On this page
- Legal Requirements
- What a Malaysian Salary Slip Must Include
- Header Section
- Earnings Section
- Deductions Section
- Summary
- EPF (Employees Provident Fund) in Detail
- EPF Contribution Rates
- What Counts as "Wages" for EPF
- SOCSO (PERKESO) in Detail
- Two SOCSO Schemes
- SOCSO Contribution Table (Simplified)
- EIS (Employment Insurance System) in Detail
- EIS Rates
- PCB (Monthly Income Tax Withholding)
- Income Tax Rates for Residents (YA 2026)
- How PCB Is Calculated
- Monthly Employer Compliance Calendar
- Sample Malaysian Salary Slip
- Generate Malaysian Salary Slips
- Common Errors in Malaysian Payroll
- Summary
Malaysian employers are legally required to issue salary slips under the Employment Act 1955 and Wages Council Act 1947. The slip must document deductions from the employee's wages — and those deductions are more complex than many employers expect, covering EPF (Employees Provident Fund), SOCSO (Social Security Organisation), EIS (Employment Insurance System), and PCB (Potongan Cukai Bulanan, or monthly tax deduction).
This guide covers what a Malaysian salary slip must include, how each statutory deduction is calculated, and how to generate them correctly.
Legal Requirements
| Legislation | Requirement |
|---|---|
| Employment Act 1955 (EA) | Employer must provide a wage slip showing particulars of wages for each wage period; applies to employees earning up to RM4,000/month in Peninsular Malaysia (2023 amendment expanded coverage) |
| Employees Provident Fund Act 1991 | EPF contributions mandatory for Malaysian citizens and PRs |
| Employees' Social Security Act 1969 | SOCSO contributions mandatory for employees below age 60 |
| Employment Insurance System Act 2017 | EIS contributions mandatory for private sector employees |
| Income Tax Act 1967 (PCB) | Monthly tax withholding under the CP38 / PCB scheme |
| Wages Council Act 1947 | Wage records must be maintained for 6 years |
The Employment Act 2022 amendments (effective January 2023) extended EA coverage to all employees, removing the previous RM2,000 salary threshold. This means EA salary slip requirements now apply to virtually all private sector employees.
What a Malaysian Salary Slip Must Include
Header Section
| Field | Notes |
|---|---|
| Company name | Registered name with SSM (Companies Commission of Malaysia) |
| Company registration number | SSM registration number |
| Employee name | Full name as per NRIC |
| Employee ID | Internal reference |
| Employee NRIC / Passport number | For foreign workers, passport |
| EPF member number | 12-digit EPF account |
| SOCSO number | Employer's SOCSO account reference for the employee |
| EIS number | Employment Insurance System number |
| Income Tax number | Employee's tax file number (no. cukai pendapatan) |
| Job position / Grade | Current role |
| Department | |
| Month / Year | Month of payment |
| Payment date | Date wages were paid |
Earnings Section
| Component | Notes |
|---|---|
| Basic salary | Contracted monthly rate |
| Overtime pay | Capped at 1.5× ordinary rate for EA-covered employees |
| Allowances | Transport, housing, meal, shift allowances |
| Bonus | Performance, contractual, discretionary |
| Commission | Sales-based pay |
| Leave encashment | Untaken leave paid out |
| Arrears | Backdated pay adjustments |
| Ex-gratia | Additional discretionary payments |
| Gross pay | Sum of all earnings |
Deductions Section
| Deduction | Notes |
|---|---|
| EPF (employee) | 11% or 9% of gross (see below) |
| SOCSO (employee) | 0.5% of gross (maximum RM19.75/month) |
| EIS (employee) | 0.2% of gross (maximum RM9.90/month) |
| PCB (income tax) | Monthly tax withholding based on tax bracket and deductions |
| Unpaid leave | Deduction for approved unpaid leave |
| Salary advance recovery | Repayment of advances |
| Loan repayment | Company loans |
| Union subscription | If applicable |
| Total deductions |
Summary
| Gross pay | Total earnings |
| Total deductions | All deductions |
| Net pay | Gross minus total deductions |
EPF (Employees Provident Fund) in Detail
EPF is Malaysia's mandatory retirement savings scheme. Both employer and employee contribute monthly.
