EPF. PCB. SOCSO. Malaysian payroll, owned.
Malaysian payroll demands monthly PCB/MTD withholding tax remittance via e-CP39, EPF 11% employee and 12–13% employer contributions via i-Akaun portal, SOCSO 1.75% employer and EIS 0.2% each capped at RM4,000/month, progressive income tax up to 30%, year-end EA form issuance by 28 February, annual E-form return by 31 March, HRD Corp 1% levy for qualifying employers, and strict LHDN employer liability for PCB shortfalls. Most providers handle withholding. Mercans handles all four agencies — on a single proprietary stack with no intermediaries.
native payroll
vs nearest peer
since inception
- PCB/MTD top rate
- 30% above MYR 2M/yr
- EPF Employer
- 13% (<= MYR 5,000) / 12%
- EPF Employee
- 11% of gross salary
- SOCSO ER
- 1.75% (cap MYR 4,000/mo)
- EIS ER
- 0.2% (cap MYR 4,000/mo)
- HR Levy
- MYR 10/month per employee
- PCB Deadline
- 15th of following month
- Expatriate: No EPF
- Exempt (optional at RM5/mo)
- Annual Leave
- 8–16 days min (by service)
- Minimum Wage (2024)
- MYR 1,700/month
Getting Malaysia payroll “mostly right” is the most expensive mistake
PCB Under-Deduction — Employer Strict Liability
LHDN holds employers strictly liable for monthly PCB shortfalls. If an employer fails to deduct the correct amount of PCB from an employee’s salary, LHDN assesses the deficient tax directly against the employer under Section 107C of the Income Tax Act 1967, with a mandatory 10% penalty on the under-deducted amount.
EPF Rate Misapplication — Age Band & Salary Threshold
EPF contribution rates vary by age band and salary level: the employer rate drops from 13% to 12% when an employee’s wages exceed RM5,000/month, and both rates change at age 56 (5.5% EE / 6% ER) and again at 60 (0% EE / 4% ER).
Non-Resident Employee Tax — Flat 30% vs Progressive
Non-resident employees (those present in Malaysia for fewer than 182 days in a calendar year) are taxed at a flat 30% on all Malaysia-source employment income, with no personal reliefs and no PCB table — a significantly different calculation path from resident employees. Employers who apply resident PCB tables to non-residents substantially under-withhol.
Foreign Worker Payroll — EPF, SOCSO & EIS Compliance
Non-citizen employees (Employment Pass, Professional Visit Pass) are exempt from SOCSO and EIS, but employers must still make a minimum EPF contribution of RM5/month per non-citizen employee regardless of salary. Employers who inadvertently deduct SOCSO or EIS for foreign workers over-charge employees and create reconciliation issues with PERKESO ASSIST.
The three types of providers who struggle with Malaysia
Route through local Malaysian partners. PCB e-CP39 remittance handled by local bureau. EPF contributions typically calculated correctly for citizen employees; non-citizen age-band edge cases require customer verification. SOCSO/EIS capping and EA form generation via partner systems. HRD Corp levy often excluded from scope.
- ×Partner e-CP39
- ×EPF via bureau
- ×EA form manual
Payroll Panda, Kakitangan, TimeTec: solid EPF and PCB integration for domestic Malaysian payroll. LHDN e-Filing integration for E-form. Limited multi-currency expatriate handling. Non-resident 30% flat rate and REP 15% typically require manual setup. SOCSO/EIS rate tables embedded but updated manually.
- ×PCB integrated
- ×EPF age-band logic
- ×Limited expat handling
Fully managed payroll with native e-CP39 filing, EPF age-band engine (11%/12–13% by salary & age), SOCSO/EIS cap management, non-resident 30% flat rate, REP 15% tracking, EA form generation, E-form submission, HRD Corp levy calculation, and Employment Pass payroll for non-citizens — all in-platform.
