How Salary Increment Affects EPF, SOCSO, EIS and PCB
In Malaysia, a salary increment usually increases your gross monthly salary first. Your actual net salary may increase by a smaller amount because employee EPF, SOCSO, EIS and PCB/MTD can also change after the increment.
This is why two employees with the same RM500 salary increment may receive different take-home increases. The final net result depends on salary level, tax residency, EPF rate, age group, marital status, children, reliefs, and other payroll settings.
Payroll Item What May Change After Increment Employee Impact
EPF / KWSP Employee EPF is usually calculated from monthly wages. Higher retirement saving, lower cash take-home
SOCSO / PERKESO Contribution may change based on the salary schedule and wage ceiling. Small deduction change for some salaries
EIS / SIP EIS may increase when assumed monthly salary increases. Usually a small monthly change
PCB / MTD Monthly tax deduction may increase when estimated annual taxable income increases. Can reduce the net value of the raise