Malaysia EIS contribution guide 2026
Learn how EIS contributions work in Malaysia, including employee rates, employer rates, job loss benefits, eligibility, claim situations and monthly payroll examples.
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EIS, also known as the Employment Insurance System or Sistem Insurans Pekerjaan (SIP), is Malaysia's job loss protection scheme under PERKESO. It is designed to provide temporary financial assistance and re-employment support to eligible employees who lose their jobs.
What Is EIS in Malaysia?
The Employment Insurance System (EIS), also called Sistem Insurans Pekerjaan (SIP), is a statutory contribution scheme administered by PERKESO. Its main purpose is to protect eligible employees when they lose employment through circumstances such as retrenchment, business closure or other qualifying job loss situations.
EIS is different from EPF and SOCSO. EPF is mainly for retirement savings. SOCSO focuses on social security protection such as employment injury and invalidity benefits. EIS focuses specifically on job loss protection, temporary income replacement and support to help affected employees return to work.
For employees, the EIS deduction is usually small compared with EPF and PCB. However, it is still an important statutory deduction because it provides a safety net during unemployment.
Who Needs to Contribute to EIS?
EIS generally applies to eligible private sector employees in Malaysia who are covered under PERKESO rules. Employers are responsible for registering eligible employees, deducting the employee portion from monthly wages and paying both the employee and employer portions through monthly payroll.
Some categories of workers may not be covered or may be treated differently depending on age, employment status, contract type or statutory rules. Employers should always refer to PERKESO's latest contribution rules when confirming whether a specific employee must contribute.
EIS Contribution Rates 2026
EIS contributions are shared between employee and employer. PERKESO states that EIS contributions are set at 0.4% of the employee's assumed monthly salary: 0.2% paid by the employer and 0.2% deducted from the employee's monthly salary.
| Monthly Wages | Employee Contribution | Employer Contribution | Total Contribution |
|---|---|---|---|
| Up to RM300 | RM0.50 | RM0.50 | RM1.00 |
| RM2,000 – RM2,100 | RM4.10 | RM4.10 | RM8.20 |
| RM4,000 – RM4,100 | RM8.10 | RM8.10 | RM16.20 |
| RM4,900 – RM5,000 | RM9.90 | RM9.90 | RM19.80 |
| Above RM6,000 | Subject to RM6,000 wage ceiling | Subject to RM6,000 wage ceiling | Based on maximum wage bracket |
How EIS Contributions Are Calculated
EIS is not usually calculated by simply multiplying the exact salary in every payroll case. In practice, payroll systems follow the official contribution table and wage brackets issued by PERKESO. This is why the contribution may appear as a fixed amount such as RM4.10, RM8.10 or RM9.90 depending on the salary range.
The employee portion reduces take-home pay because it is deducted from salary. The employer portion is an additional cost paid by the employer and does not reduce the employee's net salary.
EIS Calculation Examples
The examples below show how EIS may affect payroll at different salary levels. Exact amounts should be checked against the official PERKESO table.
| Monthly Salary | Employee EIS | Employer EIS | Payroll Meaning |
|---|---|---|---|
| RM2,000 | About RM4.00 - RM4.10 | About RM4.00 - RM4.10 | Small deduction from employee salary, matched by employer contribution. |
| RM4,000 | About RM8.00 - RM8.10 | About RM8.00 - RM8.10 | Employee and employer contribute similar amounts based on wage bracket. |
| RM5,000 | About RM9.90 - RM10.00 | About RM9.90 - RM10.00 | EIS remains relatively small compared with EPF and PCB. |
| Above RM6,000 | Based on maximum wage ceiling | Based on maximum wage ceiling | Contribution does not keep increasing after the wage ceiling. |
What Benefits Does EIS Provide?
EIS is not only a monthly deduction. It is designed to help eligible employees after job loss by providing temporary financial support and employment assistance. The exact benefit depends on the employee's eligibility, contribution record, job loss reason and PERKESO approval.
Job Search Allowance
Temporary financial support may be available while an eligible person is searching for new employment.
Reduced Income Allowance
Support may apply when a person with multiple jobs loses one or more jobs, but not all income sources.
Training Support
Eligible individuals may receive training or upskilling support to improve re-employment chances.
Re-employment Help
EIS focuses on helping affected employees return to suitable work as soon as possible.
Common Situations Where EIS May Help
EIS is mainly relevant when an employee loses employment through a qualifying loss of employment. This may include retrenchment, company closure, restructuring or other job loss situations accepted under PERKESO rules.
