Employer of record in Malaysia: costs and rules
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A Malaysian employee on MYR 168,000 a year costs the employer 12.84% on top of salary, and most of it is the 12% EPF retirement contribution, according to KWSP and PERKESO, with the SOCSO and EIS percentages from Deloitte's 2026 guide (a secondary source); an EOR then bills $199 (Payoneer Workforce Management, formerly Skuad) to $699 (Oyster) per worker per month at October 2026 list prices. The rate US employers most often get wrong is EPF itself: it is 13% on wages up to RM5,000, 12% above that, 4% for Malaysians aged 60 or over, and only 2% for non-Malaysian workers from October 2025 wages.
An employer of record in Malaysia is a Malaysian company that employs your hire on its payroll, registers them with EPF and PERKESO, pays the employer contributions and handles Employment Act duties, while you direct their work.
- Employer cost on a sample salary
- 12.84% (MYR 1,797/mo = EPF…on top of gross pay
- Minimum annual leave
- 8 days per 12 months of…
- Public holidays
- 11 paid gazetted public…
- Currency
- MYR
On this page
Malaysia's rules, line by line
Three funds take employer contributions, and each has its own base.
- EPF (KWSP) has no wage ceiling. The total is rounded up to the next ringgit. Non-Malaysian workers registered from August 1, 1998 pay 2% each side from October 2025 wages.
- SOCSO at 1.75% is charged on wages up to RM6,000 a month; PERKESO raised that ceiling from RM5,000 on October 1, 2024. EIS at 0.2% is shown here on the same RM6,000 ceiling, but we could not confirm the EIS ceiling on the PERKESO page, and Deloitte's 2026 guide shows MYR 4,000. At MYR 4,000 the EIS line is MYR 8 a month instead of MYR 12, and the total is MYR 1,793 (12.81%).
- Annual leave (Employment Act s.60E): 8 days under 2 years of service, 12 days from 2 to 5 years, 16 days after 5.
- Public holidays (s.60D): 11 paid gazetted holidays, 5 of them named in the Act, plus any day declared under the Holidays Act 1951.
- Probation is not regulated by the Employment Act, and probationers cannot be dismissed without just cause.
Malaysia also has an HRD Corp training levy for some employers. We have not confirmed its rate from an official source, so it is not in our figures, and we have not confirmed the 2026 minimum wage or standard working week either.
Employment costs and rules in Malaysia
| Item | Malaysia |
|---|---|
| Employer social contributions | About 12.8% to 14.8% at a mid-level salary (EPF 12% or 13% + SOCSO 1.75% + EIS 0.2%, each on capped wages for SOCSO/EIS) plus HRD levy 1% for employers with 10+ staff |
| What the employer pays | EPF employer 13% (wages up to RM5,000) or 12% (above RM5,000), Malaysians under 60; 4% for Malaysians 60+; non-Malaysians registered from Aug 1, 1998: 2% employer and 2% employee (from Oct 2025 wages); SOCSO employer 1.75% (secondary), wage ceiling RM6,000/mo; EIS employer 0.2% (secondary), ceiling RM6,000 (unconfirmed for EIS on PERKESO page; Deloitte says RM4,000); HRD Corp levy 1% of wages (unconfirmed) |
| Caps and ceilings | SOCSO contribution wage ceiling RM6,000/mo from Oct 1, 2024 (was RM5,000). No EPF ceiling. EPF total rounded up to the next ringgit |
| Employee contributions | About 11.7% (EPF 11% + SOCSO 0.5% (unconfirmed) + EIS 0.2%), SOCSO and EIS on capped wages |
| Mandatory bonuses | None by statute |
| Annual leave | 8 days per 12 months of continuous service (under 2 years), 12 days (2 to under 5 years), 16 days (5+ years) (Employment Act s.60E) |
| Public holidays | 11 paid gazetted public holidays, 5 of them specified by statute, plus any day declared under s.8 of the Holidays Act 1951 (Employment Act s.60D) |
