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Employer Payroll Obligations in Malaysia

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By Axecta Management Services, Kuala Lumpur · Last verified: 29 October 2026

Short answer. A Malaysian employer must register with the relevant agencies, deduct and pay statutory contributions (EPF, SOCSO, EIS) and monthly tax deductions (PCB) on time, issue payslips, keep employment records and meet annual reporting duties. Rates, ceilings and due dates are set by KWSP, PERKESO and LHDN, so confirm them on each agency’s site.

Axecta provides payroll processing and employer compliance for companies across Malaysia. Talk to our team.

In this article

  1. Employer registrations required
  2. Monthly contributions and deductions overview
  3. Payslips, records and retention
  4. Employment Act coverage
  5. Annual statements and filings
  6. Foreign worker considerations
  7. Where outsourcing helps
  8. What the agencies state
  9. A new employer’s registration order
  10. Annual cycle
  11. Frequently asked questions

Employer registrations required

When you hire your first employee, register the company as an employer with:

Depending on your industry and headcount, you may also deal with HRD Corp. Check each agency for the registration process.

Monthly contributions and deductions overview

ItemCollected byWho pays
EPFKWSPEmployer and employee shares
SOCSOPERKESOEmployer and employee shares, depending on coverage
EISPERKESOEmployer and employee shares, depending on coverage
PCB (monthly tax deduction)LHDNDeducted from the employee’s pay

The rates, wage ceilings and categories are set by the agencies and change. See EPF, SOCSO and EIS contributions explained and what PCB is.

Payslips, records and retention

Need this done for you? Axecta’s payroll processing and employer compliance team can handle this for your company. See the payroll processing and employer compliance service.

Employers should issue payslips that show gross pay, deductions and net pay, and keep employment and payroll records for the period the law requires. The Employment Act 1955 sets requirements for employees it covers, including wage payment, records and certain entitlements.

Employment Act coverage

The Act’s coverage depends on the employee’s wage level and type of work, and has been updated by amendments. Check whether it applies to each employee. Even where it does not, your contract and company policy should set out terms clearly.

Annual statements and filings

Dates are set by each agency. See the compliance calendar.

Foreign worker considerations

Foreign employees have different statutory treatment, and their employment depends on the right immigration approvals. Rules differ for EPF, SOCSO and levy-related items, so check the agency guidance for each case.

Where outsourcing helps

Payroll is a monthly job with fixed deadlines, and mistakes create penalties and unhappy staff. Axecta’s payroll team computes pay, statutory contributions and PCB, files and pays on time, issues payslips and reconciles payroll to your books. See outsourced payroll services: what do they include?.

What the agencies state

EPF. KWSP’s mandatory contribution page shows the employer share by employee category: for example 13% for an employee under 60 earning below RM5,000 as the page’s example, 4% for Malaysian employees aged 60 and over (with no employee share), and 2% from both employer and employee for non-Malaysians registered from 1 August 1998. Actual amounts come from the Third Schedule table; see the October 2025 Third Schedule.

SOCSO and EIS. PERKESO’s contribution rate page and contributions page, as shown in search extracts, give 1.75% (employer) and 0.5% (employee) for the first SOCSO category (employees under 60), 1.25% employer-only for the second category, EIS of 0.4% split 0.2% each, and a wage ceiling of RM6,000 from October 2024. One PERKESO page also refers to a non-employment injury contribution phased in from 1 June 2026. Another older page shows a RM4,000 ceiling, so use the current table. See PERKESO’s foreign worker page for foreign employees.

A new employer’s registration order

  1. Register with KWSP and PERKESO before the first payday.
  2. Set up LHDN employer records for PCB.
  3. Prepare contracts and payslips.
  4. Configure payroll with current tables.
  5. Calendar monthly due dates.

Annual cycle

At year-end reconcile payroll to the ledger, prepare employee statements and file the employer annual return with LHDN. Dates are in LHDN’s notices; see the compliance calendar.

Frequently asked questions

What are an employer’s obligations?

Register with KWSP, PERKESO and LHDN, deduct and pay contributions and PCB, issue payslips, keep records and meet annual filings.

Which registrations are needed?

EPF with KWSP, SOCSO and EIS with PERKESO, and PCB with LHDN, plus any sector-specific ones.

What must a payslip show?

Gross pay, deductions and net pay at minimum. Check the Employment Act and your contract for the details.

Do small employers need payroll software?

Not necessarily, but accuracy and deadlines matter. Axecta offers payroll processing for small teams.

What is the EPF rate for employees under 60?

KWSP’s page gives 13% as the employer example for wages below RM5,000, with exact amounts in the Third Schedule table.

What is the SOCSO wage ceiling?

A PERKESO page states RM6,000 from October 2024. Confirm in the current table.

Where are foreign worker rules?

On the KWSP and PERKESO foreign worker pages.

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Official sources to check

This article is general information and not legal, tax or accounting advice for your company. Rates, thresholds, deadlines and procedures change, so confirm current requirements with the sources above or with Axecta.