Country pack: Malaysia

Run HR and payroll for a legal entity in Malaysia. The pack covers EPF, SOCSO and EIS contributions, the monthly tax deduction (PCB) and the HRD Corp levy. It also covers statutory reports, the IBG bank salary file, termination benefits, and leave, holidays and working time under the Employment Act 1955.

Contents: Who can use it · What the pack contains · Install · Employee fields · EPF, SOCSO and EIS · Monthly tax deduction · End of service · Bank file · Reports and deadlines · Status of the figures · Example · FAQ

Who can use it

Admins and HR staff who can install country packs on a legal entity can use it. Payroll content also needs payroll on your plan.

What the pack contains

Area	Malaysia: private sector
EPF	Below 60: 11% employee, 13% employer (12% above 5,000). From 60: Malaysians 0% / 4%, permanent residents 5.5% / 6.5% (6% above 5,000). Foreign workers 2% / 2%
SOCSO	Below 60: 0.5% employee, 1.75% employer; from 60 and for foreign workers 1.25% employer only; wages up to 6,000
EIS	0.2% employee and 0.2% employer for Malaysians and permanent residents below 60; wages up to 6,000
Income tax	Monthly tax deduction (PCB) with the 2026 resident rates, reliefs, the rebate and the 4,000 EPF relief cap; non-residents 30%
HRD Corp levy	1% of basic and allowances for Malaysian employees
End of service	Termination benefit: 10 days' wages a year under two years of service, 15 up to five years, 20 after
Leave	Annual 8, 12 or 16 days and sick 14, 18 or 22 days by service; hospitalisation 60 days; maternity 98 days; paternity 7 days
Holidays	Labour Day, National Day, Malaysia Day, Christmas, Hari Raya Aidilfitri (2 days), Hari Raya Haji, Awal Muharram, Maulidur Rasul (other federal and state holidays added each year)
Working time	8 hours a day and 45 a week; overtime 1.5 times, 2 times on a rest day and 3 times on a public holiday; at most 104 overtime hours a month
Notice	As in the contract; when the contract is silent, 4, 6 or 8 weeks depending on service
Letters	Service certificate and salary certificate in English and Malay
Bank file	IBG bulk salary file
Reports	EPF contributions (Form A), SOCSO and EIS, monthly tax deductions (CP39), HRD Corp levy, Form EA and Form E data

Install the pack

1. Go to Settings → Legal entities and open the legal entity. Its country must be Malaysia.
2. Click Install country pack and choose Malaysia: private sector (draft).
3. Read the preview, tick the notice that the pack is not yet verified and click Install.

Letters arrive as drafts in English and Malay: read them and publish them in Documents and letters. The Hijri holidays follow the official moon sighting; adjust the date when it is announced.

Employee fields

The pack adds an EPF, SOCSO and income tax (Malaysia) section to employee profiles in Malaysia:

• Contribution category: Malaysian, Permanent resident or Foreign worker. Empty means Malaysian. HR picks it; it decides the EPF, SOCSO and EIS rates and the levy.
• EPF member number.
• Spouse relief: Yes adds 4,000 of relief and the spouse rebate.
• Children for tax relief (under 18): each child adds 2,000 of relief.
• Disabled individual (tax relief): Yes adds 7,000 of relief.
• Non-resident for tax: Yes deducts 30% of the pay each month.

Put the MyKad number under National ID (12 digits) and the income tax number under Tax ID. The date of birth decides the age bands: a new rate starts the month after the 60th birthday.

EPF, SOCSO and EIS

• EPF is charged on wages without overtime and leave paid out, bonuses included. It follows the official table: steps of 20 up to 5,000 and of 100 up to 20,000, each share rounded up to the next ringgit.
• SOCSO and EIS are charged on wages without bonuses, up to 6,000. The official table charges the middle of each 100 step, each share rounded up to 5 sen.

Monthly tax deduction (PCB)

Every month the payroll estimates the year's chargeable income: what was paid so far, plus this month's normal pay for every month left. It then takes off EPF (at most 4,000 a year) and the reliefs (individual 9,000 plus the fields above, plus the reliefs the employee declared and proved in Tax declarations). The tax on the yearly rates is reduced by the 400 rebate (800 with the spouse) when chargeable income is 35,000 or less. It is spread over the months left, after what was already deducted. A bonus is taxed in the month it is paid. The deduction is rounded up to 5 sen, and amounts under 10 are not deducted.

End of service

When an offboarding settlement is worked out for a termination by the employer after at least 12 months, the pack adds the Termination benefit. It is 10 days' wages for each year of service under two years, 15 days from two to five years and 20 days after, with a part year counted by months. The daily rate is the monthly wage divided by 26. It is not paid on resignation or at the end of a fixed term. Unused annual leave is paid out, and final wages are due within 7 days.

IBG bank salary file

In a locked payroll run, open the Bank file tab and choose IBG / bulk salary file (CSV). The file has one line per payee: name, account number, the bank's BIC, ID number, amount, reference, payment details and employee ID. If anyone has no account number or BIC, the file is not made and those people are listed. The file is for ringgit only. To match your bank's template, set the column headings under Pack settings.

Reports and deadlines

In Compliance → Reports, choose the legal entity:

• EPF contributions (Form A data), SOCSO and EIS contributions and HRD Corp levy: monthly.
• Monthly tax deductions (CP39 data): income tax number, MyKad, pay and PCB.
• Remuneration of the year (Form EA and Form E data): run it for January to December.

Compliance → Calendar shows the wage payment (within 7 days), the payments to EPF, PERKESO, LHDN and HRD Corp (15th of the next month), Form EA to employees (end of February) and Form E (31 March).

Status of the figures

The pack is draft. It was written from the EPF Act, the Social Security and Employment Insurance Acts, LHDN's monthly tax deduction method, the HRD Corp Act and the Employment Act 1955 as amended in 2022. Every item gives its source and a list of points the reviewer must confirm. The pack becomes verified only after a Malaysian employment lawyer and a payroll practitioner sign. Until then, every screen that uses the pack says its figures are not verified. Your company stays responsible for its payments and filings.

Example scenario

MY Trading Sdn Bhd installs the Malaysia pack. Nur Aisyah, single, earns 5,000 a month. Her January payslip shows the following:

• EPF 550, with 650 from the employer
• SOCSO 24.75, with 86.65 from the employer
• EIS 9.90, with the same from the employer
• PCB 110

The HRD Corp levy is 50. HR makes the IBG file from the locked run and uploads it to the bank.

Troubleshooting and FAQ

A foreign worker has no EIS. That is right: foreign workers are not covered by EIS and pay SOCSO for employment injury only.

No PCB is deducted for someone earning 3,000. That is right: after reliefs and the rebate the year's tax is nil.

The company is not liable for the HRD Corp levy. Remove or change the levy line in the payroll components.

The IBG file is refused. The message lists who has no account number or BIC. Fix the bank account on the profile and make the file again.