| Probation | No statutory maximum; the Employment Act 1955 does not regulate probation. Probationers cannot be dismissed without just cause |
| Notice period | Where the contract has no written notice term: 4 weeks (under 2 years), 6 weeks (2 to under 5 years), 8 weeks (5+ years) (Employment Act s.12(2)) |
| Severance | Termination and lay-off benefits after 12 months' continuous service: 10 days' wages per year (under 2 years), 15 days (2 to under 5 years), 20 days (5+ years), pro rata for part years (Employment (Termination and Lay-Off Benefits) Regulations 1980, reg. 6) |
| Payroll frequency | Monthly |
| Sample salary used | MYR 168,000 per year (MYR 14,000/mo), about USD 40,000 at an assumed 4.20 MYR/USD (rate not fetched) |
| Employer cost on that salary | 12.84% (MYR 1,797/mo = EPF 12% x 14,000 = 1,680 + SOCSO 1.75% x 6,000 = 105 + EIS 0.2% x 6,000 = 12); 13.84% (MYR 1,937) if the 1% HRD Corp levy applies, rate not verified |
Checked October 16, 2026. Source type: official (KWSP, PERKESO) for EPF rates and SOCSO ceiling; secondary (Deloitte) for SOCSO and EIS percentages. Sources are listed at the end of this page.
What an EOR charges to employ someone in Malaysia
| Provider | EOR fee per employee per month | Deposit | Entity model (provider claim) |
|---|---|---|---|
| Payoneer Workforce Management | from $199 | None listed | Claims owned entities across APAC, MEA, Europe and the Americas |
| Pebl | $399 | Not listed | About 90% of employees on Pebl-owned entities |
| Playroll | from $399 | One month's salary per employee, refundable | No clear owned-entity claim |
| Rivermate | $319 to $639 | Not stated | Claims 38 owned entities |
| Multiplier | $459 (annual) or $499 (monthly) | Sized from costs, fees and notice period (method published, no fixed amount) | Claims owned entities in 160+ countries |
| Rippling EOR | Quote only (third-party reference: $499) | Not listed | Claims Rippling entities; no partner mention |
| Deel | $599 | Not stated by Deel | Claims owned entities in 130+ countries |
| Remote | from $599 | Waived for startups; otherwise not stated | Claims 100% owned entities in 90+ countries |
| Atlas | from $599 | Not published | Claims owned entities in 160+ countries |
| Papaya Global | from $650 | Refundable deposit, amount not stated | Uses in-country partners |
| Oyster | $699 | At least one month of total service cost, refundable (per its terms) | Owned entities and partners |
| Globalization Partners (G-P) | Quote only | Not stated | Information page claims 100+ wholly owned entities |
Source: each provider’s pricing page, checked October 16, 2026. Fees are the provider’s charge on top of salary and the employer contributions above. Some providers adjust prices by country.
A MYR 14,000 a month employee, fully costed
MYR 168,000 a year is about USD 40,000 at an assumed rate of 4.20 ringgit per dollar, which we did not confirm, so the fee below stays in dollars.
| Line | Per month | Per year |
|---|---|---|
| Gross salary | MYR 14,000.00 | MYR 168,000.00 |
| EPF employer, 12% (pay above RM5,000) | MYR 1,680.00 | MYR 20,160.00 |
| SOCSO employer, 1.75% of the RM6,000 ceiling | MYR 105.00 | MYR 1,260.00 |
| EIS employer, 0.2% of the RM6,000 ceiling | MYR 12.00 | MYR 144.00 |
| Employer contributions (12.84%) | MYR 1,797.00 | MYR 21,564.00 |
| Employer cost before the EOR fee | MYR 15,797.00 | MYR 189,564.00 |
| EOR fee at $599 a month (USD) | $599 | $7,188 |
Source: KWSP mandatory contribution rates; PERKESO contribution ceiling (RM6,000 from Oct 1, 2024); SOCSO and EIS percentages from Deloitte Malaysia Highlights 2026. The $599 monthly fee, as listed by Deel and Remote on Oct 16, 2026, is kept in USD because we did not confirm a ringgit rate. Checked Oct 2026.
