# Malaysian Payroll Compliance: The Employer's Calendar of Duties

> Every statutory payroll duty a Malaysian employer owes, arranged by when it falls due rather than by which agency collects it.

- Category: employment
- Language: en
- Status: published
- Updated: 2026-08-14
- Canonical: https://negaraku.md/en/employment/payroll-compliance-malaysia

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The reason Malaysian payroll goes wrong is almost never arithmetic. It is that
five different agencies each believe they are the only one you answer to, and
none of them will tell you what the other four want.

An employer running payroll in Malaysia is simultaneously a collecting agent for
the Employees Provident Fund, the Social Security Organisation twice over
(injury and unemployment are separate statutes), the Inland Revenue Board, and
— once Malaysian headcount reaches ten — the Human Resources Development
Corporation. Each has its own Act, its own portal, its own rate architecture and
its own offence provisions. What they share is a date.

So this page is organised the way the duties actually arrive: monthly, annually,
and on the day something happens to an employee. Rate tables live in the
scheme-specific guides linked from each section.

## What is due every month, and by when?

All five monthly streams fall due on or before the **15th day of the month
following the wage month**. Wages paid for March are remitted by 15 April.

| Stream | Statute | Portal | Who bears it |
| --- | --- | --- | --- |
| EPF | EPF Act 1991, s.43(1) | i-Akaun (Employer) / e-Payroll | Employer and employee |
| SOCSO | Employees Social Security Act 1969 (Act 4) | ASSIST | Mostly employer |
| EIS | Employment Insurance System Act 2017 (Act 800) | ASSIST | Split evenly |
| PCB / MTD | Income Tax Act 1967 | e-PCB, e-Data PCB or e-CP39 | Employee, withheld by employer |
| HRD Corp levy | PSMB Act 2001 (Act 612) | HRD Corp portal | Employer alone |

The shared date is a scheduling convenience, nothing more. There is no
consolidated return, no single payment, and no cross-agency mitigation. An
employer who remits EPF, SOCSO, EIS and PCB punctually and forgets the HRD Corp
levy is in default under the PSMB Act on exactly the same terms as one who
forgot everything.

The late-payment penalties are scheme-specific too. EPF imposes a late-payment
charge at the prevailing dividend rate plus 1 per cent (minimum RM10) on top of a
dividend component (minimum RM1). SOCSO and EIS both charge interest on late
payment at 6 per cent per annum for each day the contribution is unpaid past the
15th. The HRD Corp levy runs at 10 per cent yearly per day of default. There is
no common penalty and no common calculation.

### The EPF trap that costs employers money every month

Under s.43(1) of the EPF Act 1991, employer and employee are liable to
contribute at the rates set out in the **Third Schedule**. That schedule is not
a set of percentages. For wages up to RM20,000 a month it is a table of fixed
ringgit amounts arranged in bands — RM20-wide bands up to RM5,000, RM100-wide
bands from there to RM20,000.

The EPF's own instruction is unambiguous: employers are not allowed to calculate
the employer and employee share based on exact percentage **except** for
salaries exceeding RM20,000.

The reason this matters is that the table amounts are struck on the top of each
band, not on the actual wage, so percentage arithmetic almost always comes out
low. The EPF publishes the worked example itself: on wages of RM3,250 the
correct Part A figures are RM424 employer and RM359 employee, a total of RM783.
Percentage arithmetic at 13 and 11 per cent yields RM423 and RM358 — RM781. Two
ringgit short, every month, per employee, and a contravention rather than a
rounding preference.

The gap widens with salary. On RM6,710.80 the schedule gives RM816 and RM748 for
a total of RM1,564; percentages give RM1,543.49. Full detail, including the
13 per cent to 12 per cent step at RM5,000 and the separate Parts for employees
aged 60 and over, is in the [EPF employer guide](/en/employment/epf-employer-guide).

