EIS Contribution Malaysia 2026: Rates & Guide

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Published By: WebHR Team

EIS Contribution Malaysia 2026: Rates & Guide

EIS Contribution Malaysia is a monthly employment insurance contribution paid by eligible employees and employers to PERKESO. EIS stands for Employment Insurance System, while the scheme is also known as Sistem Insurans Pekerjaan (SIP) or LINDUNG KERJAYA in Malaysia.

The system is designed to provide temporary income support and re-employment assistance to eligible workers who lose their jobs. For payroll purposes, the standard contribution is shared equally between the employer and employee, with each side contributing an amount based on 0.2% of the employee's assumed monthly wages according to the official contribution schedule.

As of 2026, EIS contributions are subject to a maximum wage ceiling of RM6,000 per month. Employers should use PERKESO's current Act 800 contribution schedule when calculating the actual amount rather than relying only on a direct percentage calculation.

Last reviewed: August 2026.

What Is EIS Contribution in Malaysia?

The Employment Insurance System is a social protection scheme administered by PERKESO under the Employment Insurance System Act 2017, also known as Act 800. The system came into force in 2018 and is intended to support insured employees when they experience a qualifying loss of employment.

Employers make the monthly payment to PERKESO on behalf of eligible employees. One portion is paid by the employer and another portion is deducted from the employee's wages through payroll. These contributions build the employee's contribution record, which can later affect eligibility for EIS benefits after a qualifying job loss.

EIS should not be confused with ordinary unemployment savings held in an employee's personal account. Contributions are paid into the Employment Insurance Fund and are used to finance eligible benefits and re-employment program under Act 800.

What Is the EIS Contribution Rate in Malaysia for 2026?

The standard EIS contribution rate in Malaysia is based on a total of 0.4% of the employee's assumed monthly wages. The employer contributes an amount based on 0.2%, while another amount based on 0.2% is deducted from the employee's wages.

This means the cost is shared equally between the employer and employee. However, PERKESO publishes an official contribution schedule containing wage bands and fixed contribution amounts, so employers should use the schedule when processing actual payroll.

The current schedule applies up to the RM6,000 contribution wage ceiling. Once wages exceed this ceiling, the EIS contribution does not continue increasing with the employee's full salary.

Employer EIS Contribution Rate

The employer portion of EIS is based on 0.2% of the employee's assumed monthly wages, subject to the official Act 800 contribution schedule and the RM6,000 wage ceiling.

This employer amount is an additional payroll cost. It should not be deducted from the employee's salary because Act 800 separately identifies an employer contribution and an employee contribution.

Employers are responsible for submitting both portions to PERKESO each month. Accurate wage information is therefore necessary before payroll is finalized and the EIS contribution is submitted.

Employee EIS Contribution Rate

The employee also contributes an amount based on 0.2% of assumed monthly wages. The employee share is deducted through payroll before the employee receives final net pay.

The amount deducted should match the applicable wage band in PERKESO Act 800 schedule. For that reason, employers should not simply enter a universal 0.2% formula without confirming that the result agrees with the official contribution amount.

The employer then sends the employee portion to PERKESO together with its own contribution as part of the monthly EIS payment.

What Is the EIS Wage Ceiling in Malaysia?

The current EIS wage ceiling is RM6,000 per month. PERKESO increased the contribution ceiling from RM5,000 to RM6,000 effective from the October 2024 contribution period, and the RM6,000 ceiling continues to apply in 2026.

This means an employee who earns more than RM6,000 per month can still be covered by EIS, but the contribution is capped at the maximum amount shown in the RM6,000 contribution band.

Under the current schedule, wages exceeding RM6,000 result in an employer contribution of RM11.90 and an employee contribution of RM11.90, making the maximum standard monthly EIS contribution RM23.80.

How to Calculate EIS Contribution in Malaysia

To calculate EIS Contribution Malaysia correctly, employers first identify the employee's wages for the contribution month. The employer then finds the corresponding wage range in PERKESO current Act 800 contribution schedule.

The schedule contains multiple wage bands rather than requiring employers to calculate every contribution using a simple percentage. Each wage range provides the exact employer contribution, employee contribution, and combined amount.

