Malaysia Salary Calculator
Calculate employer costs and employee net take-home pay in Malaysia. Includes EPF, SOCSO, EIS, PCB income tax, and optional HRD Corp levy.
Understanding Malaysia Payroll Costs
Malaysia operates a straightforward statutory contribution system that adds approximately 14 to 16 percent on top of gross salary for employer-side costs. The largest component is the Employees Provident Fund (EPF), where the employer contributes 12 to 13 percent depending on salary level. SOCSO and EIS contributions are determined by an official table with RM100 salary brackets, capped at a wage ceiling of RM6,000 per month.
On the employee side, EPF at 11 percent is the largest deduction, followed by PCB (monthly tax deduction) which varies based on income level, marital status, and number of dependants. Malaysia does not have a mandatory 13th month pay, making the total cost structure more predictable compared to neighbouring countries like the Philippines or Indonesia.
Employees Provident Fund (KWSP)
EPF is Malaysia's mandatory retirement savings scheme managed by KWSP (Kumpulan Wang Simpanan Pekerja). Employees contribute 11% of their monthly wages, while employers contribute 13% for employees earning RM5,000 or below, and 12% for those earning above RM5,000. Contributions are calculated on the exact monthly wage with no ceiling.
| Component | Rate | Condition |
|---|---|---|
| Employee share | 11% | All salary levels |
| Employer share | 13% | Salary ≤ RM5,000 |
| Employer share | 12% | Salary > RM5,000 |
| Tax relief cap | RM4,000 / year (for PCB) | |
Social Security & Employment Insurance
SOCSO (PERKESO) provides coverage for employment injury and invalidity. Contributions follow an official table with RM100 salary brackets, not a flat percentage. The wage ceiling is RM6,000 per month — employees earning above this amount contribute at the RM6,000 bracket rate. First Category coverage (injury + invalidity) applies to employees under age 60.
The Employment Insurance System (EIS / SIP) was introduced in 2018 to provide temporary financial assistance to retrenched workers. Like SOCSO, contributions are determined by the same salary bracket table. Both employer and employee contribute equal amounts, with the same RM6,000 wage ceiling.
| Salary Range | SOCSO ER | SOCSO EE | EIS (each) |
|---|---|---|---|
| RM1,001 - RM2,000 | RM34.15 | RM9.75 | RM4.00 |
| RM3,001 - RM4,000 | RM69.15 | RM19.75 | RM8.00 |
| RM5,001 - RM5,600 | RM97.15 | RM27.75 | RM11.20 |
| RM5,601 - RM6,000 | RM98.85 | RM28.25 | RM11.40 |
| Wage ceiling | RM6,000 / month | ||
Monthly Tax Deduction (Potongan Cukai Bulanan)
PCB is Malaysia's pay-as-you-earn income tax system administered by LHDN (Inland Revenue Board). Employers deduct estimated income tax monthly based on the employee's salary, reliefs declared on Form TP1, and the progressive tax brackets. A tax rebate of RM400 applies if chargeable income does not exceed RM35,000 annually.
| Chargeable Income (Annual) | Tax Rate |
|---|---|
| First RM5,000 | 0% |
| RM5,001 - RM20,000 | 1% |
| RM20,001 - RM35,000 | 3% |
| RM35,001 - RM50,000 | 6% |
| RM50,001 - RM70,000 | 11% |
| RM70,001 - RM100,000 | 19% |
| RM100,001 - RM400,000 | 25% |
| RM400,001 - RM600,000 | 26% |
| RM600,001 - RM2,000,000 | 28% |
| Above RM2,000,000 | 30% |
Human Resources Development Corporation
HRD Corp (formerly HRDF) is a government agency that collects a levy from employers to fund employee training and development. Employers in covered industries with 10 or more Malaysian employees must pay 1% of each employee's monthly wages. Employers with 5 to 9 employees may register voluntarily at a reduced rate of 0.5%. The levy is employer-only — no amount is deducted from the employee. Covered sectors include manufacturing, services, mining, quarrying, construction, and several others as gazetted by the Minister.
Payment Deadlines
All statutory contributions must be remitted by the 15th of the following month. Late payments attract penalties: EPF charges a dividend loss plus 10% penalty; SOCSO and EIS impose penalties under the relevant Acts; LHDN charges a 10% PCB late payment penalty. Employers are responsible for ensuring timely remittance of both employer and employee portions.
| Contribution | Deadline | Late Penalty |
|---|---|---|
| EPF (KWSP) | 15th of next month | 10% + dividend loss |
| SOCSO (PERKESO) | 15th of next month | Under SOCSO Act |
| EIS (SIP) | 15th of next month | Under EIS Act |
| PCB (LHDN) | 15th of next month | 10% penalty |
| HRD Corp | 15th of next month | Under PSMB Act |
Malaysia Salary Calculator FAQ
Common questions about payroll contributions and tax in Malaysia.
The PCB (Potongan Cukai Bulanan) schedule used by employers follows the Jadual PCB issued by LHDN, which uses a specific lookup methodology that factors in cumulative earnings, reliefs claimed on the TP1 form, and prior months’ deductions. This calculator estimates PCB by annualising the monthly salary, applying standard reliefs, and dividing by 12. Real PCB may differ slightly due to rounding conventions, bonus months, or additional reliefs not modelled here.
Foreign workers are not required to contribute to EPF but may opt in voluntarily. If they do, the employee contributes 11% and the employer contributes RM5 per month (not the standard 12-13%). SOCSO First Category contributions are mandatory for foreign workers earning RM6,000 or below, and EIS does not apply to non-Malaysian employees.
The SOCSO (PERKESO) insured wage ceiling remains at RM6,000 per month. Employees earning above this amount still contribute based on the RM6,000 bracket. The contribution amounts are fixed according to the official table rather than calculated as a straight percentage.
HRD Corp (formerly HRDF) levy is mandatory for employers in covered industries with 10 or more Malaysian employees, at 1% of monthly wages. Employers with 5 to 9 employees may register voluntarily at 0.5%. Sectors covered include manufacturing, services, mining, and more. The levy funds employee training and upskilling programmes.
Beyond the individual (RM9,000), spouse (RM4,000), and child (RM2,000) reliefs modelled here, employees can claim relief for medical expenses (up to RM10,000), lifestyle expenses (RM2,500), education fees (RM7,000), SSPN savings (RM8,000), private retirement scheme (RM3,000), life insurance (RM3,000), and several others. The full list is published annually by LHDN (Inland Revenue Board).
No. Unlike the Philippines, Malaysia does not have a statutory 13th month pay requirement. Bonuses are discretionary and determined by employment contracts or company policy. Some government servants receive a minimum bonus equivalent, but this does not apply to private sector employees by law.