### SOCSO and EIS: check your ceiling before you check your rate

The insured-wage ceiling for both schemes rose from RM5,000 to **RM6,000 with
effect from 1 October 2024**. This is the single most commonly stale figure in
Malaysian payroll content — pages still circulate showing RM5,000, and some
still show the long-superseded RM4,000. If your payroll system caps contributions
at RM5,000, every employee earning more than that is being under-contributed.

SOCSO under Act 4 splits into two categories by age: the First Category, for
employees below 60, funds both the Employment Injury and Invalidity Schemes at
1.75 per cent employer and 0.5 per cent employee; the Second Category, for
employees aged 60 and above, funds Employment Injury only at 1.25 per cent
payable by the employer. EIS under Act 800 is a flat 0.2 per cent from each side
on assumed wages capped at RM6,000. Because the Act 800 Second Schedule bands the
assumed wage, the top row ("wages exceed RM6,000") fixes the maximum monthly EIS
contribution at **RM11.90 employer and RM11.90 employee — RM23.80 in total**,
not the RM12.00 a flat 0.2 per cent of RM6,000 would suggest.

A third element now sits inside the same PERKESO contribution table and is
responsible for a great deal of confusion: the **LINDUNG 24 Jam** non-employment
accident scheme (SKBBK). It is borne entirely by the employee, and PERKESO
states that it is no longer compulsory for local employees — they participate
voluntarily, with an opt-out — while remaining mandatory for foreign workers.
That is why three different maximum monthly contribution figures are circulating
for the same wage. See the [SOCSO and EIS employer guide](/en/employment/socso-eis-employer-guide).

### PCB and the levy

PCB is not a contribution; it is the employee's own income tax, withheld. The
employer determines the amount using either the Computerized Payroll Calculation
Method or the schedule accessible through e-CP39, submits the statement through
e-PCB, e-Data PCB or e-CP39, and remits by the 15th. The consequence of failure
is unusually direct: the unremitted amount becomes a debt due to the Government
**from the employer**.

The HRD Corp levy is 1 per cent of monthly wages plus fixed allowances for
employers with ten or more Malaysian employees, and 0.5 per cent for those with
five to nine who elect to register. Late payment attracts interest at 10 per cent
yearly in respect of each day of default.

## What is due once a year?

Two dates, three forms, and one relationship that employers routinely invert.

**Last day of February** — give every employee their Form EA (Form EC for public
sector), the statement of remuneration for the preceding calendar year. This
goes to the employee, not to LHDN. It is the document they need in order to file
their own return, which is why it comes first.

**31 March** — file **Form E together with CP8D**. LHDN treats Form E as
complete only when CP8D has been submitted within the specified period.
Companies and Labuan companies must file Form E through e-Filing. The same date
applies to Form CP58 for cash and non-cash incentive payments made to agents,
dealers or distributors.

Running alongside both: keep records for **seven years** and keep them readily
accessible to LHDN on request.

The inversion worth naming: employers frequently treat Form E as the parent
filing and the EA forms as an afterthought produced later in March. The
statutory order is the opposite. The EA deadline falls first because the
employee's filing season depends on it.

## What is triggered by an event?

These are the duties with no fixed calendar date, and they are where the
personal exposure sits.

| Event | Duty | Deadline |
| --- | --- | --- |
| Hiring an employee subject to tax | Form CP22 | Within 30 days after commencement |
| Cessation of employment | Form CP22A (CP22B public sector) | Not less than 30 days before cessation |
| Death of an employee | Form CP22A / CP22B | Not more than 30 days after being informed |
| Employee leaving Malaysia over 3 months | Form CP21 | Not less than 30 days before departure |
| Reaching 10 Malaysian employees | HRD Corp registration | On becoming liable under the Act |

CP22 has been mandatory through the e-CP22 application on MyTax since
1 September 2024; manual submission is no longer permitted. CP21 and
CP22A/CP22B have been mandatory through e-SPC on MyTax since 1 January 2024.

