EIS PERKESO Malaysia Guide 2026: Employment Insurance System Benefits, Contribution Rates & How to Claim

Malaysia's Employment Insurance System (EIS), known in Bahasa Malaysia as Sistem Insurans Pekerjaan (SIP), is one of the least understood statutory deductions on a Malaysian payslip — yet it could be the one you are most grateful for if you ever lose your job.

Launched in January 2018 under PERKESO, EIS is a social safety net designed to provide temporary financial assistance to private-sector employees who have been retrenched or lost their jobs through no fault of their own. Instead of burning through savings the moment employment ends, eligible workers receive monthly payments for up to six months while they search for a new role.

If you are checking your payslip and wondering about that small "EIS" deduction, use the free DuitTools salary calculator to see exactly how much you contribute each month alongside EPF, SOCSO, and PCB.

What Is EIS and Who Does It Cover?

EIS is a mandatory scheme under the Employment Insurance System Act 2017 (Act 800) . Every private-sector employer in Malaysia must register and contribute for all employees, with a few exceptions.

Workers covered by EIS

EIS covers all Malaysian workers employed in the private sector, including:

• Permanent employees
• Contract and fixed-term workers
• Part-time employees earning at least RM30 per month
• Foreign domestic workers (maids)
• Workers on probation

Workers NOT covered by EIS

The following categories are exempt from EIS contributions:

• Civil servants — Federal and state government employees are covered by separate government pension or termination schemes
• Statutory body employees — Workers at bodies like Bank Negara, MIDA, and other statutory authorities
• Local authority employees — City council and municipal council workers
• Self-employed individuals — Freelancers, sole proprietors, and gig workers
• Business owners — Partners in partnerships and company directors
• Domestic servants — Other than foreign domestic workers, local domestic helpers are excluded
• Spouses of sole proprietors or partners — Family members working in the family business
• Employees aged 57 and above — Those who have already reached the mandatory retirement age under the Minimum Retirement Age Act
• Foreign workers — Expatriates and foreign labourers (other than domestic workers from specified source countries)

The age limit is important: if your employment is terminated after your 57th birthday, you are not entitled to EIS benefits. For workers aged 55 to 57 who are retrenched, EIS coverage applies but the benefit duration is shorter.

EIS Contribution Rates for 2026

EIS contributions are shared between employer and employee, with the employer paying a slightly larger share. The rates are set by the government and are intentionally low — the monthly deduction is often less than the price of a cup of coffee.

Contribution table

As you can see, the maximum employee contribution is capped at just RM2.10 per month — RM25.20 per year. For that modest amount, you unlock up to six months of income replacement if you lose your job. Few insurance products in Malaysia offer a better cost-to-benefit ratio.

EIS Benefits: What You Can Claim

EIS provides two broad categories of financial assistance: interim benefits while you are unemployed, and re-employment support to help you find your next job.

Job Search Allowance (JSA)

The Job Search Allowance is the main EIS benefit. If you are retrenched and actively looking for work, you receive a monthly cash payment based on your previous salary.

Important: You must be actively looking for work and participating in PERKESO's re-employment placement programme to continue receiving payments. This is not an unconditional free payout — it is a bridge while you job hunt.

For workers aged 55 to 57 at the time of retrenchment, the Job Search Allowance is limited to Months 1 through 3 only.

Reduced Income Allowance (RIA)

If you take a new job that pays less than your previous salary, EIS can top up the difference for a limited period. The RIA pays 50% of the difference between your old and new salary, capped at RM500 per month, for up to 3 months.

This encourages you to accept a reasonable job offer quickly rather than holding out for a perfect match while your savings deplete. Combined with your new salary, the net income should be close to what you earned previously during the transition period.

Early Re-Employment Allowance (ERA)

If you find a new job before exhausting your six months of JSA, EIS pays you a one-time lump sum equal to 25% of the remaining JSA entitlement. This is a direct financial incentive to return to the workforce faster — the sooner you secure employment, the larger the payout.

