0.2% and 0.2% of assumed salary	about RM8	about RM8
LINDUNG 24 Jam	0.75% Phase 1, only if the employee has opted in	about RM30	nil
PCB	Per LHDN computerised calculation	varies with reliefs	nil, employer remits

The employer cost sits on top of gross salary, roughly RM598 a month here before PCB. On 80 staff at this salary that is about RM478,000 a year in employer statutory cost. It belongs in headcount budgeting, not in a surprise at payroll run.

Two Malaysian complications a generic payroll process misses

Public holidays are not one calendar. Malaysia has federal holidays plus holidays set by each state, and they differ. Johor, Kelantan and Terengganu observe a different weekend from the rest of the country. If you have staff in more than one state, you are running several holiday calendars at once, and that feeds directly into overtime and rest-day pay. This is a payroll problem, not an HR admin one. Our leave management and shift management pages cover how working calendars are configured.

Foreign worker payroll is a separate ruleset. As above, foreign staff contribute 2% EPF under Part F and LINDUNG 24 Jam remains mandatory for them while being voluntary for locals. If your workforce is mixed, the deduction logic forks per employee, every month.

Frequently asked questions

Is there a free EPF, SOCSO and EIS calculator?

Yes. KWSP and PERKESO both publish official contribution schedules and calculators, and those should be your reference for exact amounts. Third-party calculators are convenient, but many apply flat percentages, which as set out above is not how EPF below RM20,000 is meant to be computed.

What is the EPF contribution rate in 2026?

For Malaysians and PRs under 60, the employee pays 11% and the employer pays 13% on wages of RM5,000 and below, or 12% above RM5,000. Non-Malaysians who registered from 1 August 1998 pay 2% from each side. Malaysians aged 60 and above: employee 0%, employer 4%.

What is the SOCSO and EIS wage ceiling?

RM6,000 per month, effective 1 October 2024, up from RM5,000. Wages above RM6,000 contribute at the RM6,000 amount.

Which employees are exempt from SOCSO and EIS?

For EIS, government employees, domestic workers and the self-employed are exempt, as are employees aged 57 and above who had no prior contributions before 57. For SOCSO, employees who reached 55 with no prior contributions before 55 fall under the Second Category instead of the First, so the employer pays 1.25% and the employee pays nothing.

Do I have to deduct LINDUNG 24 Jam from local staff?

No. Participation is voluntary for local employees. It remains mandatory for foreign workers.

When is the EA Form due?

By the last day of February each year, to every employee. Form E and CP8D go to LHDN by 31 March.

How is PCB calculated?

Through LHDN’s MTD formula, based on chargeable income, reliefs, marital status and dependants, not a flat rate. Submit through e-PCB Plus on MyTax, with CP39 and payment due by the 15th of the following month.

Why the spreadsheet stops working

None of these calculations is hard. The difficulty is that they do not hold still, and a spreadsheet records a rule rather than following one.

Look at the last two years. The SOCSO and EIS ceiling moved in October 2024. The EPF Third Schedule was updated for October 2025 salary. Foreign worker EPF became mandatory in the same cycle. LINDUNG 24 Jam arrived in 2026, then shifted from compulsory to voluntary for local staff. Any one of those is a small edit. Together they mean a file built in early 2025 is now wrong in three or four places, and nothing in the file will tell you which.

What a system changes is narrow but useful. The schedule version lives in one place instead of in 80 rows of formulas. A per-employee variation, such as a LINDUNG 24 Jam opt-in or a foreign worker on Part F, is a property of the employee record rather than a cell someone has to remember to change. And the monthly output and the annual EA Form come from the same data, so they agree by construction instead of by checking. If you are still reconciling by hand, the signs that a spreadsheet has outgrown its job are fairly consistent.

Two habits help either way. Work from the official schedules: KWSP’s Third Schedule, PERKESO’s Act 4 and Act 800 schedules, and LHDN’s current MTD specification, rather than a percentage you remember. And make sure whoever runs payroll knows which schedule version they are on and when it last changed.

Sources

Every rate, ceiling and deadline in this guide is taken from the following official publications, checked on 14 October 2026.

• EPF: KWSP, Employer Mandatory Contribution, including the Third Schedule effective October 2025 salary
• SOCSO and EIS rates: PERKESO, Contributions
• SOCSO and EIS wage ceiling: PERKESO, Contribution Rate, Act 4 Third Schedule and Act 800 Second Schedule
• LINDUNG 24 Jam: PERKESO, Non-Employment Injury Scheme (SKBBK), with Employer Circulars No. 1 to 3 of Year 2026
• PCB formula: LHDN, Specification for Monthly Tax Deduction (MTD) Computerised Calculation 2026 (PDF)
• PCB schedules and submission: LHDN, PCB Schedule and Data Specification and PCB Payment
• Employer obligations, EA Form and Form E: LHDN, Employer Responsibilities
• e-PCB Plus: MyTax portal

Next step

Smart Salary is a connected HR, payroll and attendance platform with a Malaysian setup, covering payroll, time and attendance and HRIS on one record, which is what lets a monthly run and an annual return agree. It supports the statutory deduction workflow described here, including per-employee variation for foreign staff. [VERIFY]

If you want to see it against your own payroll, book a demo with our Malaysia team. If you are earlier than that and still shortlisting, what to look for in an HRMS in Malaysia is the more useful read first.

Related guides: LINDUNG 24 Jam for employers and EA Form, Form E and CP8D filing.

This guide is general information, not tax or legal advice. Statutory rates and schedules are updated periodically. Confirm current figures against KWSP, PERKESO and LHDN before running payroll or filing. Last reviewed 14 October 2026.