Question 1

How does EPF (KWSP) work on a Malaysian payslip?

Accepted Answer

The Employees Provident Fund (EPF/KWSP) is Malaysia's mandatory retirement savings scheme. Employees contribute 11% of monthly wages (those earning below RM 5,000 may choose 11% or a reduced 7%), while employers contribute 12% for employees earning above RM 5,000 and 13% for those earning RM 5,000 or below. Contributions are split between Account 1 (retirement, 70%) and Account 2 (pre-retirement withdrawals, 30%).

Question 2

What is PCB (Monthly Tax Deduction) in Malaysia?

Accepted Answer

PCB (Potongan Cukai Bulanan), also known as MTD (Monthly Tax Deduction), is the mechanism for withholding income tax from employee salaries. The amount is calculated using LHDN (tax authority) schedules based on gross monthly income, tax reliefs, and the number of dependents. Employees who earn more than RM 34,000 annually (or RM 2,833/month) after EPF deduction are subject to PCB.

Question 3

What are SOCSO and EIS contributions in Malaysia?

Accepted Answer

SOCSO (Social Security Organisation) provides employment injury and invalidity protection. For employees earning RM 5,000 or below, both Employment Injury and Invalidity schemes apply; above RM 5,000, only Employment Injury coverage applies. EIS (Employment Insurance System) provides a safety net for workers who lose employment, with both employee and employer contributing 0.2% of monthly wages each, capped at insurable earnings of RM 5,000.

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Common Deductions in Malaysia

CleverSlip Features for Malaysia

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