Note the direction of the cessation deadline. CP22A is due **before** the event,
not after — at least 30 days before the employee stops working. An employer who
learns of a resignation on the last day of the notice period is already late.
There is a carve-out: the form is not required where the employee's income is
subject to MTD, or where monthly remuneration falls below the minimum eligible
for MTD.

### The withholding duty most SMEs discover too late

Where an employee ceases employment, dies, or leaves Malaysia for more than
three months without intending to return, the employer must **withhold any money
payable to that employee** and must not release it without LHDN's permission
until 90 days after LHDN receives the CP21 or CP22A, or until a tax clearance
letter is issued.

This is the provision that converts an administrative slip into a personal cost.
Pay out the final salary and unused-leave encashment on the last working day, as
commercial instinct suggests, and the employer has both failed the withholding
duty and lost the fund from which the employee's tax would have been settled.
Employers are responsible for paying the full amount of tax payable by the
employee, and that amount is recoverable from the employer as a debt due to the
Government.

Failure to comply with the s.83 notification duties, without reasonable excuse,
carries on conviction a fine of not less than RM200 and not more than RM20,000,
or imprisonment not exceeding six months, or both.

### The headcount trigger

HRD Corp coverage is misunderstood as sectoral. It was, until the expansion of
the PSMB Act 2001 took effect on **1 March 2021**, which extended the First
Schedule across essentially every industry — agriculture, construction, trading,
professional services, education, medical facilities, sport, personal services
and some forty others.

What determines liability now is Malaysian headcount:

- **Ten or more Malaysian employees** — registration is mandatory under s.13(1),
  levy at 1 per cent of monthly wages plus fixed allowances.
- **Five to nine Malaysian employees** — registration is optional; if you
  register, the levy is 0.5 per cent.
- **Federal Government, State Government, local councils and statutory bodies**
  are not covered.

Failing to register when required is an offence under s.13(2) carrying a fine
not exceeding RM10,000 or imprisonment not exceeding one year, or both. The
trigger is crossing the threshold, not a date, which is why a growing company
should recount at every hire rather than annually.

## What changed recently that your payroll system may not know?

Three live changes, each of which invalidates rate tables published before it.

**Non-citizen EPF, from the October 2025 wage month.** Employers must register
and contribute for non-Malaysian citizen employees holding a valid passport and
work pass, at 2 per cent employer and 2 per cent employee under the new Part F
of the Third Schedule. Domestic servants are excluded. The old elective
arrangement, under which the employer paid a flat RM5, is gone — Parts B and D
of the Third Schedule were deleted by Act A1760/2025. Detail in
[EPF for foreign workers](/en/employment/epf-foreign-workers-malaysia).

**The RM6,000 SOCSO and EIS ceiling, from 1 October 2024.** Covered above.

**LINDUNG 24 Jam (SKBBK).** A new employee-funded non-employment accident scheme
sitting inside the PERKESO contribution table, phased at 0.75 per cent, then
1.0 per cent, then 1.25 per cent, and — critically — not mandatory for local
employees.

## Common mistakes

**Computing EPF as a percentage.** Below RM20,000 in monthly wages this is not a
shortcut; it is the wrong figure, and the EPF says so in terms. Payroll software
configured with a 13 per cent rule rather than the Third Schedule table will
under-contribute on almost every salary.

**Leaving the SOCSO ceiling at RM5,000.** Superseded on 1 October 2024. Check
the ceiling before you check the rate — a correct percentage applied to a stale
cap is still a shortfall.

**Treating the 13 per cent EPF employer rate as universal.** It steps down to
12 per cent above RM5,000 in monthly wages, and employees aged 60 and over sit
under entirely different Parts of the Third Schedule — 4 per cent employer and
nil employee for Malaysian citizens, 2 per cent both ways for non-citizens.

**Releasing final pay on the last working day.** The withholding duty runs 90
days from LHDN's receipt of the form, or until tax clearance. Paying out early
leaves the employer holding the employee's tax liability.