- ×Native e-CP39
- ×EPF age-band engine
- ×EA form auto
The only provider that closes every gap
From monthly e-CP39 PCB remittance to EPF age-band engine, SOCSO/EIS cap management, non-resident 30% flat rate, EA form issuance, E-form filing, HRD Corp levy, and Employment Pass payroll — Mercans owns every layer of Malaysian payroll on a single contract.
G2N Nova™ — Native LHDN & EPF Engine
Mercans’ proprietary G2N Nova™ engine submits monthly PCB via e-CP39, calculates EPF at the correct rate band (13% ER on wages ≤RM5,000 / 12% ER on wages >RM5,000), applies SOCSO 1.75% and EIS 0.2% with RM4,000 cap, manages HRD Corp 1% levy, and generates EA forms and the E-form return — all on every pay run. Non-resident flat 30% and REP 15% applied per employee residency status.
Malaysia-based payroll specialists
Mercans operates a Malaysia-resident payroll team with expertise in LHDN e-Filing, EPF i-Akaun employer administration, SOCSO ASSIST portal, EIS claims handling, HRD Corp grant submission, Employment Pass cessation reporting (CP22A), and expatriate PCB residency structuring. Named account managers with direct LHDN e-filing credentials.
PDPA & Data Protection compliance
Malaysian payroll data is governed by the Personal Data Protection Act 2010 (PDPA), enforced by the Personal Data Protection Commissioner. Employee NRIC numbers, EPF membership numbers, and income tax file numbers are sensitive personal data requiring strict processing controls. Mercans holds BCR approval, ISO 27701, SOC 1 & 2, and ISO 27017/27018. Data processing agreements aligned with PDPA principles for international data transfers included as standard.
Where Mercans wins on every Malaysia-specific capability
Each row is a Malaysian payroll capability. Each cell shows native coverage as a fill bar — full = native in-platform, half = partial / manual workaround, empty = gap.
Malaysia Capability Coverage · 10 dimensions
LHDN e-PCB tables · personal relief · 15th deadline
13%/12% salary threshold · 56/60 age bands · non-citizen RM5
0.5%+1.75% SOCSO · 0.2%+0.2% EIS · non-citizen exemption
EA by 28 Feb · E-form by 31 Mar · LHDN e-Filing
182-day residency test · mid-year transition · REP 15%
e-TRiS submission · qualifying employer assessment · grant reclaim
Non-citizen EPF RM5 · SOCSO/EIS exemption · tax clearance
Monthly EPF rate threshold check · bonus annualisation · TP1 relief
EPF portal · SOCSO portal · monthly file submission
NRIC · EPF member no. · income tax file · PDPA 2010
Every rate. Every cap. Every obligation.
Malaysia’s 2025–26 payroll framework combines EPF 11% EE + 12–13% ER contributions, SOCSO 1.75% ER + EIS 0.2% each (capped RM4,000), progressive income tax 0–30% via monthly PCB, non-resident flat 30%, HRD Corp 1% levy, year-end EA form and E-form returns, and LHDN strict employer liability for under-deduction. Mercans tracks every LHDN, EPF, PERKESO, and HRD Corp update without manual reconfiguration.
Malaysia · Rate & Compliance Dashboard
Live 2025–26PCB Progressive Rates — Chargeable Income After Relief
Malaysian income tax is levied on chargeable income (gross income less personal reliefs). The personal relief is RM9,000/year for a single individual. Progressive rates: 0% (RM0–5,000), 1% (up to RM20,000), 3% (RM35,000), 8% (RM50,000), 13% (RM70,000), 21% (RM100,000), 24% (RM250,000), 24.5% (RM400,000), 25% (RM600,000), 26% (RM1M), 28% (RM2M), 30% above RM2,000,000.
→ PCB: annualised gross − RM9k personal relief → progressive 0–30% · monthly deduction = annual tax ÷ 12EPF Age-Band Rates — Three-Tier Structure
EPF rates change at two age thresholds. Age ≤55: EE 11%, ER 13% (wages ≤RM5,000) or 12% (wages >RM5,000). Age 56–60: EE 5.5%, ER 6%. Age >60: EE 0% (voluntary), ER 4%. Payroll systems must track employee age precisely and update rates at the correct birthday month.
