EIS in Malaysia is the Employment Insurance System, a social protection scheme that provides financial support and employment assistance to eligible workers who lose their jobs.
It is administered by PERKESO, also known as SOCSO, under the Employment Insurance System Act 2017. Eligible employers and employees make monthly EIS contributions through payroll.
What Does EIS Stand For?
EIS stands for Employment Insurance System.
In Bahasa Malaysia, it is known as Sistem Insurans Pekerjaan (SIP). PERKESO also refers to the employment insurance protection program as LINDUNG KERJAYA.
The scheme is administered by the Social Security Organization (SOCSO), known locally as Pertubuhan Keselamatan Sosial (PERKESO).
EIS operates under the Employment Insurance System Act 2017 (Act 800) and came into force on 1 January 2018. The Act sets out the contribution framework, coverage requirements and benefits available to eligible insured employees who experience a loss of employment.
For Malaysian payroll purposes, the terms EIS, SIP, PERKESO Act 800 contribution and LINDUNG KERJAYA may all appear in relation to the same employment insurance scheme.
What Is the Purpose of EIS?
The main purpose of EIS is to provide temporary financial and employment support to eligible employees after they lose their jobs.
The scheme does more than provide an unemployment-related payment. PERKESO uses EIS to help eligible insured persons return to employment through job matching, employment services and approved skills training.
An eligible employee who experiences a recognized Loss of Employment (LOE) may receive income replacement while searching for a new job. The employee may also receive re-employment assistance through PERKESO and MYFutureJobs.
PERKESO states that insured persons may receive employment services and, where eligible, vocational training as part of the EIS program.
For employers and payroll teams, EIS is therefore an important part of Malaysia's statutory payroll and employee social protection framework alongside SOCSO/PERKESO, EPF/KWSP and PCB/MTD.
Who Is Covered by EIS in Malaysia?
EIS generally covers eligible employees working under a contract of service or apprenticeship in Malaysia.
PERKESO states that private-sector employers are required to make monthly EIS contributions for employees who fall within the coverage of Act 800.
Employees generally contribute from age 18 to 60. However, a special rule applies to employees aged 57 or above who have never contributed to EIS before reaching age 57. These employees are exempt from EIS contributions.
EIS coverage generally applies to eligible:
- Malaysian citizens
- Permanent residents
- Temporary residents who meet the applicable conditions
PERKESO's EIS material identifies Malaysian citizens, permanent residents and temporary residents in covered employment as eligible categories.
The employee must be working under an employment relationship that falls within Act 800. Simply receiving money from a business does not automatically make a person an employee for EIS purposes.
Who Is Exempt From EIS in Malaysia?
Not every person working in Malaysia is covered by EIS.
Foreign workers are not covered under the Employment Insurance System Act 2017. This includes foreign employees who may still be subject to other PERKESO social security requirements under the Employees' Social Security Act 1969. Employers should therefore not assume that SOCSO coverage for a foreign employee also means EIS coverage.
The self-employed are also outside the standard EIS scheme under Act 800. Separate PERKESO social security arrangements exist for eligible self-employed persons.
Permanent government employees and certain other excluded public-sector categories are not covered under the standard EIS contribution framework.
Employees who first enter covered employment at age 57 or older without any previous EIS contribution before age 57 are also exempt.
Domestic workers require more careful treatment. Current PERKESO guidance confirms that eligible local domestic workers, including Malaysian citizens, permanent residents and temporary residents, can be covered under Act 800. Foreign domestic workers are not covered by EIS, although they may have other PERKESO protection requirements.
Employers should therefore determine EIS eligibility based on the employee's status and the current PERKESO rules rather than applying EIS automatically to every person on payroll.
How Does EIS Work in Malaysia?
EIS is normally handled as part of the employer's monthly payroll process.
First, the employer registers eligible employees with PERKESO. Payroll then determines the employee's wages that are subject to EIS and identifies the correct contribution amount under the statutory contribution schedule.
The contribution has two parts:
Employer EIS contribution: paid by the employerEmployee EIS contribution: deducted from the employee's wages
The employer combines these amounts and pays the total contribution to PERKESO.
Contribution information and payments can be managed through the PERKESO ASSIST Portal and supported payment channels. PERKESO's ASSIST system includes employee registration, EIS contribution processing, payments and contribution records.
If an insured employee later experiences a qualifying loss of employment, the employee may apply to PERKESO for EIS benefits.
An application for EIS benefits generally needs to be submitted within 60 days from the date of loss of employment, subject to the conditions under Act 800.
Employer and Employee EIS Contributions
For 2026, the EIS contribution framework remains:
Employer contribution: 0.2%
Employee contribution: 0.2%
Combined contribution: 0.4%
The contribution is based on the employee's insured monthly wages and the statutory EIS contribution schedule under Act 800.
The current insured wage ceiling is RM6,000 per month.
