EIS Contribution Table 2026 Malaysia – Rates, Salary Ceiling and Calculation Guide

Every month, employers are required to submit multiple statutory contributions: EPF, SOCSO, and EIS. While EIS has a simple structure, errors often occur when salary limits or contribution rules are misunderstood.

By understanding the EIS Contribution Table 2026, HR teams can ensure accurate payroll processing and reduce compliance risk.

What Is EIS?

EIS stands for the Employment Insurance System, a statutory contribution scheme in Malaysia regulated under PERKESO (SOCSO). The purpose of EIS is to provide temporary financial assistance and re-employment support to employees who lose their jobs involuntarily.

The EIS scheme is governed by the Employment Insurance System Act 2017 and is administered by PERKESO. From a payroll perspective, EIS works alongside two other mandatory statutory contributions:

All three contributions must be processed and submitted every month as part of payroll compliance.

Why EIS Contribution Matters for Employers

For employers, EIS is not optional. It is a legal requirement under Malaysian employment law. Correct EIS contributions can:

Protect employees in the event of retrenchment or job loss
Ensure payroll compliance during audits or inspections
Prevent penalties, late payment charges, and enforcement action

Failure to contribute or incorrect submission may result in:

Fines
Compound penalties
Legal action by PERKESO

Because EIS payments are submitted together with SOCSO, errors often affect both contributions at the same time, increasing compliance risk.

Who Needs to Contribute to EIS

EIS applies to most employees in Malaysia, including:

Malaysian citizens
Permanent employees
Contract employees
Full-time employees
Part-time employees (if monthly wages meet the minimum requirement)

As long as the employee is under a contract of service and within the eligible age range, EIS contributions are required.

EIS does not apply to:

Foreign workers
Domestic helpers
Self-employed individuals (unless registered voluntarily under specific schemes)

Employer Responsibilities

Employers are responsible for ensuring EIS compliance throughout the employment lifecycle. This includes:

Registering the company with PERKESO
Registering all eligible employees under EIS
Deducting the employee’s portion monthly
Contributing the employer’s portion
Submitting contributions before the monthly deadline
Ensuring salary data and contribution amounts are accurate

Errors in salary input or late submission may result in penalties.

EIS Contribution Rate (2025/2026)

The EIS contribution rate remains unchanged for 2025 and 2026.

Contribution Type	Rate
Employer	0.2%
Employee	0.2%
Total	0.4% of monthly wages

Both employer and employee contribute equally.

Salary Ceiling for EIS

EIS contributions are subject to a monthly salary ceiling of RM5,000. This means:

Salaries above RM5,000 are still calculated based on RM5,000 only
Any amount exceeding RM5,000 is not subject to additional EIS contribution

Example: If an employee earns RM6,000 per month, the EIS calculation is capped at RM5,000.

What Salary Components Are Subject to EIS

The following salary components are typically subject to EIS:

Basic salary
Fixed monthly allowances
Contractual allowances

These components are usually not subject to EIS:

Overtime payments
Reimbursements
Travel claims
Meal claims
One-off non-contractual payments

How to Calculate EIS Contribution

Calculating EIS contributions is relatively straightforward, but accuracy is critical because it directly affects payroll compliance. Employers must calculate both the employer and employee portions separately, even though the rates are the same.

Basic EIS Calculation Formula

The basic formula used for EIS is:

EIS Contribution = Monthly Contributable Salary × 0.2%

This calculation is applied:

Once for the employee portion
Once for the employer portion

The combined total equals 0.4% of monthly wages, subject to the salary ceiling.

Key Rule to Remember: Salary Ceiling

EIS contributions are capped at a maximum monthly salary of RM5,000. This means:

If an employee earns RM5,000 or less, the full salary is used for calculation
If an employee earns more than RM5,000, the calculation must still be based on RM5,000 only

Failing to apply the salary ceiling correctly is one of the most common payroll errors.

Example 1: Salary Below the EIS Ceiling

Monthly Salary: RM3,000

Contribution Type	Calculation	Amount
Employee (0.2%)	RM3,000 × 0.2%	RM6.00
Employer (0.2%)	RM3,000 × 0.2%	RM6.00
Total EIS Contribution		RM12.00 per month

In this case, the full salary is used because it is below the RM5,000 ceiling.

Example 2: Salary Above the EIS Ceiling

Monthly Salary: RM6,000

Salary Used for Calculation: RM5,000

Contribution Type	Calculation	Amount
Employee (0.2%)	RM5,000 × 0.2%	RM10.00
Employer (0.2%)	RM5,000 × 0.2%	RM10.00
Total EIS Contribution		RM20.00 per month

Even though the employee earns RM6,000, contributions must not exceed the RM5,000 ceiling.

Want to double-check your payroll figures? Use our free EIS calculator to verify contributions before submission.

Monthly Payroll Process for EIS

To ensure consistent compliance, HR and payroll teams should treat EIS as part of a standard monthly payroll workflow.

A proper monthly process includes:

Identifying salary components that are subject to EIS
Excluding non-contributable items such as reimbursements and overtime
Applying the RM5,000 salary ceiling correctly
Calculating employer and employee contributions separately
Deducting the employee portion from payroll
Submitting EIS together with SOCSO contributions
Retaining payroll records and submission receipts for audit purposes

When EIS Must Be Paid

EIS contributions must be submitted every month, together with SOCSO payments, in accordance with PERKESO’s contribution schedule.

Employers should take note that:

Late submissions are considered non-compliance
Payment deadlines apply even if there are no changes in salary
EIS is still payable for eligible employees during probation or contract periods

Failure to submit on time may result in:

Penalty charges
Interest on late payments
Enforcement notices or further action by PERKESO

Employee Benefits Under EIS

EIS is designed to support employees who lose their jobs through no fault of their own. Employees covered under EIS may be eligible for:

Temporary financial assistance after job loss
Re-employment allowance
Job matching and placement support
Training and upskilling programmes
Career counselling services

These benefits apply only if:

Job loss is involuntary (e.g. retrenchment)
Termination is not due to misconduct

Common HR & Employer Mistakes

Despite its simple structure, EIS errors are still common in payroll operations. Typical mistakes include:

Forgetting to register new hires under EIS
Using incorrect salary figures for the calculation
Ignoring the RM5,000 salary ceiling
Excluding contract or part-time employees incorrectly
Submitting contributions late
Confusing EIS rules with SOCSO contribution requirements

Most of these issues arise from inconsistent payroll processes or outdated assumptions.

Best Practices for HR Teams

To minimise compliance risk and ensure accuracy, HR and payroll teams should adopt the following best practices:

Review statutory contributions as part of every payroll cycle
Stay updated with PERKESO announcements and circulars
Clearly separate EPF, SOCSO, and EIS calculations in payroll systems
Use payroll calculators or system checks for verification
Conduct periodic internal payroll audits to catch errors early

Good documentation and regular reviews help protect both the employer and employees.

FAQs

Is EIS contribution compulsory for all employees in Malaysia?

Yes, for eligible Malaysian employees under a contract of service.

What is the EIS salary ceiling for 2025/2026?

The monthly salary ceiling is RM5,000.

How much do the employer and employee contribute?

Both contribute 0.2% each, totaling 0.4% of monthly wages.

Are contract and probation employees required to contribute?

Yes, as long as they meet eligibility requirements.

Do foreign workers need to contribute to EIS?

No, EIS does not apply to foreign workers.

What happens if employers fail to pay EIS on time?

Late payments may result in penalties, interest, and enforcement action by PERKESO.

Is EIS calculated together with EPF and SOCSO?

EIS is calculated separately but paid together with SOCSO during payroll submission.

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