For salaries above RM6,000, the contribution remains capped at the amount applicable to the RM6,000 wage ceiling. Employers can also use PERKESO official contribution calculator to check Act 800 contribution amounts.

EIS Calculation Example for RM3,000 Salary

Consider an eligible employee whose monthly EIS wages are more than RM2,900 but do not exceed RM3,000. Under the current Act 800 contribution schedule, the employer contributes RM5.90 and the employee contributes RM5.90.

The total EIS contribution for that payroll month is therefore RM11.80. This example also shows why employers should use the official contribution band rather than assuming a direct multiplication will always produce the required amount.

The employee's RM5.90 portion is deducted through payroll, while the employer adds another RM5.90 before the combined contribution is submitted to PERKESO.

EIS Calculation for Salary Above RM6,000

If an eligible employee earns more than RM6,000 per month, EIS does not continue increasing with the employee's full salary. The current contribution wage ceiling limits the calculation to the maximum contribution band.

Under the current schedule, the employer's maximum standard contribution is RM11.90 and the employee's contribution is also RM11.90. The combined monthly amount is therefore RM23.80.

This ceiling is particularly important when payroll teams process higher-paid employees because calculating 0.2% of the employee's full salary above RM6,000 could produce an incorrect contribution.

What Payments Are Included in EIS Wages?

Act 800 defines wages broadly as remuneration payable in money by an employer to an employee. This includes payments relating to normal work as well as certain other remuneration paid during employment.

The legal definition specifically includes payments for leave, holidays, overtime, and extra work performed on holidays. These amounts can therefore affect the monthly wage figure used to identify the applicable EIS contribution band.

Employers should review the employee's relevant earnings for each contribution month rather than automatically calculating EIS only on the figure described as basic salary.

What Payments Are Not Subject to EIS Contribution?

Act 800 also identifies payments that are excluded from its definition of wages. These exclusions are important because not every amount paid or provided in connection with employment forms part of the EIS contribution base.

The Act excludes employer payments to pension, social security, or provident funds, travelling allowances or travelling concessions, certain special employment expenses, gratuity payable on discharge or retirement, and annual bonuses.

Payroll teams should classify payments according to the EIS rules rather than assuming that a payment treated as wages for another statutory contribution must automatically receive the same treatment under Act 800.

Is Overtime Subject to EIS Contribution in Malaysia?

Yes. Overtime is included within the definition of wages under the Employment Insurance System Act 2017.

Act 800 specifically refers to remuneration for overtime and extra work on holidays as part of wages. This means overtime can move an employee into a different contribution band for a particular payroll month, up to the RM6,000 wage ceiling.

This treatment also shows why employers should calculate Malaysian statutory contributions separately. EPF, SOCSO, EIS, and income tax do not necessarily use identical rules for every payroll component.

Is an Annual Bonus Subject to EIS Contribution?

An annual bonus is excluded from the definition of wages under Act 800. It therefore does not normally form part of the wage amount used to calculate the standard EIS contribution.

This differs from ordinary wages, overtime, leave payments, and certain other employment remuneration that are included under the Act.

Employers should still classify the payment correctly. If a payment is described internally as a bonus but is actually another type of recurring remuneration or incentive, its treatment may need to be reviewed based on its true nature.

Who Must Pay EIS Contribution in Malaysia?

Current PERKESO guidance states that EIS coverage applies to eligible Malaysian citizens and permanent residents working in the private sector under a contract of service. The contract can be written or oral and may be expressed or implied.

Eligible employees are generally between 18 and 60 years old. An important exception applies to workers aged 57 or above who had never made EIS contributions before reaching age 57, PERKESO states that these workers are not required to begin contributing under Act 800.

Eligibility should therefore be checked when an employee joins the organization. Employers should not determine EIS contribution only from salary because citizenship or permanent resident status, age, sector, and employment relationship also matter.

Do Part-Time Employees Need to Contribute to EIS?

A part-time employee can be subject to EIS when the employee meets the normal Act 800 eligibility requirements, including working under a qualifying contract of service in the private sector.