However, not every resignation or job change automatically qualifies for EIS benefits. Employees who resign voluntarily, are dismissed for misconduct or leave employment for non-qualifying reasons may not be eligible. Because eligibility can depend on facts and documents, affected employees should check directly with PERKESO before assuming they can claim.
Does EIS Affect Take-Home Pay?
Yes. The employee portion of EIS is deducted from monthly salary, so it slightly reduces take-home pay. For example, if the employee contribution is around RM8, the employee's net salary is reduced by around RM8 before considering other deductions such as EPF, SOCSO and PCB.
The employer portion does not reduce the employee's salary. It is paid separately by the employer as part of payroll compliance. This is why salary calculators usually show EIS as an employee deduction and may show the employer portion separately.
EIS vs EPF vs SOCSO
Many employees see EPF, SOCSO and EIS on their payslip but do not know the difference. All three may appear in payroll, but each serves a different purpose.
| Scheme | Main Purpose | Who Contributes? | Common Payroll Effect |
|---|---|---|---|
| EPF / KWSP | Retirement savings and long-term member savings | Employee and employer | Usually the largest statutory deduction from salary. |
| SOCSO / PERKESO | Social security protection such as employment injury and invalidity coverage | Employee and employer | Monthly contribution based on salary schedule. |
| EIS / SIP | Job loss protection and re-employment support | Employee and employer | Small monthly deduction, mainly for unemployment protection. |
Advantages and Limitations of EIS
Job Loss Protection
EIS provides a safety net if an eligible employee loses employment through a qualifying situation.
Employment Support
The scheme supports re-employment through job search and training-related assistance.
Eligibility Conditions
Benefits are not automatic. Employees must meet contribution, job loss and application requirements.
Not a Replacement Salary
EIS helps temporarily, but it is not meant to fully replace long-term employment income.
Payroll Checklist for Employers
- Confirm whether the employee is covered under EIS rules.
- Use the official PERKESO contribution schedule and wage ceiling.
- Deduct the employee portion from monthly wages.
- Pay the employer portion together with the employee portion.
- Keep payroll records, payslips and contribution records for reference.
- Check for PERKESO updates when contribution ceilings or schedules change.
Official References
For official contribution tables, eligibility requirements and claim procedures, always refer to PERKESO. This guide is written as a simplified payroll explanation for employees and employers.
Who Should Read This Guide?
- Employees checking EIS deductions from monthly salary
- Job seekers comparing salary packages and payroll deductions
- HR and payroll professionals handling monthly payroll submissions
- Business owners who want to understand EIS contribution obligations
- Employees who want to understand possible support after job loss
Frequently Asked Questions
Is EIS contribution mandatory for employees in Malaysia?
EIS contribution is generally mandatory for eligible employees covered under the Employment Insurance System. Employers are responsible for deducting the employee portion and paying the employer portion through monthly payroll.
How much EIS does an employee contribute every month?
The employee portion is commonly 0.2% of the employee's assumed monthly salary, subject to the official PERKESO contribution table and wage ceiling.
How much EIS does an employer contribute?
The employer also commonly contributes 0.2% of the employee's assumed monthly salary. This employer portion is paid separately and is not deducted from the employee's take-home salary.
Is EIS calculated on basic salary or gross salary?
EIS is generally based on wages that are subject to EIS contribution. Payroll treatment may depend on the type of payment, such as basic salary, fixed allowances, overtime or other remuneration.
Does EIS reduce take-home pay?
Yes. The employee portion of EIS is deducted from monthly salary, so it slightly reduces monthly take-home pay. The employer portion does not reduce the employee's net salary.
Is EIS the same as SOCSO?
No. SOCSO provides social security protection such as employment injury and invalidity benefits. EIS focuses on job loss protection, financial assistance and re-employment support.
Can EIS help if I lose my job?
Eligible employees may apply for EIS benefits after job loss, subject to PERKESO rules, qualifying conditions and approval. Benefits may include financial assistance, reduced income allowance, training support and re-employment services.
Does EIS apply if I resign?
Voluntary resignation may not qualify as a loss of employment for EIS benefits. Eligibility depends on the reason for leaving employment and PERKESO's assessment of the claim.
What is the EIS wage ceiling?
EIS contributions are subject to the applicable wage ceiling. PERKESO announced the wage ceiling increase to RM6,000 effective from 1 October 2024, so wages above the ceiling are generally treated based on the maximum contribution bracket.
Related Salary Guides
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Related Calculators
Use these calculators to estimate EIS contributions, salary deductions and monthly take-home pay in Malaysia.