Hiring In Malaysia: Insurance Policies for Employers
In Malaysia employer contributions and costs related to insurance policies in Malaysia, including 1.75% Social Security (SOCSO), 0.20% Employment Insurance (EIS), and 11.00% - 17.20% total employee cost for Provident Fund. Expat workers are subject to different contribution rates. Additionally, the source indicates that Malaysia has a National Wage Consultative Council Act 2011 which obligates the government to review the minimum wage every two years, and that the national minimum wage was increased to 1,500 MYR per month with effect from 1st May 2022.
Here is a more in-depth look into insurance details and insurance coverages.
Insurance details
Employer Payroll Contributions
|
12.00% - 13.00% |
Provident Fund (employees under the age of 60) |
|
|
4.00% - 6.50% |
Provident Fund (employees over the age of 60) |
|
|
1.75% |
Social Security (SOCSO) |
|
|
0.20% |
Employment Insurance (EIS) (monthly salary ceiling of 5,000 MYR) |
|
|
1.00% |
Human Resource Development Fund (over 10 employees) |
|
|
18.95% - 22.45% |
Total Employment Cost |
|
Employee Payroll Contributions
|
11.00% |
Provident Fund (employees under the age of 60) |
|
|
0.00% - 5.50% |
Provident Fund (employees over the age of 60) |
|
|
0.50% |
Social Security (SOCSO) (for workers below the age of 60 the monthly contribution cap is MYR 24.75) |
|
|
0.20% |
Employment Insurance (EIS) (monthly salary ceiling of 5,000 MYR) |
|
|
11.70% - 17.20% |
Total Employee Cost |
|
In Malaysia, offering medical coverage or insurance as a benefit to employees is not mandatory; however, employers must provide the employment insurance system (EIS)
Employer’s Liability insurance is essential for employers to cover legal liabilities for compensating employees for accidental bodily injury or disease arising during employment, including related costs like legal fees and defence expenses.
Disability insurance is another crucial employer insurance, providing income replacement for disabled employees, with benefits kicking in after a waiting period of up to 60 days.
Worker's compensation insurance is mandatory for companies with employees, covering medical expenses for workplace injuries, ensuring employees receive necessary medical care and can file compensation claims.
Life insurance often comprises short-term or accidental death policies, covering final expenses or providing death benefits equal to one year of the employee's salary.
Insurance coverage
SOCSO (Social Security Organisation) in Malaysia provides two insurance schemes for eligible members. The Employee Injury Scheme protects employees against work-related accidents or occupational diseases, offering medical benefits, temporary/permanent disablement benefits, and coverage for dependents and funerals if required. The Invalidity Scheme provides 24-hour coverage for employees suffering from invalidity or death due to any cause, even if unrelated to their employment.
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