Payroll service

? Quick Answer: What does a payroll service cover?

  • ✓ Monthly salary processing – Basic pay, overtime, allowances, deductions.
  • ✓ Statutory contributions – EPF (11‑13% employee, 12‑13% employer), SOCSO (up to RM49.75/month), EIS (0.2% of wages).
  • ✓ PCB (Monthly Tax Deduction) – Calculation and deduction of income tax.
  • ✓ Payslip generation – Detailed monthly payslips.
  • ✓ Annual EA forms – Preparation for each employee for tax filing.

🇲🇾 2026 Rates

EPF employee: 11% (or 13% by election)

EPF employer: 12%‑13%

SOCSO: Up to RM49.75/month

EIS: 0.2% of wages

PCB: Based on LHDN schedule

Why should a company outsource payroll?

Payroll errors can lead to fines from EPF, SOCSO, and LHDN, as well as employee dissatisfaction. Outsourcing ensures accuracy, timeliness, and full compliance with ever‑changing regulations. It also frees up management time to focus on core business activities. For foreign‑owned companies, navigating Malaysian payroll regulations can be complex; professional payroll services provide peace of mind.

What are the key statutory payroll obligations in Malaysia?

  • EPF (Employees Provident Fund) – Monthly contributions based on wages, due by the 15th of the following month.
  • SOCSO (Social Security Organization) – Contributions for work‑related injury and invalidity, due by the 15th.
  • EIS (Employment Insurance System) – Contributions for unemployment benefits, due with SOCSO.
  • PCB (Monthly Tax Deduction) – Income tax deducted and remitted to LHDN by the 15th.
  • Form EA – Annual statement of remuneration for each employee, to be provided by the end of February (or March for electronic submission).

Source: EPF | SOCSO | LHDN

What are the penalties for payroll non‑compliance?

Late EPF contributions can attract a penalty of up to 6% per annum on the overdue amount, plus a compound fine. SOCSO late payments incur a 1% monthly penalty. Late or incorrect PCB remittance may result in fines of up to RM200 per error, and directors can be personally liable for unpaid taxes. LHDN also has the power to impose additional penalties under the Income Tax Act 1967.

Our payroll services

  • ✓ Monthly salary computation and payslip generation
  • ✓ Calculation and filing of EPF, SOCSO, EIS, and PCB
  • ✓ Preparation of Form EA and other year‑end reports
  • ✓ Leave and overtime tracking (if required)
  • ✓ Advice on statutory updates (e.g., minimum wage changes)
Sim Chong Yen

Sim Chong Yen
FCCA, MIA

Frequently asked questions about payroll services

1. What is the minimum wage in Malaysia for 2026?

The minimum wage is currently RM1,500 per month, applicable to all employers. Any changes will be announced by the government.

2. When are statutory contributions due?

EPF, SOCSO, EIS, and PCB are generally due by the 15th of the month following the month of salary payment.

3. What is PCB and who needs to deduct it?

PCB (Potongan Cukai Bulanan) is monthly tax deduction for employees whose chargeable income exceeds the tax threshold. All employers must deduct PCB for employees who are subject to income tax.

4. What is Form EA and when is it due?

Form EA is the annual statement of remuneration provided to employees. It must be given to employees by the end of February (or March for electronic submission).

5. Can payroll be processed for foreign employees?

Yes. Foreign employees on valid passes must also have EPF, SOCSO, and EIS contributions as required by law. PCB applies if they are tax residents.

6. What records must an employer keep for payroll?

Employers must retain payroll records, including payslips, contribution receipts, and PCB statements, for at least 7 years for audit purposes.

7. How much do payroll services cost?

Fees vary based on the number of employees and complexity. Many providers charge a monthly fee per employee, typically RM30–RM80 per head. JT & CY Advisory offers competitive rates.

8. What happens if we miss a PCB payment?

LHDN may impose penalties, interest, and could take legal action. Directors may also be held personally liable.

9. Do we need to provide payslips?

Yes, under the Employment Act 1955, employers must provide itemised payslips to each employee.

10. Can JT & CY Advisory handle payroll for our company?

Yes. We offer full payroll processing, including contributions and tax filings, to ensure compliance.

11. What is the current EPF contribution rate for foreign employees?

Foreign employees can choose to contribute at a lower rate (5.5% employee, 12% employer) under certain conditions. We can advise based on individual cases.

12. How do I start using your payroll services?

Contact us for a consultation. We'll understand your requirements and provide a tailored proposal.

Important Notice: This information is for general informational purposes only and should not be relied upon as legal, financial, or professional advice. JT & CY Advisory is an affiliate of Terra Advisory Services (ACRA FA20122913). For advice tailored to your specific circumstances, please contact us directly. Last updated: March 2026.