Working fewer hours does not automatically remove an employee from PERKESO coverage. PERKESO also confirms generally that temporary and part-time workers are required to be registered where the applicable social security requirements are met.

For EIS specifically, payroll teams should still check citizenship or permanent resident status, age, and the employment arrangement before applying the contribution.

Do Employees Aged 60 and Above Contribute to EIS?

EIS contribution generally stops when an employee reaches the applicable minimum retirement age. Current PERKESO guidance describes EIS coverage as applying to employees aged 18 to 60, subject to the special rule for employees who first reach the system at age 57 or above.

Act 800 also states that contributions cease when an employee reaches the minimum retirement age.

This is different from SOCSO Act 4, where an employee can continue to receive employment injury coverage after age 60 under another contribution category. Payroll should therefore not use the SOCSO age rule as the EIS rule.

Do Foreign Workers Contribute to EIS in Malaysia?

Standard EIS coverage under Act 800 currently requires the employee to be a Malaysian citizen or permanent resident. A foreign employee who is not a Malaysian permanent resident therefore does not fall within the normal EIS eligibility described by PERKESO.

Foreign workers do have separate PERKESO protection under the Employees Social Security Act and related schemes. Their current PERKESO contributions should not, however, be confused with EIS contribution under Act 800.

Employers hiring foreign workers should therefore configure their payroll according to the correct PERKESO schemes instead of automatically applying the Malaysian employee EIS deduction.

What Happens If an Employee Has More Than One Employer?

An employee can have more than one qualifying employment at the same time. Under Act 800, if an employee has two or more employers, each employer is responsible for paying EIS contributions separately for the wages it pays.

One employer cannot rely on another employer's contribution as a reason to skip its own obligation.

This rule is especially relevant for employees with multiple jobs. Each employer should process the employee according to its own payroll and submit the contribution connected with wages from that employment.

When Is the EIS Contribution Payment Deadline?

Employers must generally pay monthly PERKESO and EIS contributions within 15 days of the following month. In practical terms, a contribution relating to January payroll should normally be paid no later than 15 February.

Employers should finalize wages and contribution information early enough to complete the payment within this period. Waiting until the deadline can increase the risk of late payment if payroll information or employee records need correction.

The monthly contribution process should therefore be included in the employer's normal payroll closing schedule alongside other Malaysian statutory payroll obligations.

What Happens If an Employer Pays EIS Late?

Late EIS contributions can result in Interest on Late Payment Contributions, commonly referred to as ILPC. PERKESO currently states that late contribution interest is charged at 6% per year for each day the payment remains late.

Where the calculated late-payment interest is below RM5, PERKESO states that the charge is RM5 per month. This means even a relatively small missed contribution can create an additional employer cost.

Act 800 also allows PERKESO to recover outstanding contribution amounts and applicable interest from employers. Employers should therefore reconcile EIS payments against payroll records every month.

How Do Employers Pay EIS Contributions?

Employers can manage EIS contributions through the PERKESO ASSIST Portal. The employer enters the contribution month and employee salary, and the system can calculate the applicable contribution amount.

PERKESO's current employer guidance provides a separate EIS contribution workflow through ASSIST and supports electronic payment through options such as FPX.

Employers should check employee wages and eligibility before submission. The amount calculated in the system should also agree with the employee's payroll deduction so the contribution payment and payslip remain consistent.

What Happens to EIS When an Employee Resigns?

When an employee leaves the organization, EIS contributions are still based on eligible wages paid for the final contribution month. Employers should complete final payroll correctly before closing the employee's active employment record.

PERKESO allows employers to update an employee's resignation date through the ASSIST Portal. Previous contribution history remains relevant and should not be deleted simply because the employee has left the business.

A resignation should also not automatically be confused with eligibility for EIS benefits. Whether a former employee can claim EIS depends on the type of loss of employment and the employee's contribution history.

What Does EIS Contribution Protect Employees Against?

EIS is mainly designed to provide income replacement and employment support after a qualifying loss of employment. An insured person must meet the applicable contribution conditions and other requirements before receiving benefits.

The system can provide Job Search Allowance, Reduced Income Allowance, Early Re-employment Allowance, training support, and re-employment assistance. PERKESO also connects eligible job seekers with employment services through MYFutureJobs.

