EPF, SOCSO, EIS and PCB: What a New Malaysian Employer Must File

What do you have to file after hiring your first employee in Malaysia?

Four separate monthly payments start the moment someone goes on payroll: EPF (retirement savings), SOCSO (injury cover), EIS (unemployment insurance) and PCB (income tax deducted from the employee's salary and paid to LHDN). Most of these fall due by the 15th of the following month. On top of the monthly cycle, two forms close out the year: an EA form for each employee, and one Form E for the company. None of this depends on how many people you hire. A company of one employee already carries all four.

EPF, SOCSO, EIS and PCB — what each one actually is

It helps to stop treating these as one blur called "statutory stuff" and separate what each payment is actually for.

• EPF — retirement savings. Both the employee and the employer contribute; the money is the employee's, held for them.
• SOCSO — injury and invalidity cover. A shared contribution, and a smaller one than EPF.
• EIS — unemployment insurance. Shared again, and smaller still than SOCSO.
• PCB — the employee's own income tax, deducted from salary each month and paid across to LHDN. This one isn't the company's money at any point; it's the employee's tax, moving through the employer's hands.

A payslip has to go out to each employee every month regardless of which of these apply to them.

When are EPF, SOCSO, EIS and PCB actually due?

Most of the four fall due by the 15th of the month following the one the salary was paid for. That's the date that catches new employers out. The wage bill for a given month isn't actually settled until the middle of the next one, so it's easy to treat payroll as "done" the day salaries go out, then miss the filing that comes after it. Whoever runs payroll for you — in-house, an accountant, or a payroll firm — the 15th is the date to build the process around, not payday.

What has to be filed once a year?

Two things, and only two: an EA form for every employee, showing what they were paid and what was deducted for the year, and one Form E for the company as a whole, summarising the same information in aggregate. Both close out the tax year and both depend on the twelve months of PCB and payroll records behind them having actually been correct — which is the practical reason to get the monthly filing right the first time rather than reconstruct it in December.

Is a director personally liable if a contribution is filed late?

Yes. Company directors can be held personally liable for unpaid EPF contributions, and that liability doesn't shift depending on who actually runs the payroll. Handing payroll to an accountant, a bureau, or a piece of software doesn't move the liability off the director's desk. It only moves the typing. That's the detail people miss when they're comparing payroll providers on price: the provider does the calculation and the filing, but if it's wrong or late, the exposure is still the director's, not the provider's.

That's also true of outsourced payroll services generally, OCTIS's included — the work can be handed over, but the underlying duty to have paid correctly and on time stays with the company and its directors. What outsourcing actually buys is someone who calculates the four payments and the two annual forms correctly and on schedule, not a transfer of who is on the hook if something slips.

What is the HRD Corp training levy, and does it apply to a small company?

Separately from EPF, SOCSO, EIS and PCB, there's a fifth mechanism worth knowing about: the HRD Corp training levy. By law, 1% of the monthly wage bill is set aside for it automatically once it applies. It isn't a tax in the sense that the money disappears — it comes back to the company, but only if it's actually claimed against staff training. Left unclaimed, it lapses.

The levy isn't universal from day one. It becomes compulsory once a company passes ten Malaysian employees, and it's borne by the employer, not deducted from the employee's pay the way PCB is. A company under that headcount can still register voluntarily, but it isn't required to. Either way, the levy is only worth something if someone is actually watching the balance against the training being booked — a payroll run on its own has no reason to look at it, because training isn't a payroll function.

Hiring in Malaysia without a Malaysian entity: what changes

Not every company hiring in Malaysia has a Malaysian entity yet, and setting one up isn't always the first available step — incorporation, a bank account and the internal registrations take time a hire often can't wait for. An Employer of Record (EOR) arrangement is the alternative: an EOR becomes the legal employer of the person in Malaysia, on paper, while the company that actually found them keeps directing their day-to-day work.

Under an EOR, the statutory load doesn't change — EPF, SOCSO and EIS contributions and Employment Act 1955 compliance still apply, at a combined rate of roughly 14–16% on top of salary, fixed by law regardless of which entity is named as the employer. What changes is who is responsible for calculating and filing it while the company has no local entity of its own. OCTIS runs an EOR service on this basis, and a company that later incorporates its own Malaysian entity can move the same team, with payroll history and leave balances, across rather than restarting the employment relationship.

One thing worth checking before comparing EOR providers: some global EOR platforms hold a deposit before that person's first day, sized against the employee's full monthly cost, on top of the ongoing monthly fee. It's a normal part of how those platforms are structured, but it's the kind of cost that's easy to miss if a quote only quotes the monthly rate.

Hiring a foreign national is a separate question from the statutory contributions above — it runs through the Employment Pass route, and that approval is subject to salary thresholds and immigration approval that isn't automatic, whichever entity or EOR is the employer of record.

Getting the monthly filing done

None of the four monthly payments or the two annual forms are optional once someone is on payroll, and none of them get lighter with a smaller headcount — a company of one employee files EPF, SOCSO, EIS and PCB exactly the same as a company of fifty, just with smaller numbers. OCTIS runs payroll for Malaysian companies, either with the company's own team keying the deductions or with a licensed accountant filing it directly, and runs Employer of Record hiring for companies that need someone on the ground in Malaysia before their own entity is ready. Either way, the starting point is the same: the role, the salary, and the date the person starts.