Malaysia Payroll — PCB, EPF, SOCSO & EIS Monthly Cycle

Confirm the employer is registered with LHDN, KWSP, and PERKESO, and classify each employee by nationality, age, and employment type. Foreign employees (non-PR) attract different EPF rates (2%/2%) from October 2025, and employees aged 60+ have reduced EPF rates and SOCSO-Employment-Injury-only coverage. Getting classification right before any calculation prevents costly rework.

Compile each employee's total monthly remuneration — salary, commissions, allowances, bonuses, and benefits-in-kind — to arrive at the gross figure used for EPF, SOCSO/EIS, and PCB calculations. Identify any one-off bonus payments this month, which affect PCB through the bonus-smoothing or annualisation method under the LHDN PCB Schedule.

Calculate each employee's monthly PCB deduction using LHDN's e-PCB online calculator or the approved PCB Schedule, incorporating employee-declared reliefs from Form TP1 (spouse, children, EPF, life insurance). The computed PCB amount must be withheld from the employee's net pay and prepared for remittance via Form CP39 by the 15th of the following month.

Calculate EPF contributions for each employee using the applicable rate tier: 11% employee / 13% employer for Malaysian citizens and PRs earning ≤RM5,000; 11% / 12% for those earning > RM5,000; and 2% / 2% for non-PR foreign employees (from October 2025). Amounts are per the KWSP Third Schedule (stepped table). Total employer and employee amounts must be reconciled before online submission via the KWSP i-Akaun Majikan (employer) portal.

Calculate SOCSO and EIS contributions using the PERKESO Third Schedule contribution table, capped at the RM6,000/month wage ceiling (effective October 2024). Employees under 60 contribute to both the Employment Injury Scheme and Invalidity Scheme (combined 1.75% employer + 0.5% employee); employees aged 60+ or first-time contributors aged 55–59 pay only the Employment Injury Scheme (1.25% employer, 0% employee). EIS applies at 0.2% each side, capped at RM12/employee/month. Foreign employees and government servants are excluded from EIS.

Submit and pay PCB via Form CP39 through the LHDN MyTax / e-PCB portal, and remit EPF and SOCSO/EIS via their respective portals, all by the 15th of the following month. Issue payslips to employees showing gross pay, each statutory deduction (PCB, EPF, SOCSO, EIS), and net pay. Post the payroll journal entries to the general ledger, recording the employer's statutory cost obligations (employer EPF, SOCSO, EIS) as payroll expense. At year-end (by end of February), issue Form EA to each employee.