What Is Employment Insurance Scheme Malaysia?

The Employee Insurance Scheme (EIS), operated by the Social Security Organisation (SOCSO), aims to give temporary financial support to workers who have been laid off or have experienced some type of wage loss for up to six months.

This is something that the Malaysian government just started a few months ago, in October 2017. It’s a great effort for Malaysian employees, and given the country’s unemployment rate, it’s more vital than ever.

Do you have any idea where this money comes from? If you look at your paystubs more closely, you’ll find a little deduction for something called your Employee Insurance Scheme.

This is how it goes. Your company and you would each contribute 0.2 percent of your annual salary to the plan (total 0.4 percent monthly). Monthly contributions begin at 10 sen for those earning RM30 per month, with a maximum contribution of RM7.90 for those making RM4,000 or more.

Even if you earn RM20,000 per month, you will still contribute RM7.90 to the EIS. (If you include your employer’s payment, it comes to RM15.80.)

What is the employment insurance system?

PERKESO introduced the Employment Insurance System (EIS) for the first time in January 2018. It is a financial assistance program designed to assist individuals who have lost their jobs until they can find new work. The money will be put into a fund to help laid-off workers. It also seeks to provide expanded welfare coverage as well as career counseling and job-hunting assistance to help people find work.

1. Contributions from both the employer and the employee

Employers in the private sector must pay monthly contributions for each employee. Civil servants, domestic servants, and self-employed individuals are exempt. All Malaysian and permanent resident employees between the ages of 18 and 59 must contribute. Employees between the ages of 57 and 59 who have never contributed to EIS are not covered by this plan.

2. Rates of Contribution

EIS contributions are 0.2 percent of an employee’s pay (employer share) and 0.2 percent of an employee’s salary (employee share) (employee share). The highest monthly wage that is qualified is RM 4,000. For further details, please see the contribution table below:

3. Payment of the EIS

If this is your first time contributing EIS to your employees, you must first register with PERKESO – see this post for instructions. There are a few ways to pay; for a detailed explanation, read this assistance article.

Who is eligible for EIS?

EIS is available to Malaysian citizens and permanent residents who work in the private sector and are between the ages of 18 and 60.

Domestic workers, self-employed individuals, public servants, and employees of local governments and statutory bodies are all excluded from coverage.

Workers aged 57 and up who have never made contributions prior to that age are likewise exempt.

The easiest way to remember is that EIS comes into the same category as SOCSO in terms of contribution eligibility. This means that everybody who is entitled to give to SOCSO is also eligible to give to EIS.

I just got laid off. How can EIS help me?

We’re devastated to hear that. EIS serves as a silver lining in this situation. You should have been automatically registered in the EIS system if you have been making EIS donations on a monthly basis.

You can claim two sorts of benefits for up to six months now that you’ve lost your work: 1) monetary benefits and 2) job search support. Continue reading to learn more about each category.

EIS benefits – what are the job search assistance benefits?

Let’s go over the job search aid perks now that we’ve covered the monetary benefits. There are mostly two types:

EIS has just started a new Graduate Empowerment Program (GEP). Graduates in their final semester of studies are welcome to come.

Is there unemployment insurance in Malaysia?

Note from the editor: This article was initially published on June 4, 2020, however it has been modified and reprinted for the year 2021. The rates and data listed here are valid for 2021 and beyond, unless they are revised.

The coronavirus disease 2019 (COVID-19) was first found in Wuhan, China, in 2019 and has subsequently expanded worldwide.

Lockdown measures have been implemented all around the world as a result of the pandemic, hurting businesses and organizations. As millions of jobs are lost around the world, governments are taking steps to ensure that their citizens can still satisfy their basic needs. This covers things like job loss prevention, upskilling, and jobless assistance like unemployment insurance.

Malaysia braces for the recession

Did you know that Malaysia has its own distinct employment insurance system when it comes to government measures? Malaysia provides several sorts of unemployment relief to people who have lost their jobs, comparable to what nations like Finland and Switzerland do (i.e. unemployment allowance, housing allowance, and social assistance).

Most Malaysians are familiar with EPF, but what about EIS? Take a peek at your payslip if you haven’t already. The term “EIS” will appear, followed by a little deduction.

The Malaysian employment insurance system, also known as EIS / the EIS / EIS Perkeso, is represented by EIS / the EIS / EIS Perkeso.

What exactly is the EIS?

EIS / the EIS / EIS Perkeso is the abbreviation for the Employment Insurance Scheme, which is administered by the Social Security Organisation (SOCSO). Sistem Insurans Pekerjaan, or SIP, is the Malay name for it.

Is it compulsory to pay EIS?