Paying contributions does not mean every type of employment termination automatically qualifies for benefits. The reason the employment ended remains important.

What Is the EIS Job Search Allowance?

The Job Search Allowance, or JSA, provides temporary replacement income to an eligible insured person who has lost their sole source of employment.

PERKESO states that eligible recipients may receive the allowance for three to six months, depending on their Contributions Qualifying Conditions. Current PERKESO guidance provides payment rates based on assumed monthly wages, starting at 80% for the first month and reducing during later months.

The allowance is intended to provide temporary support while the insured person actively looks for another job rather than permanently replace employment income.

What Is the Early Re-Employment Allowance?

The Early Re-employment Allowance provides an incentive to an eligible Job Search Allowance recipient who returns to employment before using all of the JSA entitlement.

PERKESO currently states that the allowance is worth 25% of the remaining unpaid Job Search Allowance entitlement and is paid as a lump sum.

This benefit supports one of the broader objectives of EIS, which is not only to provide short-term income protection but also to help insured workers return to employment.

What Types of Job Loss May Qualify for EIS Benefits?

PERKESO identifies several types of loss of employment that can qualify for EIS benefits. These include normal retrenchment or redundancy, VSS or MSS arrangements, business closure or bankruptcy, constructive dismissal, and certain resignations connected with workplace threats, sexual harassment, or dangerous duties outside the employee's job scope.

An eligible worker generally needs to apply within 60 days from the date of loss of employment and satisfy the required contribution history.

The final determination is made according to the EIS rules and the circumstances surrounding the employee's loss of employment.

Does Voluntary Resignation Qualify for EIS Benefits?

A normal voluntary resignation generally does not qualify as a loss of employment for standard EIS benefits. PERKESO also excludes retirement, dismissal for misconduct, and expiry of a fixed-term contract from normal qualifying loss-of-employment categories.

However, not every resignation is treated the same way. PERKESO identifies certain situations such as resignation caused by sexual harassment, workplace threats, or being ordered to perform dangerous duties outside the job scope as possible qualifying losses of employment.

Employees should therefore avoid assuming that the word "resignation" alone determines eligibility. The circumstances and supporting evidence matter.

How Long Does an Employee Have to Apply for EIS Benefits?

An insured employee who experiences a qualifying loss of employment must generally apply for EIS benefits within 60 days from the date of the job loss.

The employee must also satisfy the Contributions Qualifying Conditions, which require a minimum contribution history within the relevant period.

Employees who wait too long after losing employment may therefore affect their ability to claim. Employers should provide accurate termination and payroll records so former employees have the documentation required for any valid claim.

What Is the Difference Between EIS and SOCSO in Malaysia?

EIS and SOCSO contributions are both administered by PERKESO, but they provide different types of protection. EIS under Act 800 focuses mainly on qualifying loss of employment and helping insured workers return to work.

SOCSO contributions under Act 4 primarily support social security protection connected with employment injury, invalidity, and related benefits. The contribution rates and eligibility rules are therefore different.

For payroll purposes, businesses should calculate SOCSO Contribution Malaysia and EIS as separate statutory items. Combining both into one calculation can lead to incorrect payroll deductions.

Common EIS Contribution Mistakes Employers Should Avoid

One common mistake is calculating EIS on an employee's entire salary even when wages exceed the current RM6,000 ceiling. EIS contributions stop increasing once the maximum Act 800 wage band is reached.

Another mistake is assuming every payment uses the same wage treatment. Act 800 includes overtime and leave-related remuneration in wages but specifically excludes payments such as annual bonuses and travelling allowances.

Employers should also check eligibility before applying EIS. Age, Malaysian citizenship or permanent resident status, private-sector employment, and previous EIS history can affect whether the employee is required to contribute.

EIS Contribution and Payroll Software in Malaysia

EIS is one of several statutory payroll requirements employers may need to process each month. Employee salary, overtime, employment status, age, contribution eligibility, SOCSO, EPF, tax deductions, and EIS can all affect final payroll.

Using payroll software in Malaysia can help businesses maintain employee information and apply recurring contribution rules more consistently. Payroll settings should still be reviewed whenever PERKESO changes the wage ceiling, contribution schedule, or eligibility requirements.

