Contributions to the Employees Provident Fund (EPF, or KWSP in Malay) and the Social Security Organisation (SOCSO, or PERKESO) are two statutory payments Malaysian employers must make for their employees. Once a company hires its first employee, it must register as an employer and pay contributions for that employee every month. This is a legal obligation, not an option.
Besides EPF and SOCSO, employers are also generally required to contribute to the Employment Insurance System (EIS).
Roughly what are the contribution rates?
- EPF: employer and employee each contribute a percentage of monthly salary, with the employer's share usually slightly higher, and the rate varies slightly by salary band
- SOCSO and EIS: contributions are tiered according to the employee's salary band
These rates are revised from time to time, and the current figures are those in the latest official announcements from EPF and SOCSO.
What are the payment deadlines, and what happens if you pay late?
Employers must pay each month's contributions within the prescribed period, by the 15th of the following month. Late payment attracts penalties and interest, and persistent non-payment may lead to legal liability.
Do foreign employees need contributions too?
Employers of foreign employees who hold a work pass have contribution duties too. Since October 2025 wages, EPF contributions are mandatory for them, at 2% from the employer and 2% from the employee. SOCSO covers them under its Employment Injury Scheme, and they are generally outside EIS. Because contributions must be tied precisely to monthly salary, many businesses include this in their outsourced accounting, to help keep contributions accurately calculated, paid on time and properly reflected in the financial statements.
This content is for general reference only and does not constitute legal or tax advice. For your own situation, please book a consultation so that GXY's advisory team can advise on your actual circumstances. Last updated: 20 August 2026.
