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Kos Pekerja Asing

Local worker cost calculator: what a Malaysian employee really costs

Hiring a Malaysian worker costs more than the wage. On top of pay, the employer contributes to EPF, SOCSO and EIS, and many employers also pay the HRD Corp levy. Enter a monthly wage to see the full employer cost to the sen, worked out from the official KWSP and PERKESO contribution tables.

Rates verified 2026-09-28

Employer cost calculator
RM
Total employer cost per employee, per month
RM 1,970.15
Per employee, per year
RM 23,641.80
All employees, per year
RM 23,641.80
RM 1,970.15 a month
Contributions on top of wage
+15.9% of wage
Monthly breakdown per employee
ItemEmployer paysDeducted from employee
Monthly wageRM 1,700.00—
EPF (KWSP)RM 221.00RM 187.00
SOCSO (PERKESO)RM 28.85RM 8.25
LINDUNG 24 JAM—RM 12.35
EIS (SIP)RM 3.30RM 3.30
HRD Corp levyRM 17.00—
TotalRM 1,970.15RM 210.90
Employee take-home before PCB
RM 1,489.10

PCB (the monthly income tax deduction) depends on the employee's tax reliefs, so it isn't included.

2026 contribution rates for Malaysian employees

SOCSO, LINDUNG 24 JAM and EIS stop at a wage ceiling of RM 6,000 a month. EPF has no ceiling.

SchemeEmployerEmployeeApplies to
EPF13%11%Below 60, wage RM 5,000 or less
EPF12%11%Below 60, wage above RM 5,000
EPF4%0%60 and above
SOCSO First Category1.75%0.5%Below 60 (Employment Injury and Invalidity)
SOCSO Second Category1.25%0%60 and above (Employment Injury only)
LINDUNG 24 JAM0%0.75%Any age; the employee can opt out
EIS0.2%0.2%Aged 18 to 60
HRD Corp levy1%—Employers with 10 or more Malaysian employees
HRD Corp levy0.5%—Employers with 5 to 9 employees who register

How the calculator works

  • EPF, SOCSO and EIS come from the official contribution tables, not a flat percentage. The tables group wages into bands, so amounts can differ from a straight percentage: by a few sen for SOCSO and EIS, and by more for EPF, which rounds up from the top of each band. Payroll software works the same way.
  • SOCSO, LINDUNG 24 JAM and EIS are capped at a wage of RM 6,000 a month. EPF is not capped.
  • The HRD Corp levy is charged on basic pay plus fixed allowances. Overtime, bonuses and commission are left out.
  • LINDUNG 24 JAM is paid only by the employee. Since 8 July 2026 it has been voluntary for Malaysian employees, who are enrolled unless they opt out.
  • Yearly figures are the monthly cost times 12. Bonuses, overtime, pay rises and PCB income tax are not included.
Hiring a foreign worker instead?

Foreign workers come with a levy, a security bond, FOMEMA checks and other costs that local hires don't. Use a sector calculator to see the full first-year cost.

Open the foreign worker calculatorRead the foreign worker cost breakdown

Frequently asked questions

How much does it cost to hire a local worker in Malaysia?
On the minimum wage of RM 1,700, an employee below 60 costs the employer RM 1,970.15 a month, or RM 23,641.80 a year. That is the wage plus RM 270.15 in employer EPF, SOCSO, EIS and HRD Corp levy, about 15.9% on top of pay. The employee takes home RM 1,489.10 before PCB.
What are the employer EPF, SOCSO and EIS rates in 2026?
For an employee below 60, the employer pays EPF of 13% on wages up to RM 5,000 and 12% above that, SOCSO of 1.75% and EIS of 0.2%. The employee pays 11% to EPF, 0.5% to SOCSO and 0.2% to EIS. SOCSO and EIS stop at a wage of RM 6,000.
Do I have to pay the HRD Corp levy?
Yes, if you have 10 or more Malaysian employees: the levy is 1% of each Malaysian employee's monthly wage. Employers with 5 to 9 employees can register voluntarily and pay 0.5%. Foreign workers don't count towards the headcount and aren't levied. Education-sector employers are exempt for 2026.
What is LINDUNG 24 JAM, and does the employer pay for it?
LINDUNG 24 JAM is SOCSO's cover for accidents outside work. The employee pays 0.75% of wages; the employer pays nothing but deducts it from pay. Since 8 July 2026 it has been voluntary for Malaysian employees: they are enrolled unless they opt out, and new hires have 30 days from registration to opt out. It stays mandatory for foreign workers.
What changes when the employee is 60 or older?
The employer's EPF drops to 4% and the employee stops contributing. SOCSO moves to the Second Category (1.25%, paid by the employer), and EIS no longer applies. Two cases the calculator doesn't cover: someone who first joins SOCSO at 55 or older is also Second Category, and someone aged 57 or older who has never paid EIS isn't covered by it.
Why don't the amounts match a straight percentage?
KWSP and PERKESO publish contribution tables that group wages into bands. EPF works from the top of each band and rounds up to the next ringgit (above RM 20,000 a month it uses exact percentages, still rounded up); SOCSO and EIS work from the middle of each band. Employers must use the tables, so the calculator does too, and its figures match payroll software.
What is the minimum wage in Malaysia in 2026?
RM 1,700 a month for full-time employees, the same in Peninsular Malaysia, Sabah and Sarawak. It has applied since 1 February 2025, and since 1 August 2025 for employers with fewer than five employees. Budget 2027, tabled on 9 October 2026, may change it; this page will be updated if it does.
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