EPF Contribution Rates
| Employee Category | Employee Rate | Employer Rate |
|---|---|---|
| Malaysian citizen / PR, age below 60 | 11% | 13% (wages ≤ RM5,000); 12% (wages > RM5,000) |
| Malaysian citizen / PR, age 60 and above | 5.5% | 4% |
| Foreign workers (MyPR holders contribute; other foreigners contribute voluntarily) | — | — |
2024–2026 temporary reduction: The government has occasionally offered temporary EPF rate reductions (to 9%) for employees below age 60 to provide cash flow relief. Check the current EPF circular for the applicable rate.
Wage ceiling: There is no EPF wage ceiling — contributions are calculated on actual monthly wages.
Contributions must be remitted by the 15th of the following month. Late payment is subject to a 6% dividend penalty.
What Counts as "Wages" for EPF
| Included | Excluded |
|---|---|
| Basic salary | Overtime (for EPF purposes, not for SOCSO) |
| Annual bonus | Retrenchment benefits |
| Leave pay | Gratuity |
| Allowances (if contractual) | Retirement benefits |
| Director's fee (for EPF purposes) |
Note: This is a simplified summary. The EPF Act has specific definitions that differ from SOCSO and PCB definitions of "wages."
SOCSO (PERKESO) in Detail
SOCSO is Malaysia's social security organisation, covering work-related injuries and certain non-work-related disabilities and deaths.
Two SOCSO Schemes
| Scheme | Coverage | Who Contributes |
|---|---|---|
| Employment Injury Insurance Scheme (EIIS) | Work accidents, occupational diseases, commuting accidents | Employer only |
| Invalidity Pension Scheme (IPS) | Non-work disability and death | Employer + employee |
Employee eligibility: Malaysian citizens and PRs below age 60. Employees over 60 contribute to EIIS only (employer contribution only, no employee deduction).
SOCSO Contribution Table (Simplified)
SOCSO uses a contribution schedule based on wage bands. For most employees:
| Monthly Wage | Employee Contribution | Total Employer + Employee |
|---|---|---|
| RM1,000 | RM5.00 | RM29.75 |
| RM2,000 | RM9.75 | RM59.50 |
| RM3,000 | RM14.75 | RM89.25 |
| RM4,000 | RM19.75 | RM119.00 |
| Above RM4,000 | RM19.75 (capped) | Maximum capped amounts |
SOCSO wage ceiling: RM5,000/month. Employees earning above RM5,000 are still registered with SOCSO but contributions are calculated on the RM5,000 cap.
Contribution deadline: 15th of the following month, via ASSIST portal.
EIS (Employment Insurance System) in Detail
EIS provides financial assistance and job placement support to employees who lose their jobs through retrenchment or voluntary separation schemes.
EIS Rates
| Rate | |
|---|---|
| Employee | 0.2% of monthly wages |
| Employer | 0.2% of monthly wages |
| Monthly maximum (employee) | RM9.90 |
EIS wage ceiling: RM4,000/month (EIS contribution capped at 0.2% × RM4,000 = RM8.00 employee; maximum table goes to RM9.90 at higher contribution schedule).
Eligibility: Malaysian citizens and PRs in the private sector. Foreign workers are exempt.
Contribution deadline: 15th of the following month, submitted together with SOCSO.
PCB (Monthly Income Tax Withholding)
PCB (Potongan Cukai Bulanan) is Malaysia's employer-operated income tax withholding system. The employer estimates the employee's annual tax liability and withholds it in monthly installments.
