Malaysia Employment Cost Calculator

Roughly 13–15.5% for a Malaysian employee: EPF 13% (wages RM5,000 and below) or 12% (above), SOCSO about 1.75% and EIS 0.2% (both capped at the RM6,000 ceiling), plus the 1% HRD Corp levy for employers with 10+ Malaysian employees. Because SOCSO and EIS cap at RM6,000, the marginal cost of a senior hire above that level is essentially just EPF — which makes Malaysia one of the cheaper places in Asia to load a senior salary.

Employer: 13% for monthly wages of RM5,000 and below, 12% above RM5,000. Employee: 11%. A detail most calculators miss: for wages up to RM20,000 the exact ringgit amounts follow the EPF Third Schedule wage brackets (RM20 steps up to RM5,000, then RM100 steps), with contributions rounded up to the next ringgit — so the deduction is slightly higher than a straight percentage. Above RM20,000 the percentage applies to actual wages. This calculator implements the Third Schedule exactly.

Yes — since 1 October 2025, EPF contributions of 2% employer + 2% employee are mandatory for non-Malaysian-citizen employees holding valid passes (domestic servants excepted). The balance is withdrawable when the employee permanently leaves Malaysia. Foreign employees are also covered by SOCSO's Employment Injury Scheme (about 1.25%, employer-borne) but not EIS. This calculator models a Malaysian employee.

Under the First Category (Employment Injury + Invalidity), the employer pays about 1.75% and the employee 0.5%, using PERKESO's contribution schedule of fixed amounts per wage bracket. Since 1 October 2024 the insured wage ceiling is RM6,000 per month, so contributions max out at RM104.15 (employer) and RM29.75 (employee). Employees over 60 fall under the Second Category (Employment Injury only, 1.25% employer-borne).

EIS, administered by PERKESO, provides income support and re-employment services for retrenched workers. Employer and employee each contribute 0.2% of monthly wages, capped at the RM6,000 ceiling (maximum RM11.90 each per month). Foreign employees are not covered by EIS.

A 1% monthly levy on wages plus fixed allowances, mandatory for employers with 10 or more Malaysian employees (employers with 5–9 may register voluntarily at 0.5%). The levy funds training claims through HRD Corp — money you can recover by actually training your team. Toggle it off in this calculator if you are below the threshold.

PCB (Potongan Cukai Bulanan) annualises the monthly remuneration and subtracts tax reliefs: RM9,000 individual, EPF contributions capped at RM4,000/year, SOCSO + EIS capped at RM350/year, RM4,000 for a non-working spouse and RM2,000 per child under 18. LHDN's formula then computes annual tax as (P − bracket floor) × rate + B — where B embeds the RM400 individual rebate for chargeable income up to RM35,000 — divides by 12 and rounds to the nearest 5 sen. Employers must remit PCB to LHDN by the 15th of the following month. This calculator uses the standard single-month method; actual payroll PCB also accounts for year-to-date income, bonuses and benefits-in-kind.

Resident rates on annual chargeable income: 0% to RM5,000; 1% to RM20,000; 3% to RM35,000; 6% to RM50,000; 11% to RM70,000; 19% to RM100,000; 25% to RM400,000; 26% to RM600,000; 28% to RM2,000,000; and 30% above RM2 million.

Non-residents pay a flat 30% on Malaysian employment income with no reliefs or rebates. Tax residency triggers at 182 days of physical presence in a calendar year (with linked-period rules). Important for remote workers: income from work physically performed in Malaysia is Malaysian-sourced and taxable there — regardless of where the employer or the bank account sits.

Common examples: travel/petrol allowances for official duties (within LHDN's published limits, e.g. RM6,000/year) and meal allowances provided on a regular basis. Statutorily, EPF wages also exclude service charges, overtime and gratuities. Structuring part of a package as properly documented exempt allowances is legitimate and can improve take-home pay — use the separate allowance field in this calculator to model it.

RM1,700 per month under the Minimum Wages Order 2024 — in force for employers with 5+ employees from 1 February 2025, and extended to all employers, including those with fewer than 5 staff, from 1 August 2025. Fines run up to RM10,000 per underpaid employee.

No statutory requirement — unlike Indonesia's THR or the Philippines' 13th month. A one-month bonus (contractual or discretionary) is common market practice, and once written into the contract it becomes enforceable. Draft bonus clauses as discretionary if you mean discretionary, and budget one month of gross if your offer promises it.

Statutory minimum notice under the Employment Act 1955: 4/6/8 weeks by tenure (under 2 years / 2–5 years / 5+ years); professional contracts usually set 1–3 months. Employees earning up to RM4,000/month get statutory termination benefits of 10/15/20 days' wages per year of service. Dismissal requires just cause or excuse — Malaysia is not at-will, and unfair-dismissal claims go to the Industrial Court with awards of up to 24 months' back wages. See our Doing Business in Malaysia guide for the full picture.

An Employer of Record (EOR) is the fastest, lowest-risk way to run Malaysia payroll without a local entity. The EOR employs your team through its licensed Malaysian entity, files EPF, SOCSO, EIS and PCB, issues compliant payslips and can sponsor Employment Passes. It is the right choice when you (a) need to onboard in 1–2 weeks rather than 10–14+ weeks for entity setup — bank account, RM500K paid-up capital and ESD registration included, (b) plan to hire a small team and want to skip ongoing compliance overhead, or (c) want to test the market before committing capital. For larger headcount or local invoicing, an Sdn Bhd becomes more cost-efficient — see our Malaysia EOR guide.

Yes — Aniday's Malaysia Employment Cost Calculator is completely free, requires no sign-up, and applies the current EPF Third Schedule, PERKESO SOCSO/EIS contribution schedules, HRD Corp levy and LHDN's progressive PCB formula with personal, spouse and child reliefs. Use it to budget headcount, quote candidates a package that hits their target net, or estimate the all-in cost of a Malaysia payroll engagement.