EIS Contribution Table in Malaysia

Employment Insurance System (EIS) is an employment help scheme or enhancement of the retrenched worker rehiring assistance scheme comprised of the Malaysia social security system whenever unemployment occurs. The SOCSO-managed EIS contributions allow workers to make provisions for themselves during unemployment so that basic needs are met while job hunting. This article will give you an understanding of EIS and how much the contribution rate in Malaysia. 

What is the EIS?

Sistem Insurans Pekerjaan or EIS was created in 2018 in Malaysia and the System Employment Insurance Act 2017. The scheme was aimed at providing relief to the people who have been laid off from their jobs. The system also offers re-employment assistance such as job search allowances, training, and career counselling to help individuals return to the workforce.

Who Should Contribute to EIS?

1. Private-sector employers in Malaysia.
2. Malaysian employees aged 18 to 60 (under normal employment).

Who Is Exempt from EIS?

1. Employees aged 60 and above (Malaysian or permanent residents).
2. Employees aged between 57 and 59 who have never contributed to the EIS before.
3. Foreign workers (all foreign employees).
4. Government employees.
5. Domestic workers (e.g., maids, live-in caregivers).
6. Self-employed individuals.

Both employers and employees share the responsibility of contributing to the EIS, which is deducted automatically from monthly wages.

How Does the EIS Contribution Work?

EIS contributions are based on a percentage of the employee's salary, with both the employer and employee making equal contributions. The rate is 0.2% from the employer and 0.2% from the employee, bringing the total contribution to 0.4% of the employee's salary.

For instance, if an employee earns RM3,000 a month, the employer and employee will each contribute 0.2%, amounting to RM6. Together, they contribute RM12 per month towards the EIS fund. The total contribution is capped, and higher earners will not have to pay beyond a certain amount, ensuring fairness across various income levels.

EIS Contribution Table 

Both Contribution Rates are Calculated at ~0.2% of the Employee’s Salary

Why is the EIS Contribution Important?

The EIS contribution is more than just a legal requirement; it is a vital support system for employees who may face unexpected unemployment. It provides a financial cushion during the job-seeking period, which can be crucial in covering living expenses such as rent, food, and transportation.

For employers, EIS serves as a tool to ensure their employees’ well-being, even in difficult times. When employees know they are protected by EIS, they may feel more secure in their roles, potentially improving overall workplace morale and productivity.

Understanding the EIS contribution system is essential for both employers and employees in Malaysia. It provides a safety net for workers facing unemployment and ensures financial stability during difficult times. By contributing to EIS, employers are fulfilling their legal obligations and helping to create a more secure and productive workforce, while employees can have peace of mind knowing they are protected if they lose their job.

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