PERKESO increased the wage ceiling from RM5,000 to RM6,000 effective 1 October 2024. For an employee whose monthly wages exceed RM6,000, EIS contributions are therefore subject to the RM6,000 insured wage ceiling rather than continuing to increase without limit.
This means employers should not calculate EIS on the employee's entire salary where wages exceed the applicable ceiling.
Payroll teams should also use the official Act 800 contribution schedule rather than assuming that every contribution can be calculated simply by multiplying actual salary by 0.2%. The statutory schedule uses wage bands and prescribed contribution amounts.
For a complete salary-band breakdown, employers should refer to a dedicated Malaysia EIS contribution rates guide or the latest PERKESO contribution schedule.
Simple EIS Calculation Example
Consider an eligible Malaysian employee earning RM4,000 per month.
Under the Act 800 contribution schedule, monthly wages above RM3,900 but not exceeding RM4,000 produce the following EIS contribution:
Monthly wages: RM4,000
Employer EIS contribution: RM7.90
Employee EIS contribution: RM7.90
Total paid to PERKESO: RM15.80
The employee's RM7.90 share is deducted through payroll. The employer adds its own RM7.90 contribution and submits the total RM15.80 to PERKESO.
The official Act 800 contribution schedule specifies RM7.90 from each party for this wage band.
This example also shows why employers should refer to the statutory contribution schedule instead of calculating RM4,000 × 0.2% and assuming that the result is always the exact payroll deduction.
For employees earning more than RM6,000 per month, the current contribution ceiling applies.
Employer Responsibilities for EIS in Malaysia
Employers have an important role in maintaining EIS compliance.
Register Eligible Employees
Employers should ensure that employees who are covered by Act 800 are correctly registered with PERKESO.
PERKESO states that employee registration is the responsibility of the employer.
Calculate the Correct EIS Contribution
Employers must use the employee's eligible wages and the current Act 800 contribution schedule when processing payroll.
The employee's contribution should be deducted from wages, while the employer must separately bear the employer contribution.
Pay EIS Contributions to PERKESO
The employer is responsible for submitting both the employer and employee portions to PERKESO.
Contributions for a month must generally be paid no later than the 15th day of the following month.
For example, EIS contributions for September must generally be paid by 15 October.
Maintain Contribution Records
Employers should maintain clear payroll records showing wages, EIS deductions, employer contributions and payments made to PERKESO.
Accurate records help the employer reconcile payroll and can also be important when PERKESO verifies an employee's contribution history.
Update Employee Information
Employers should update PERKESO records when relevant employee information changes or employment ends.
Keeping employee data current can help prevent incorrect contributions and reduce problems when an employee later needs to make an EIS benefit claim.
Use the Correct Payroll Wage Ceiling
Payroll systems should reflect the current RM6,000 EIS wage ceiling, which has applied since 1 October 2024. Using the previous RM5,000 ceiling may result in under-contribution for employees whose wages exceed the old limit.
Employee Benefits and Impact of EIS
For employees, the EIS contribution is a relatively small payroll deduction that provides access to a broader employment protection system when the qualifying conditions are met.
EIS support may include several types of assistance.
Job Search Allowance
Eligible insured persons who experience a qualifying loss of employment may receive temporary income replacement while looking for new employment.
The amount and duration depend on the employee's qualifying contribution history and the applicable rules.
Early Re-Employment Allowance
An eligible EIS recipient who returns to work while receiving Job Search Allowance may qualify for an Early Re-Employment Allowance.
PERKESO states that this allowance can equal 25% of the remaining Job Search Allowance entitlement, subject to the applicable conditions.
Training Support
Eligible individuals may be referred for vocational training to improve their employment prospects.
PERKESO currently states that approved training costs of up to RM4,000 may be borne under EIS, subject to eligibility and program conditions.
Job Search Support
PERKESO also provides employment services and job matching through MYFutureJobs to support eligible insured persons returning to employment.
EIS therefore combines income protection with practical support designed to help employees move back into employment.
Important EIS Terms in Malaysia
EIS
Employment Insurance System, the English name for Malaysia's employment insurance scheme under Act 800.
SIP
Sistem Insurans Pekerjaan, the Bahasa Malaysia name for the Employment Insurance System.
PERKESO / SOCSO
Pertubuhan Keselamatan Sosial, known in English as the Social Security Organization (SOCSO). PERKESO administers EIS and several other Malaysian social security schemes.
Act 800
The Employment Insurance System Act 2017, which provides the legal framework for EIS contributions, coverage and benefits in Malaysia.
Insured Person
An employee insured under the Employment Insurance System who may qualify for benefits if the requirements under Act 800 are met.
Loss of Employment (LOE)
A recognised loss of employment that may allow an insured person to apply for EIS benefits.
Not every ending of employment qualifies as an LOE. PERKESO identifies situations such as voluntary resignation, retirement, expiry of certain fixed-term contracts and dismissal for misconduct as circumstances that generally do not qualify in the normal way for EIS benefits.
