Payroll Calculator Malaysia 2026

Employer Contribution Rates 2026

In Malaysia, hiring costs more than the agreed salary. Employers pay EPF, SOCSO, and EIS contributions on top of gross wages. These are the common 2026 employer rates for a Malaysian employee below 60.

As a planning rule, budget roughly 13% to 15% above gross salary for statutory contributions for most salary levels. For employee-side deductions and take-home pay, use the Salary Calculator Malaysia.

Payroll Calculation Formula in Malaysia

Malaysian payroll calculation runs in two directions at once. The employee's payslip starts from gross salary and subtracts deductions. The employer's budget starts from the same gross salary and adds contributions on top.

EPF is a percentage of wages (with KWSP Third Schedule wage bands for official payroll), SOCSO and EIS come from the PERKESO contribution schedule with a RM6,000 wage ceiling, and PCB/MTD follows LHDN's progressive tax formula based on the employee's estimated annual chargeable income. Wages for contribution purposes usually include basic salary and fixed allowances, while items like reimbursements may be treated differently.

For a deeper explanation of each deduction, read our guide to salary deductions in Malaysia or the EPF guide and PCB guide.

Payroll Cost Example: RM5,000 Salary

Here is the full monthly payroll picture for one Malaysian employee below 60 earning RM5,000, using 2026 rates.

Employer Payroll Cost Table 2026

Use this quick reference to budget hiring at common salary levels. The figures assume a Malaysian employee below 60 and include employer EPF, SOCSO (2026 schedule), and EIS.

The contribution percentage falls as salary rises because SOCSO and EIS are capped at the RM6,000 wage ceiling, and employer EPF drops from 13% to 12% above RM5,000. Annual cost is simply the monthly cost multiplied by 12, before bonus months — use the calculator's annual view and bonus planning with the Bonus Tax Calculator for a fuller yearly budget.

Payroll for Foreign Workers in Malaysia

Hiring non-Malaysian employees changes the statutory picture. The calculator above applies these rules when you select the non-citizen employee type.

Non-resident employees (fewer than 182 days in Malaysia in a year) are also taxed at a flat 30% PCB rate instead of progressive resident rates. Check the employee's tax residency before running payroll, and verify the latest PERKESO foreign worker rules before submission.

Monthly Payroll Deadlines in Malaysia

Calculating payroll is only half the job. Employers must also deduct, report, and pay contributions to the right agency on time each month.

For one-off payroll events, use the Bonus Tax Calculator for bonus months and the Unpaid Leave Calculator for salary deductions. For the full toolkit, see all calculators.