EIS Contribution Malaysia

The Employment Insurance System (EIS) in Malaysia was launched on January 1, 2018, under the Employment Insurance System Act 2017. It is administered by PERKESO (Social Security Organisation) and provides a safety net for employees who lose their jobs.

**Contribution Details:** - Employee rate: 0.2% of monthly wages - Employer rate: 0.2% of monthly wages - Total: 0.4% - Wage cap: RM4,000 (maximum total contribution: RM16/month) - Maximum employee contribution: RM8/month

EIS is deducted together with SOCSO contributions by the employer. Both are remitted to PERKESO by the 15th of the following month.

**Coverage and Eligibility:** EIS covers Malaysian citizens and permanent residents aged 18 to 60 who are employed and earning wages. Both the employee and employer must be registered with PERKESO.

**Benefits:** The main benefit is the Job Search Allowance, which provides financial assistance of up to 80% of average insurable wages for a specific period based on contribution months: - 6-12 months contributions: 3 months benefits - 13-24 months: 4 months benefits - 25-36 months: 5 months benefits - 37+ months: 6 months benefits

Additional benefits include Reduced Income Allowance (for those who take lower-paying jobs), Career counselling, and Training programmes to help retrenched workers find new employment.

EIS has proven particularly valuable during economic downturns. During the COVID-19 pandemic and subsequent economic challenges, EIS provided critical support to thousands of Malaysian workers who lost their jobs.

If you lose your job through retrenchment or company closure:

**Step 1:** Register with PERKESO within 30 days of your last working day. Bring your IC, termination letter, and last payslip.

**Step 2:** Submit the EIS claim form with your employment details, reason for job loss, and bank account information.

**Step 3:** Attend mandatory career counselling at PERKESO. This is a condition for receiving Job Search Allowance — you will get help with resume writing and job matching.

**Step 4:** Receive monthly Job Search Allowance at 80% of your average insurable wages, reducing by 10% each month (70%, 60%, etc.).

**Step 5:** Report re-employment immediately. Continued claiming while employed is an offence.

**Duration of benefits based on contribution months:** 6-12 months contributions = 3 months; 13-24 months = 4 months; 25-36 months = 5 months; 37+ months = 6 months. EIS benefits are taxable income and should be declared when filing your annual tax return with LHDN.

EIS contributions are 0.2% for both employee and employer, capped at RM4,000 wages:

| Monthly Salary | Employee EIS | Employer EIS | Total | |---|---|---|---| | RM2,000 | RM4.00 | RM4.00 | RM8.00 | | RM3,000 | RM6.00 | RM6.00 | RM12.00 | | RM4,000 | RM8.00 | RM8.00 | RM16.00 | | RM5,000+ | RM8.00 | RM8.00 | RM16.00 (capped) |

Despite the tiny cost, EIS provides substantial benefits. A RM3,000 earner contributing for 24 months pays only RM144 total, but could receive up to RM8,000 in Job Search Allowance (RM2,000 x 4 months). That is a 55x return on contribution.

**Q: Can I opt out?** No. EIS is mandatory for eligible Malaysian citizens and permanent residents aged 18-60.

**Q: Does voluntary resignation qualify?** Generally no. EIS covers involuntary job loss (retrenchment, redundancy, company closure). Constructive dismissal cases are evaluated individually.

**Q: Does it cover foreign workers?** No. EIS only covers Malaysian citizens and permanent residents.

**Q: Minimum contribution period to claim?** At least 6 months within the 12 months before job loss.

**Q: Does employer pay EIS for part-time workers?** Yes, if they earn RM30+ per month and meet other eligibility criteria.