→ EPF: 11% EE + 13/12% ER (≤55) · 5.5%/6% (56–60) · 0%/4% (>60) · RM5k salary threshold per monthSOCSO & EIS — RM4,000 Cap & Foreign Worker Exemption
Both SOCSO and EIS contributions are computed on insured wages capped at RM4,000/month. SOCSO at RM4,000+: EE RM20.00 + ER RM70.00 (Employment Injury + Invalidity Scheme). EIS: maximum RM8 EE + RM8 ER. Non-citizen employees (including Employment Pass holders) are entirely exempt from SOCSO and EIS. Domestic servants and civil servants are also exempt.
→ SOCSO/EIS cap RM4,000/mo · max EE RM20 + RM8 · non-citizens fully exempt · age ≥60: EI only 1.25% ERLHDN Audit — Employer PCB Liability Framework
LHDN’s e-Audit programme cross-validates monthly e-CP39 remittances against the annual E-form and individual employees’ tax returns. A discrepancy triggers a Notice of Assessment against the employer. Under Section 107C(9) ITA 1967, employers who fail to deduct PCB face a 10% penalty on the deficient amount, non-recoverable from the employee after departure.
→ LHDN e-Audit: e-CP39 vs E-form cross-match · 10% penalty on PCB shortfall · employer non-recoverable post-departureSee your real Malaysia payroll cost in real time
EPF employer and employee contributions plus PCB income tax withholding — calculated live as you move the slider.
Malaysia Payroll Cost Calculator
LIVEWhat only Malaysia experts know to handle
These are the compliance details that don’t appear in standard payroll setup guides — but appear in every audit and labour inspection we’ve encountered in Malaysia over 20 years.
PCB/MTD & LHDN e-Filing
Monthly PCB calculated via LHDN e-PCB tables using personal relief of RM9,000 for a single individual, progressive rates 0–30%. e-CP39 submitted to LHDN by the 15th of the following month. EA form issued to all employees by 28 February. Annual E-form filed electronically by 31 March. CP22A submitted within 30 days of employee departure.
EPF — Age-Band & Rate Engine
EPF contribution rates vary by age band and salary: age ≤55 — 11% EE, 13% ER (wages ≤RM5,000) or 12% ER (wages >RM5,000); age 56–60 — 5.5% EE / 6% ER; age >60 — 0% EE / 4% ER. Non-citizen employees: mandatory RM5/month employer minimum. Monthly submission via i-Akaun employer portal.
SOCSO & EIS — PERKESO ASSIST
SOCSO contributions: 0.5% EE + 1.75% ER on insured wages capped at RM4,000/month. EIS: 0.2% EE + 0.2% ER on the same cap (max RM8 per side). Applicable only to Malaysian citizens and PRs under age 60. Foreign worker exemption correctly applied. Monthly PERKESO ASSIST portal submission. Age-60 scheme switch handled automatically.
Non-Resident & Expatriate Tax
Non-resident employees present fewer than 182 days are taxed at a flat 30% on all Malaysia-source compensation — no personal reliefs, no PCB table. Mid-year residency transitions tracked with blended year-end computation. REP/RQM-approved employees taxed at flat 15%. CP22 and CP22A managed for all expatriate hires and departures.
One workforce. Two entirely different compliance tracks.
Malaysian payroll divides into two primary tracks: Malaysian citizens and permanent residents subject to full PCB/MTD, EPF, SOCSO, and EIS obligations; and non-citizen employees (Employment Pass holders) on a separate compliance path with no SOCSO/EIS, minimum EPF, flat 30% PCB, and mandatory cessation reporting — each with distinct LHDN, EPF, and PERKESO obligations.
Parallel Compliance Engines
(Resident Employees)
PCB progressive 0–30% monthly deduction via LHDN e-PCB tables. Personal relief RM9,000 applied. Employee may submit Form TP1 for additional relief claims (EPF deduction, life insurance, etc.). EA form issued by 28 February. E-form filed by 31 March.
