Malaysia Payroll Service
Malaysia Payroll Service
Managing payroll can be a complex and time-consuming task, especially for foreign businesses operating in Malaysia, where statutory requirements add to the intricacy. To alleviate these challenges, outsourcing payroll services is the ideal solution.
By outsourcing your payroll to Premier TNC, you unlock numerous benefits that positively impact your business operations.
Our Payroll Services
- EPF (Employees’ Provident Fund) Account Application
- SOCSO (Social Security Organisation) Account Application
- EIS (Employment Insurance System) Account Application
- Work Permit Application for foreigner
- Monthly Payroll Processing
- Monthly Payslip and Payroll Report
- Submission of statutory payment (EPF, SOCSO, EIS, PCB)
- Preparation of Form E and Form EA
Employees Provident Fund (EPF)
As an employer, it is your duty to fulfill your responsibilities regarding the payment of EPF (Employees Provident Fund) contributions for individuals employed under a Contract of Service or Apprenticeship. It is crucial to ensure that the correct amount of monthly contributions is deducted from your employees’ salaries and promptly remitted to the EPF.
Employer must make monthly contribution payment on or before 15th of the month.
Social Security Organisation (SOCSO) – Employees’ Social Security Act 1969 (Act 4)
The Social Security Organisation (SOCSO) provides two social security schemes to protect the welfare of employees and their dependents under the Employees’ Social Security Act 1969 (Act 4).
Employer Eligibility
It is mandatory for any employer who engages one or more employees, as defined under the provisions of the Act, to register with SOCSO and fulfill their contribution obligations. This requirement ensures that employers take responsibility for the social security of their workforce.
Employee Eligibility
All individuals who are employed under a contract of service or apprenticeship within the private sector, including contractual or temporary staff of the Federal/State Government and Federal/State Statutory Bodies, are required to be registered and covered by SOCSO. This inclusive coverage ensures that employees across various sectors have access to the benefits provided by SOCSO.
Malaysia Payroll - Contributions
In Malaysia, contributions to SOCSO (Social Security Organisation) are mandatory for eligible employers and employees under the Act. These contributions fall into two categories:
First Category: This category includes the Employment Injury Insurance Scheme and Invalidity Pension Scheme. Both the employer and employee are required to make contribution payments. The contribution rates for this category are as follows: the employer’s share is 1.75% of the monthly wages, while the employee’s share is 0.5% of their monthly wages, according to the specified contribution schedule.
Second Category: Under this category, the contribution rate is 1.25% of the employees’ monthly wages, which is solely payable by the employer, as per the contribution schedule. It is important to note that all employees who have reached the age of 60 must be covered under this category for the Employment Injury Scheme only.
Social Security Organisation (SOCSO) – Employment Insurance System Act 2017 (Act 800)
The Employment Insurance System (EIS), which was introduced in January 2018 under the Employment Insurance System Act 2017 (Act 800), aims to offer prompt financial support to insured workers who have experienced job loss. Additionally, the system provides assistance in securing new employment opportunities and, if required, offers training programs to enhance employability.
Key Objectives of the EIS: The EIS is designed to achieve the following objectives:
- Immediate Financial Assistance: Contributing employees who have lost their jobs are eligible to receive immediate financial aid to help them navigate the transitional period until they secure new employment.
- Re-Employment Placement Program: Unemployed workers are provided with assistance in finding suitable job opportunities through the Re-Employment Placement Program. This program aids in connecting them with potential employers and facilitates their re-entry into the workforce.
- Vocational Training to Enhance Employability: The EIS also focuses on increasing the employability of unemployed workers by offering vocational training programs. These initiatives equip individuals with valuable skills and knowledge, enhancing their prospects for re-entering the job market successfully.
EIS Contribution Rates: Under the EIS, both employers and employees are required to contribute to the system. The contribution rates are as follows:
- Employer: 0.2% of the employee’s monthly wage.
- Employee: 0.2% of their monthly wage.
These contributions are vital in ensuring the sustainability of the EIS and enabling the provision of comprehensive support to workers who may face unexpected job loss.
Human Resources Development Fund (HRDF) – PSMB Act 2001
The PSMB Act 2001 is an essential legislation that establishes the framework for the imposition and collection of a Human Resources Development (HRD) levy. This levy is aimed at promoting the training and development of employees, apprentices, and trainees within various sectors. The Act also governs the establishment and administration of the Fund by the Corporation, overseeing its operations and related matters.
Sectors Covered under the PSMB Act 2001: The PSMB Act 2001 covers the following sectors:
- Manufacturing
- Services
- Mining and Quarrying
Under Section 13(1) of the PSMB Act 2001, it is mandatory for every employer falling under the Act’s coverage to register with the HRDF within the prescribed time and in the prescribed manner. This registration requirement ensures that employers are actively participating in the training and development initiatives facilitated by HRDF.
Eligibility criteria for Registration
Under the PSMB Act 2001, the eligibility criteria for registration with the Human Resources Development Fund (HRDF) depend on the number of Malaysian employees an employer has within the 63 sub-sectors covered by the Act. The criteria are divided into two categories:
- Mandatory Registration (1% Levy): Employers with 10 or more Malaysian employees fall under the mandatory registration category. They are required to register with the HRDF and contribute a levy equivalent to 1% of their monthly payroll.
- Voluntary Registration (0.5% Levy): Employers with 5 to 9 Malaysian employees have the option for voluntary registration with the HRDF. If they choose to register, they are required to contribute a levy equivalent to 0.5% of their monthly payroll.
It’s important to note that the registration and levy requirements are specific to the number of Malaysian employees within the covered sub-sectors. Employers falling within these criteria are encouraged to register with the HRDF to benefit from the training and development programs and initiatives supported by the Fund.
By participating in the HRDF registration and contributing the applicable levy, employers demonstrate their commitment to employee development and contribute to the overall enhancement of the workforce’s skills and competencies within their respective sectors.
Premia TNC has the optimal solutions for all your business needs.
Get in touch today for a FREE consultation.
No hidden costs, no obligations.
Feel free to drop us an email too!
[email protected]
Premia TNC has the optimal solutions for all your business needs.
Get in touch today for a FREE consultation.
No hidden costs, no obligations.
Feel free to drop us an email too!
[email protected]