Training and Placement Support

Beyond cash payments, EIS funds re-employment programmes through PERKESO's employment services:

• Career counselling and job matching through the MYFutureJobs portal
• Skills training courses to close gaps between your current qualifications and what employers are hiring for
• Interview preparation and CV review services
• Industry partnerships with employers actively recruiting

How to Claim EIS: Step-by-Step

The claim process is handled through PERKESO. Here is the sequence:

1. Confirm your eligibility

Before starting, verify that:

• You were employed in the private sector (not government)
• You were under 57 years old at the time of retrenchment
• You have made at least 12 months of EIS contributions in the 24 months prior to job loss
• Your job loss was involuntary — resignation, mutual separation with compensation, and dismissal for misconduct do not qualify
• Your employer issued a formal termination letter stating retrenchment as the reason

2. Gather your documents

Prepare these before applying:

• MyKad (NRIC) — original and photocopy
• Termination letter from employer — must state retrenchment, redundancy, or company closure as the reason
• Latest 6 months' payslips
• Bank account statement showing active account details
• Form SIP-1 (Job Search Allowance application) — downloadable from the PERKESO website

3. Submit your application

Applications must be submitted within 60 days from the date of job loss. Late applications may be rejected.

You can submit through:

• PERKESO office — Walk in to the nearest PERKESO state or branch office. An officer will verify your documents and guide you through the process.
• MYFutureJobs portal — Register at myfuturejobs.gov.my, create your profile, and submit your EIS claim through the online system.
• Employer-assisted submission — Your former employer can assist by submitting documents directly to PERKESO, though the employee remains the claimant.

4. Attend the interview

After submitting, PERKESO schedules an interview to verify your circumstances and understand your skills, experience, and re-employment goals. This is also when they register you in the MYFutureJobs system and begin matching you with vacancies.

5. Receive payments and participate in placement

Once approved, monthly JSA payments are credited to your bank account. You must:

• Report to PERKESO as scheduled (usually monthly check-ins)
• Apply for jobs through MYFutureJobs or independently
• Attend any training programmes prescribed
• Accept a reasonable job offer if one is made

Failure to comply with re-employment requirements can result in suspension or termination of benefits.

Common EIS Questions

What if my employer did not register me or pay EIS contributions?

The employer is legally required to register and contribute. If they failed to do so, you can report them to PERKESO, which may take enforcement action including fines and prosecution. However, for your EIS claim, PERKESO may still process your application if you can prove you were a legitimate employee — the EIS Act includes provisions to protect workers whose employers default on contributions.

Can I claim EIS if I resign voluntarily?

No. Voluntary resignation, mutual separation agreements (MSS) with compensation packages, retirement at mandatory age, and dismissal for proven misconduct are all excluded. EIS is specifically for involuntary job loss due to retrenchment, redundancy, or company closure.

What happens if I find a job in month 2?

You stop receiving JSA from the month you start your new job. However, you may qualify for the Early Re-Employment Allowance — a lump sum of 25% of the remaining months' JSA entitlement. If your new salary is lower than your old one, you can also claim the Reduced Income Allowance for up to 3 months to bridge the gap.

Is EIS the same as SOCSO?

No. SOCSO covers workplace injury, occupational disease, and permanent invalidity. EIS covers job loss due to retrenchment. Both are managed by PERKESO, and both appear as separate line items on your payslip, but they are distinct schemes with separate contribution rates and benefit structures.

Do I get my EIS contributions back if I never claim?

No. EIS is an insurance scheme, not a savings account. Like any insurance, contributions are pooled to fund benefits for those who do need to claim. There is no refund of contributions at retirement or any other point.

Can foreign workers claim EIS?

Generally, no. The EIS Act covers Malaysian citizens and permanent residents employed in the private sector. Foreign domestic workers are included in the contribution requirement but receive limited benefit coverage. Most foreign workers and expatriates are excluded from the benefit side of the scheme.

Check Your EIS Deduction Every Month

The employee's share of EIS is so small — a maximum of RM2.10 per month — that many people overlook it on their payslip entirely. But understanding every line item on your payslip matters. It confirms your employer is meeting their statutory obligations and that your social safety net is intact.

To see a full breakdown of your monthly salary including EIS, EPF, SOCSO, and PCB deductions, use the free DuitTools salary calculator. It calculates every statutory deduction based on your gross salary and displays them in a clear, itemised table — exactly as they should appear on your payslip.

If you are an employer managing payroll for a team, the DuitTools PCB calculator helps you compute monthly tax deductions correctly so you stay compliant with LHDN requirements.