Businesses evaluating HR software in Malaysia should also consider how payroll connects with employee records, attendance, onboarding, compensation, and termination data. When employee information is maintained consistently, it becomes easier to calculate statutory contributions and update payroll when an employee joins or leaves the organization.

Frequently Asked Questions About EIS Contribution Malaysia

How Much Is EIS Contribution in Malaysia?

The standard EIS contribution is based on a total of 0.4% of assumed monthly wages. The employer pays an amount based on 0.2%, while the employee pays another amount based on 0.2%.

Actual contribution amounts should be taken from PERKESO's Act 800 wage schedule, subject to the current RM6,000 wage ceiling.

What Is the Maximum EIS Contribution in Malaysia?

At the current RM6,000 contribution ceiling, the maximum standard employer EIS contribution is RM11.90 per month and the employee contribution is also RM11.90.

The combined maximum standard contribution is therefore RM23.80 per month, even when the employee earns more than RM6,000.

Is EIS Mandatory in Malaysia?

EIS is mandatory for employees who meet the eligibility requirements under Act 800. Current PERKESO guidance covers eligible Malaysian citizens and permanent residents aged 18 to 60 who work in the private sector under a contract of service.

Employees aged 57 and above who had never contributed before reaching that age are subject to a specific exemption.

Is EIS Deducted From Employee Salary?

Yes. The employee portion of EIS is deducted through payroll. The standard employee share is based on 0.2% of assumed monthly wages according to the contribution schedule.

The employer separately pays its own contribution and sends both amounts to PERKESO.

Is EIS Calculated on Basic Salary or Gross Salary?

EIS is based on payments that fall within the definition of wages under Act 800 rather than simply using a payslip label such as "basic salary" or "gross salary."

The definition includes remuneration such as leave payments and overtime while excluding certain items including travelling allowances, gratuity on discharge or retirement, and annual bonuses.

Does Overtime Affect EIS Contribution?

Yes. Overtime is included in wages under Act 800 and can therefore affect the employee's contribution band for that month.

However, the final contribution remains subject to the current RM6,000 monthly wage ceiling.

Do Foreign Employees Pay EIS in Malaysia?

A foreign employee who is not a Malaysian permanent resident does not meet the current citizenship or permanent residence requirement stated by PERKESO for EIS coverage.

Foreign workers have other mandatory PERKESO protections, but those should not be confused with the Employment Insurance System under Act 800.

What Is the EIS Payment Deadline?

Employers should generally submit EIS contributions within 15 days after the end of the contribution month. For example, January's contribution should normally be paid no later than 15 February.

Late payment can result in Interest on Late Payment Contributions.

Can I Claim EIS If I Resign?

A normal voluntary resignation generally does not qualify for EIS benefits.

Certain exceptional resignation circumstances recognized by PERKESO, such as resignation because of sexual harassment, workplace threats, or being ordered to perform dangerous duties outside the employee's job scope, may be treated differently.

How Soon Must I Apply for EIS After Losing My Job?

An eligible insured employee should apply within 60 days from the date of loss of employment.

The employee must also meet the required Contributions Qualifying Conditions and have experienced a type of job loss recognized under the EIS rules.

Final Thoughts on EIS Contribution in Malaysia

Understanding EIS Contribution Malaysia helps employers process payroll correctly and ensures eligible employees maintain their Employment Insurance System contribution records. Employers need to identify eligible workers, use the correct wage amount, apply the current Act 800 contribution schedule, and submit contributions on time.

The standard contribution is shared between employer and employee, with each side contributing an amount based on 0.2% of assumed wages. The current contribution ceiling is RM6,000 per month, which limits the standard contribution to RM11.90 from the employer and RM11.90 from the employee at the highest wage band.

Employers should review PERKESO guidance whenever contribution rates, wage ceilings, or employee eligibility rules change. Accurate employee and payroll records make it easier to maintain EIS compliance from one payroll period to the next.

This guide provides general payroll information and does not replace legal, employment, or professional advice. Employers and employees should refer to the latest PERKESO guidance for circumstances specific to them.