Job Search Allowance (JSA)
Financial assistance that may be paid to an eligible insured person following a qualifying loss of employment.
ASSIST Portal
PERKESO's employer platform used for functions including employee registration, contribution processing, payments and contribution records.
EIS vs SOCSO in Malaysia
EIS and SOCSO contributions are both administered by PERKESO, but they provide different types of protection.
| Feature | EIS / SIP | SOCSO / PERKESO |
|---|---|---|
| Main purpose | Protection following qualifying loss of employment | Social security protection for employment injury, invalidity and related risks |
| Main law | Employment Insurance System Act 2017, Act 800 | Employees' Social Security Act 1969, Act 4 |
| Administered by | PERKESO / SOCSO | PERKESO / SOCSO |
| Employer contribution | Generally 0.2% under EIS framework | Depends on applicable SOCSO contribution category |
| Employee contribution | Generally 0.2% under EIS framework | Depends on applicable contribution category |
| 2026 wage ceiling | RM6,000 | RM6,000 for applicable Act 4 contributions |
| Main benefit or function | Income and re-employment support after qualifying job loss | Employment injury, invalidity and related social security protection |
| Foreign workers | Not covered under Act 800 | Covered under applicable Act 4 foreign-worker schemes |
| Responsible authority | PERKESO | PERKESO |
The distinction is important for payroll teams because SOCSO and EIS are separate statutory payroll contributions even though both are administered through PERKESO.
Employers should therefore calculate and record them separately in payroll.
Frequently Asked Questions About EIS in Malaysia
Is EIS Compulsory in Malaysia?
Yes. EIS is compulsory for employers and employees who fall within the coverage of the Employment Insurance System Act 2017.
Eligible private-sector employers are required to make monthly contributions for covered employees.
EIS should not be treated as an optional employee benefit where the employer and employee fall within the statutory coverage.
Who Has to Pay EIS in Malaysia?
Both the employer and eligible employee contribute to EIS.
The employer pays its own share and deducts the employee's share through payroll. The employer then submits both portions to PERKESO.
The standard contribution framework is 0.2% from the employer and 0.2% from the employee, subject to the Act 800 contribution schedule.
How Much Is EIS in Malaysia?
EIS contributions are based on a total contribution framework of 0.4%, consisting of:
0.2% employer share0.2% employee share
The actual payroll contribution follows PERKESO's statutory wage bands.
The current insured wage ceiling is RM6,000 per month, effective from 1 October 2024.
Employees earning above RM6,000 do not continue generating higher EIS contributions beyond the applicable ceiling.
What Is the EIS Contribution Deadline in Malaysia?
Monthly EIS contributions must generally be paid to PERKESO by the 15th day of the following month.
For example, contributions for August are generally due by 15 September.
Employers should include this date in their monthly payroll compliance calendar.
What Happens if an Employer Pays EIS Late?
PERKESO may impose Interest on Late Payment of Contributions (ILPC) when statutory contributions are not paid within the required period.
PERKESO currently states that late contribution interest is imposed at 6% per annum calculated for each day of delay. Its employer FAQ further states that where the calculated late-payment interest is below RM5, a minimum interest charge of RM5 for the month applies.
Employers should correct overdue contributions promptly rather than waiting until the next normal payroll cycle.
Are Foreign Employees Covered by EIS in Malaysia?
No. Foreign workers are generally not covered by EIS under Act 800.
Foreign employees may, however, be covered under other PERKESO schemes. Current PERKESO requirements include separate social security protection for eligible foreign workers under Act 4.
Employers should therefore distinguish between SOCSO eligibility and EIS eligibility when configuring payroll for foreign employees.
Are Domestic Workers Covered by EIS?
Eligible local domestic workers can be covered.
Current PERKESO guidance states that domestic workers who are Malaysian citizens, permanent residents or qualifying temporary residents can fall under Act 800 EIS coverage.
Foreign domestic workers are not covered under EIS, although other PERKESO contribution requirements can apply to them.
Does EIS Apply to Employees Over 60?
Standard EIS contributions generally apply to covered employees between 18 and 60 years old.
Employees aged 57 or above who had no previous EIS contributions before reaching age 57 are exempt. Employers should check an older employee's contribution status rather than making an assumption based only on the employee's current salary.
Can an Employee Claim EIS After Resigning?
A normal voluntary resignation generally does not qualify as a loss of employment for EIS benefits.
PERKESO also identifies retirement, dismissal for misconduct, expiry of certain fixed-term contracts and completion of a specified project among situations that generally do not qualify as a normal EIS loss-of-employment claim.
However, Act 800 recognizes specific circumstances around loss of employment, so individual cases should be assessed according to PERKESO's current rules.
How Long Does an Employee Have to Apply for EIS Benefits?
An eligible insured person should generally apply within 60 days from the date of loss of employment.
The employee must also satisfy the required contribution conditions and meet PERKESO's definition of a qualifying loss of employment.
