In Malaysia, there are 5 different government departments that required employers/employees to make contribution based on the salary received.
There is different rules among the 5 government departments which may leads employers to confusion! For example, overtime payment does not need to be reported to EPF but SOCSO does; Gratuity need to be reported to SOCSO but not to EIS. How to remember if so many different contributions?
Don’t worry, we have prepared a summary regarding every government department rules! Just remember our page if you need!
Contribution Details
Payment liable for EPF contribution:
- Salary
- Bonus
- Allowance
- Commission
- Wages for maternity/ Study/ Half day leave
- Incentive
- Arrears of wages
- Payment for unutilized annual or medical leave
- Other payments under services contract or otherwise
Payment that NOT liable for EPF contribution
- Service charges
- Overtime payment
- Severance pay or allowance
- Payment in lieu of notice of termination of employment
- Gratuity
- Retirement benefits
- Director’s fee
- Travelling allowance or the value of any travelling concession
Payment that liable for SOCSO contribution:
- Salary
- Overtime payment
- Allowance
- Commission
- Gratuity
- Wages for maternity/ Study/ Half day leave
- Incentive
- Arrears of wages
- Service charges
- Payment for unutilized annual or medical leave
- Other payments under services contract or otherwise
Payment that NOT liable for SOCSO contribution
- Retirement benefits
- Severance pay or allowance
- Director’s fee
- Bonus
- Special Expense (Claims)
- Benefits in Kinds
- Other Remuneration
- Travelling allowance or the value of any travelling concession
- Payment in lieu of notice of termination of employment
Payment that liable for EIS contribution
- Salary
- Paid leave
- Overtime payment
- Allowance
- Commission
- Extra Work on Holiday
Payment that NOT liable for EIS contribution:
- Travelling Allowance
- Bonus
- Gratuity
- Special Expense (Claims)
- Benefits in Kinds
- Other Remuneration
Payment that liable for HRDC (p.k.a. HRDF) contribution:
- Salary
- Allowances
- Acting allowance
- Entertainment allowance
- Long service allowance
- Housing allowance
- Skill allowance
- Machine maintenance allowance
- Temporary exchange allowance
- Cost of living allowance
- Special replacement allowance
- Return allowance/ allowance incentive allowance (where the amount per month is fixed)
Payment that NOT liable for HRDC (p.k.a. HRDF) contribution:
- Bonus
- Rate of service allowance
- Travel allowance
- Overtime allowance
- Shift allowance
- Meal allowance
- Lunch allowance
- Commissions
- Production incentive allowance
- Special work allowance
- Replacement/ discomfort allowance
- Attendance allowances / attendance incentive allowance
- Gratuity on discharge or retirement
Payment that liable for PCB contribution:
- Salary
- Overtime payment
- Commission
- Allowance
- Bonus / Incentive
- Director’s fee
- Perquisite
- Gratuity
- Employee’s share option scheme (ESOS)
- Tax borne by the employer
- Compensation for loss of employment
- Any other payment in addition to normal remuneration for current month
(201706002678 & AF 002133)