EPF Rate
11%
Employee
SOCSO
RM0.10–21
Monthly
EIS
0.2%
Of Gross Salary
PCB Rates
0%–30%
Progressive Tax
What Is EPF (KWSP) & How Much Is Deducted?
The Employees Provident Fund (EPF), known locally as KWSP or Kumpulan Wang Simpanan Pekerja, is Malaysia's mandatory retirement savings scheme. Every month, both you and your employer contribute a percentage of your salary to your EPF account. These funds earn annual dividends (historically 5–6%) and can be withdrawn upon retirement at age 55, or partially for housing, education, and healthcare.
| Monthly Salary | Employee EPF | Employer EPF |
|---|---|---|
| ≤ RM5,000 | 11% | 13% |
| > RM5,000 | 11% | 12% |
Note: Employees above age 55 contribute at reduced rates. The maximum employee EPF contribution is capped at RM1,100/month.
What Is SOCSO (PERKESO)?
The Social Security Organization (SOCSO), managed by PERKESO, provides social security protection to Malaysian employees. It covers two main schemes: the Employment Injury Scheme (workplace accidents and occupational diseases) and the Invalidity Pension Scheme (long-term disability or death). Both employee and employer contribute monthly based on wage brackets.
| Monthly Wage Bracket | Employee Contribution |
|---|---|
| RM0 – RM30 | RM0.10 |
| RM30.01 – RM50 | RM0.20 |
| RM1,000.01 – RM1,100 | RM4.40 |
| RM2,000.01 – RM2,100 | RM8.40 |
| RM3,000.01 – RM3,100 | RM12.40 |
| RM4,000.01 – RM4,100 | RM16.50 |
| ≥ RM4,900.01 | RM21.00 (max) |
The maximum employee SOCSO contribution is RM21.00/month. Employer contributions range from RM1.75 to RM367.50/month.
What Is EIS (SIP)?
The Employment Insurance System (EIS), or Sistem Insurans Pekerjaan (SIP), provides temporary financial support to employees who lose their jobs. Introduced in 2018, EIS pays a percentage of your previous salary for up to 6 months while you search for new employment. The contribution is just 0.2% of gross salary for both employee and employer, capped at a maximum of RM2.50 each per month.
- Financial aid for up to 6 months after retrenchment
- Job search assistance and career counselling
- Training and upskilling programs
- Early re-employment allowance
What Is PCB (Potongan Cukai Bulanan)?
PCB stands for Potongan Cukai Bulanan — the monthly income tax deduction your employer withholds from your salary and remits to LHDN (Lembaga Hasil Dalam Negeri). Malaysia uses a progressive tax system: the more you earn, the higher your tax rate. PCB is calculated on your estimated annual chargeable income after accounting for EPF relief, personal relief (RM9,000 for individuals), and other allowable deductions.
| Annual Chargeable Income | Tax Rate |
|---|---|
| RM0 – 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% |
| > RM2,000,000 | 30% |
Tax rates are progressive. For example, if you earn RM48,000 chargeable income annually, you pay 0% on the first RM5,000, 1% on the next RM15,000, and so on — not a flat rate on the entire amount.
How Is Net Salary Calculated in Malaysia?
Your take-home pay (net salary) follows a simple formula:
Net Salary = (Base Salary + Allowances + Bonuses)
− EPF − SOCSO − EIS − PCB
Calculate Gross Monthly Income
Add your base salary, fixed monthly allowances (travel, housing, etc.), and any recurring bonuses or commissions.
Subtract EPF (Employee Contribution)
Deduct 11% of your salary (up to RM1,100/month). EPF is calculated on base salary + bonus, excluding most allowances.
Subtract SOCSO
Deduct based on your wage bracket (RM0.10 to RM21.00/month). Your employer matches this at a higher rate.
Subtract EIS
Deduct 0.2% of gross salary (max RM2.50/month). A small contribution with valuable retrenchment protection.
Subtract Estimated PCB
Deduct monthly income tax based on LHDN's progressive rates. This is an advance toward your annual tax liability.
Your Take-Home Pay
The remaining amount is your net salary — the actual money deposited into your bank account each month.
Frequently Asked Questions About Salary in Malaysia
How is salary calculated in Malaysia?
Your gross salary includes your base pay, fixed allowances (travel, housing, etc.), and any monthly bonuses. From this, four mandatory deductions are subtracted: EPF (11% for employees), SOCSO (wage-bracket based), EIS (0.2% of gross), and PCB (progressive income tax). The result is your net take-home pay.
What is the latest EPF contribution rate for 2025?
The statutory EPF rate for 2025 remains at 11% for employees and 13% for employers (for salaries at or below RM5,000). For salaries above RM5,000, the employer rate is 12%. These rates are set by KWSP and apply to all Malaysian employees and permanent residents.
Who needs to pay PCB in Malaysia?
PCB (Potongan Cukai Bulanan) applies to all employees earning above the minimum threshold (approximately RM34,000 annually after EPF relief). Your employer deducts PCB monthly and remits it to LHDN. At year-end, you file a tax return and may receive a refund if too much was deducted.
What is the difference between SOCSO and EIS?
SOCSO (PERKESO) provides coverage for workplace injuries, occupational diseases, and invalidity. EIS (Employment Insurance System) provides temporary financial assistance if you lose your job. Both are mandatory for Malaysian employees, with contributions shared between employee and employer.
Can I opt out of EPF contributions?
No. EPF is mandatory for all Malaysian employees and permanent residents under the Employees Provident Fund Act 1991. However, employees above age 55 contribute at a reduced rate (5.5%), and those above age 60 contribute at 5.5% with reduced employer contributions.
How do I calculate my net salary after all deductions?
Use the free DuitTools salary calculator above. Simply enter your monthly salary, any bonuses, and fixed allowances. The calculator instantly shows your EPF, SOCSO, EIS, and PCB deductions, plus your final net take-home pay and your employer's total cost.
Disclaimer: The information on this page is for educational and informational purposes only. Tax rates, EPF contribution rates, SOCSO brackets, and EIS rates are based on publicly available information and may change. Always verify with official sources: KWSP (kwsp.gov.my), PERKESO (perkeso.gov.my), and LHDN (hasil.gov.my). DuitTools is not affiliated with any government agency. Consult a qualified tax professional for advice specific to your situation.