Malaysia continues to strengthen its social protection framework and workforce resilience through key policy enhancements. The statutory updates highlight changes affecting payroll, employee welfare and social security coverage.
1) Employees’ Provident Fund (EPF) policy and product enhancements in 2026
EPF continues to introduce initiatives aimed at strengthening retirement security and member services through its policy and product enhancements. Alongside these initiatives, the current statutory contribution rates remain applicable for both employees and employers.
Current mandatory EPF contribution rates are as follows:
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Employees: 11% mandatory contribution;
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Employers: 13% mandatory contribution for employees with monthly salaries of RM5,000 and below;
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Employers: 12% mandatory contribution for employees with monthly salaries exceeding RM 5,000.
These contribution rates are part of EPF’s continued efforts to support sustainable retirement savings while ensuring adequate social protection for the workforce. Employers are encouraged to stay updated on the latest EPF developments and ensure their payroll practices remain compliant with current statutory requirements.
2) Social Security Organisation (SOCSO) 24-hour Protection Scheme (effective June 2026)
As part of Malaysia’s social protection enhancements under the 2026 updates, SOCSO continues to provide extended coverage through the 24-hour Non-Employment Injury Scheme, which offers protection beyond workplace-related incidents.
Key benefits include:
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Comprehensive protection for accidents not arising out of employment.
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24-hour coverage, including accidents occurring outside working hours.
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Medical treatment costs financed by SOCSO, subject to eligibility.
Contribution structure:
This enhancement reflects SOCSO’s continued commitment to strengthening social protection coverage and improving employee welfare beyond traditional workplace risks.
3) Employment Insurance System (EIS) – Eligibility and Benefits
EIS, administered by SOCSO, provides financial assistance and re-employment support to insured persons) who experience involuntary loss of employment. The scheme is designed to support workers during periods of unemployment while they transition to new job opportunities.
IP may be eligible for EIS benefits if they meet the following conditions:
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Application requirement: Applications must be submitted within 60 days from the date of Loss of Employment (LOE).
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Contributions qualifying condition: The IP must have made sufficient monthly contributions for the required qualifying period.
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Definition of LOE: Loss of Employment is defined under the EIS Act as involuntary unemployment, subject to the Act’s specified conditions and exclusions; certain situations such as voluntary resignation, retirement, expiry of fixed-term contracts or dismissal for misconduct are generally excluded from EIS benefit eligibility.
Through these provisions, EIS aims to provide temporary income support and structured re-employment assistance, helping displaced workers re-enter the labour market more effectively.
Stay compliant with Malaysia’s latest statutory updates by outsourcing your payroll function for greater accuracy, efficiency and peace of mind. Reach out to us to learn how we can support your payroll and HR compliance needs.
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