Income Tax Rates for Residents (YA 2026)
| Annual Chargeable Income (RM) | Rate |
|---|---|
| 0 – 5,000 | 0% |
| 5,001 – 20,000 | 1% |
| 20,001 – 35,000 | 3% |
| 35,001 – 50,000 | 8% |
| 50,001 – 70,000 | 13% |
| 70,001 – 100,000 | 21% |
| 100,001 – 250,000 | 24% |
| 250,001 – 400,000 | 24.5% |
| 400,001 – 600,000 | 25% |
| 600,001 – 1,000,000 | 26% |
| Above 1,000,000 | 30% |
How PCB Is Calculated
The employer uses either:
- LHDN's PCB calculator (e-Calculator on the LHDN website)
- Payroll software with built-in PCB tables
Inputs required:
- Monthly gross salary
- Employee's marital status
- Number of dependents
- Monthly EPF deduction (reduces taxable income)
- Any additional deductions the employee has declared (life insurance, SSPN, etc.)
PCB is not a flat percentage. It's a monthly installment toward the employee's total annual tax liability. Employees who have declared deductions correctly will owe little or nothing when they file their annual return (Borang BE).
Form CP38: If an employee owes arrears from prior years, LHDN may issue a CP38 directing the employer to make additional monthly deductions. This appears as a separate PCB line on the payslip.
Monthly Employer Compliance Calendar
| Deadline | Obligation |
|---|---|
| 15th of following month | EPF contribution via EPF i-Akaun |
| 15th of following month | SOCSO + EIS contribution via ASSIST portal |
| 15th of following month | PCB remittance via e-Data PCB or ByrHASiL |
| March 31 each year | Submit Form E (employer return) to LHDN |
| March 31 each year | Distribute Form EA (employees' income statements) to all employees |
Late EPF contributions: 6% annual dividend penalty + potential summons. Late SOCSO/EIS: 6% late payment penalty. Late PCB: 10% penalty on unremitted amount.
Sample Malaysian Salary Slip
Syarikat ABC Sdn Bhd Kuala Lumpur | SSM: 1234567-A
| Employee: | Ahmad bin Abdullah |
| NRIC: | 880101-14-5678 |
| EPF No: | 10123456789 |
| Month: | March 2026 |
| Payment Date: | 28 March 2026 |
| Earnings | RM | Deductions | RM |
|---|---|---|---|
| Basic Salary | 5,500.00 | EPF (11%) | 605.00 |
| Transport Allowance | 300.00 | SOCSO | 19.75 |
| EIS | 9.90 | ||
| PCB | 320.00 | ||
| Gross Pay | 5,800.00 | Total Deductions | 954.65 |
Net Pay: RM4,845.35
Employer EPF: RM660.00 | Employer SOCSO: RM99.25 | Employer EIS: RM9.90
Generate Malaysian Salary Slips
CleverSlip's Malaysia salary slip generator and Malaysia payslip tool handle:
- EPF calculation at current rates (11% employee, 12%/13% employer)
- SOCSO contribution using the current wage table
- EIS at 0.2% with correct ceiling
- PCB calculation using current LHDN tables
- Formatted salary slip in standard Malaysian layout with all required fields
Common Errors in Malaysian Payroll
| Error | Impact |
|---|---|
| EPF calculated on overtime (overtime excluded from EPF wages) | Overcontribution; employee gets excess in EPF account |
| SOCSO not capped at RM5,000 wage ceiling | Overdeduction for high earners |
| PCB not updated when employee's marital status or dependents change | Incorrect withholding; employee owes tax at year-end |
| Not submitting Form EA by March 31 | LHDN fine + employee cannot file tax return |
| Foreign worker contributions to EPF/SOCSO when not required | Overcontribution; refund process is complex |
| Missing EIS for new employees | Contribution arrears; late penalty |
Summary
Malaysian salary slips must document EPF (11% employee, 13% employer for wages ≤ RM5,000), SOCSO (0.5% employee, capped at RM4,000 wage ceiling), EIS (0.2% employee, capped), and PCB monthly tax withholding. All three statutory contributions must be remitted by the 15th of the following month. The Employment Act 2022 amendments mean these requirements now apply to virtually all private sector employees, not just those below the former RM2,000 threshold.
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