The math: 12% x 14,000 = 1,680; 1.75% x 6,000 = 105; 0.2% x 6,000 = 12. That is MYR 1,797 a month, 12.84% of pay, or MYR 21,564 a year. If the 1% HRD Corp levy applies (it covers some employers only, and we have not confirmed its rate), add MYR 140 a month for MYR 1,937, or 13.84%. Add the fee: $7,188 a year at $599, $2,388 at $199, $4,788 at $399, $8,388 at $699. If the same role went to a non-Malaysian worker, EPF would be 2% (MYR 280 a month) instead of MYR 1,680. Compare more cases in the international cost calculator.
Ending employment in Malaysia
If the contract has no written notice term, the Employment Act (s.12(2)) sets 4 weeks under 2 years of service, 6 weeks from 2 to 5 years and 8 weeks after 5. Termination and lay-off benefits apply after 12 months of continuous service: 10 days' wages for each year under 2 years, 15 days from 2 to 5 years, and 20 days after 5, pro rata for part years (1980 Regulations, reg. 6). An employee let go after 3 years is owed 45 days' wages. Ask how your EOR funds this, and whether its deposit covers it.
Own Malaysian company or EOR
A Sdn Bhd of your own needs EPF, PERKESO and tax registrations, a payroll provider and a company secretary. For a small team the EOR fee is usually simpler. Our EOR versus entity analysis shows where the line falls.
Malaysian freelancers and misclassification
Paying a contractor skips EPF, SOCSO and EIS. If the person works set hours under your direction for one client, that saving can turn into back contributions plus Employment Act claims. Use a contractor management platform for true project work, or a contractor of record.
Which EOR to pick for Malaysia
Malaysian quotes differ more on statutory lines than on the fee. Ask which EPF rate the provider will apply, since nationality and pay change it, and whether its calculator uses the RM6,000 SOCSO and EIS ceiling. Playroll bills statutory and country charges separately from its $399 fee. On our scores, Multiplier ranks first at 79 out of 100 and Oyster second at 64 (scoring explained).
See every provider in the EOR rankings, our reviews of Deel, Remote and Oyster, and Malaysia's place in the cost index.
Frequently asked questions
What does an employer of record in Malaysia cost?
What is the EPF employer rate in Malaysia?
What is the SOCSO and EIS wage ceiling?
How much annual leave does Malaysian law require?
What termination benefits apply in Malaysia?
Sources (13)
- Department of Labor Peninsular Malaysia (JTKSM): Employment Act 1955 (Act 265), updated English text (checked Oct 16, 2026)
- Department of Labor Peninsular Malaysia (JTKSM): Employment (Termination and Lay-Off Benefits) Regulations 1980 (checked Oct 16, 2026)
- Pebl: Pebl EOR pricing (checked Oct 16, 2026)
- Playroll: Playroll pricing (checked Oct 16, 2026)
- Multiplier: Multiplier pricing (checked Oct 16, 2026)
- Deel: Deel pricing (checked Oct 16, 2026)
- Remote: Remote pricing (checked Oct 16, 2026)
- Oyster: Oyster pricing (checked Oct 16, 2026)
- Payoneer Workforce Management (formerly Skuad): Skuad pricing (checked Oct 16, 2026)
- KWSP (EPF): Mandatory contribution (checked Oct 16, 2026)
- PERKESO (SOCSO): Rate of contribution (checked Oct 16, 2026)
- Deloitte: Malaysia Highlights 2026 (secondary) (checked Oct 16, 2026)
- eplex.ilo.org/en/country-detail?code=MYS&yr=2026 (checked October 16, 2026)
This page is general information, not tax, legal or accounting advice. Rules and rates change, so check the official source linked above before you file or sign a contract. Read our disclaimer.