EPF: 11% EE + 13/12% ER age-band logic for 56–60 (5.5%/6%) and 60+ (0%/4%). RM5,000 monthly wage threshold determines employer 13%/12% split per month. i-Akaun employer portal submission monthly.
SOCSO: 0.5% EE + 1.75% ER (capped RM4,000) Employment Injury + Invalidity Pension Scheme. Switches to Employment Injury only (1.25% ER, 0% EE) at age 60. PERKESO ASSIST monthly submission.
EIS: 0.2% EE + 0.2% ER (capped RM4,000) employment insurance enabling retrenchment benefits and job placement. Maximum RM8 each per month. EIS benefit claim coordination managed. Not applicable age 60+.
HRD Corp 1% ER levy for qualifying employers with 10+ Malaysian employees. Monthly e-TRiS submission. Annual training grant reclaim coordinated. Employers under threshold: exempt, no registration required.
(Expatriate Employees)
PCB flat 30% non-resident employees present fewer than 182 days are taxed at 30% flat with no personal reliefs, no PCB table. If employee becomes resident mid-year (cumulative days cross 182), LHDN allows election for resident treatment for the full year. REP / RQM approval: 15% flat rate.
EPF: mandatory RM5/month ER minimum employer must remit at least RM5/month per non-citizen employee to EPF regardless of salary. Employee may voluntarily contribute at 11% or any amount. Failure to make any EPF contribution is a criminal offence.
SOCSO and EIS: fully exempt non-citizen employees (Employment Pass, PVP, MM2H) are not covered by SOCSO or EIS. No deduction, no employer contribution. Employer must not deduct SOCSO/EIS from non-citizen salaries.
CP22A cessation filing within 30 days employer must submit CP22A (notification of cessation) to LHDN within 30 days of EP expiry or employee departure. LHDN issues a tax clearance letter. Employer must withhold final salary until clearance is obtained for non-residents with potential tax arrears.
Non-citizen EPF withdrawal non-citizen employees leaving Malaysia permanently may withdraw their EPF balance in full. Employer must manage the EPF i-Akaun termination notification. EPF Form KWSP 17A (non-citizen withdrawal) processed at departure.
Malaysia payroll compliance calendar
Key LHDN, EPF, SOCSO/EIS, HRD Corp, and labour deadlines for 2025–26.
each month
PCB / e-CP39 Monthly Remittance
Monthly PCB (Potongan Cukai Bulanan) deducted from employee salaries must be remitted to LHDN via e-CP39 online system by the 15th of the following month. Late remittance attracts a 10% penalty on the remitted amount plus prosecution under Section 107C ITA 1967.
2026
EA Form (CP8A) Issuance Deadline
Employers must issue EA forms (Statement of Remuneration from Employment) to all employees by 28 February 2026 covering the 2025 tax year. The EA form shows year-to-date gross remuneration, PCB deducted, EPF contributions, and other deductible amounts.
2026
E-Form (Employer Return) Filing Deadline
Annual E-form (Return by Employer) must be submitted electronically to LHDN by 31 March 2026 reporting aggregate remuneration and PCB deducted across all employees for 2025. E-form data must reconcile exactly with cumulative e-CP39 monthly remittances. LHDN e-Audit cross-matches E-form against employee tax returns.
2026
Individual Income Tax Return — Form BE
Employees file their personal income tax return (Form BE for employment income) by 30 April 2026 for the 2025 tax year. e-Filing via MyTax portal is available from 1 March.
Malaysia is one market.
Mercans covers all of Southeast Asia on one platform.
From Malaysia to Singapore, Thailand, Indonesia, the Philippines, and Vietnam — Mercans delivers native payroll across every major Southeast Asian jurisdiction on a single contract, with consolidated multi-country reporting and a single point of contact.
covered
1 contract
consolidation
Southeast Asia
Every filing. Every format. Submission-ready.
Mercans generates the exact file types that LHDN, EPF, SOCSO, EIS, HRDC expect to receive.