**Filing Form E without CP8D.** LHDN treats the Form E as incomplete. The filing
is not done.

**Counting HRD Corp headcount once a year.** The obligation attaches when you
reach ten Malaysian employees, not at the start of a financial year. Companies
that hire through the year commonly register months late and inherit arrears
plus 10 per cent interest per day of default.

**Assuming foreign workers sit outside the whole system.** They are now inside
EPF at 2 per cent, inside SOCSO, and inside the mandatory limb of LINDUNG 24 Jam
— while being outside EIS. The pattern is scheme-by-scheme, not all-or-nothing.
Note that the EIS exclusion is a matter of PERKESO's registration practice, not
the statute: the Act 800 definition of "employee" in s.3 carries no citizenship
test, and the First Schedule list of excluded persons never mentions foreign
workers, non-citizens or permanent residents.

**Confusing the two SOCSO categories with the two HRD Corp categories.** SOCSO
categories are about employee age. HRD Corp categories are about employer
headcount. They share a word and nothing else.

## What's next

Work through the scheme-specific pages in the order the money leaves your
account: [EPF](/en/employment/epf-employer-guide) first, because the
Third Schedule mechanic is the one most often implemented wrongly; then
[SOCSO and EIS](/en/employment/socso-eis-employer-guide) to confirm
your ceiling and categories; then
[PCB/MTD](/en/employment/pcb-mtd-malaysia) for the tax-withholding
stream and the CP38 directives that occasionally ride alongside it. If you
employ non-citizens, the [2 per cent EPF
mandate](/en/employment/epf-foreign-workers-malaysia) is the newest
obligation in the set and the one most likely to be missing from your system.

Then do the two audits that catch most defaults: reconcile your payroll
software's EPF output against the Third Schedule for three sample salaries, and
recount your Malaysian headcount against the HRD Corp threshold.

## Sources

- Employer Mandatory Contribution — https://www.kwsp.gov.my/en/employer/responsibilities/mandatory-contribution (KWSP)
- EPF Act 1991 Third Schedule — https://www.kwsp.gov.my/en/epf-act-1991-third-schedule (KWSP)
- Contribution For Non-Malaysian Citizen Employees — https://www.kwsp.gov.my/en/employer/responsibilities/non-malaysian-citizen-employees (KWSP)
- Contribution Rate — https://www.perkeso.gov.my/en/rate-of-contribution.html (PERKESO)
- Rate of Contribution Employment Insurance System (Act 800) — https://www.perkeso.gov.my/images/dokumen/151124-Rate%20Contribution%20ACT%20800.pdf (PERKESO)
- Employment Insurance System Act 2017 (Act 800) — full text with First Schedule and s.3 definitions — https://www.perkeso.gov.my/images/imej/akta_dan_peraturan/EMPLOYMENT_INSURANCE_SYSTEM_ACT_2017_Act_800.pdf (PERKESO)
- Contribution Payment — Interest on Late Payment of Contributions (ILPC) — https://www.perkeso.gov.my/en/uncategorised/801-contribution-payment.html (PERKESO)
- EPF Late Payment Charge / Dividend Calculator — https://secure.kwsp.gov.my/KWSP_files/latePayment/LatePaymentCalculatorStep1-en.html (KWSP)
- Contributions — https://www.perkeso.gov.my/en/our-services/employer-employee/contributions.html (PERKESO)
- Employer's Responsibility — https://www.hasil.gov.my/en/majikan/tanggungjawab-majikan/ (LHDN)
- Notification of Cessation of Employment — https://www.hasil.gov.my/en/majikan/pemberitahuan-pemberhentian-kerja/ (LHDN)
- Expansion of PSMB Act 2001 — https://hrdcorp.gov.my/expansion-of-psmb-act-2001 (HRD Corp)

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Source of truth: https://github.com/negaraku-md/NegaraKu.md
License: CC BY-SA 4.0