  • Private-sector businesses are expected to make monthly contributions for each of their employees. (Exempted include government employees, domestic laborers, and the self-employed.)
  • A person who is engaged for wages under a contract of service or apprenticeship with an employer is referred to as an employee. The service or apprenticeship contract might be explicit or implied, and it can be oral or written.
  • Employees between the ages of 18 and 60 are expected to contribute. Employees aged 57 and up who have made no past payments before the age of 57, on the other hand, are exempt.

How do I claim employment insurance?

If you meet all of the requirements listed in the previous section, you can now begin claiming.

You can apply for EIS benefits either online using this link or in person at the PERKESO office. Remember to bring the following documents:

Here’s a step-by-step approach to claiming your JSA EIS benefit through SOSCO:

  • Register for an account on the EIS Portal and fill out your application with all of the required information.
  • Wait for the outcome of your application, which will be sent to you through email or through the Portal ID.

Please keep in mind that this is only for your first month’s allowance of 80%. To get the benefit for the next few months, you’ll need to show proof that you’re actively looking for work, as previously stated.

The allowance isn’t meant to be used for fun; it’s meant to assist you in getting back on your feet. In the meantime, keep seeking for work.

While we were unable to locate an official guide to the documents required for this, you can save job applications, interview appointments, emails, letters, and anything else that will demonstrate that you have been actively seeking employment. Make sure the dates are correct as well.

And, just in case… What if your EIS application is turned down? You simply need to get an appeal form from the PERKESO office and submit it to the Social Security Appellate Board.

Aside from the JSA, you may be eligible for other benefits such as the Training Fee (TF), Training Allowance (TA), and the Early Re-Employment Allowance (ERA), all of which we briefly addressed earlier.


Private-sector employers are expected to make monthly contributions on behalf of each employee. (Exempt are government employees, domestic laborers, and the self-employed.)

Employees between the ages of 18 and 60 are expected to contribute. Employees aged 57 and up who have made no past payments before the age of 57, on the other hand, are exempt.

Contribution Rates

The EIS contribution rate is set at 0.4 percent of the employee’s estimated monthly pay. The company will pay 0.2 percent, while the employee’s monthly paycheck will be withheld by 0.2 percent.

The Second Schedule sets out the contribution rates, which are subject to the rules set out in Section 18 of the Employment Insurance System Act 2017.

Employers in the private sector are obligated to contribute on behalf of each employee on a monthly basis. (Employees of the government, domestic laborers, and self-employed people are exempt.)

Eligibility To Claim Benefits

With the following exceptions, employees who have lost their jobs are eligible for the Employment Insurance System (EIS), which is a financial scheme intended at assisting individuals who have lost their jobs until they find new employment.

  • Termination of a service contract without cause based on an agreement between the Insured Person and his or her employer.

Penalty for Late payment / contribution

Interest on late contributions will be charged at a rate of 6% per year for each day that contributions are not paid within the specified time frame.

How is EIS contribution applicable on Deskera People?

With Deskera People, you can easily calculate the EIS contribution for employees using the procedures listed below.

  • Select the Employee and update the profile to enable EIS for employees, or click +Add Employee to activate it while building a new employee profile.

3. It will take you to the Employee Profile, where you will see an EIS Contribution toggle button under the Compliance Details Tab, where you can enable and disable the EIS applicability for the employee.

4. With the inbuilt EIS contribution rates incorporated in Deskera People, the employee and employer EIS computation is auto calculated after the EIS button is enabled.

Congratulations! You’ve figured out what EIS is, right? How does it apply to Deskera People?

When can I claim EIS?

When you file your tax return, you will usually seek EIS tax reduction. You’ll be prompted to provide some information that’s already on your EIS3 certificates.

These are certificates that you receive from each of the companies in which you invested, usually a few months after you made your investment. You will normally receive one EIS3 for each of the underlying firms if you invest in a fund.

If you invest in a “Approved EIS fund,” you will receive a single EIS5 certificate from the fund manager.

You’ll need the following information from both EIS3 and EIS5 certificates:

  • The date on which the shares were first issued (this is usually different from the date you invested)

Purpose of an EIS

An Environmental Impact Statement (EIS) is a document that describes the environmental consequences of planned activity. In this example, “environment” refers to both the natural and physical surroundings as well as people’s interactions with it. This means that the “environment” in an EIS comprises land, water, air, structures, living beings, site-specific environmental values, as well as social, cultural, and economic factors. An “impact” is a change in outcome that occurs as a result of an activity. Positive, negative, or mixed effects are possible. An EIS describes the effects of a project as well as strategies to “mitigate” them. To “mitigate” implies to reduce or eliminate unfavorable consequences.

As a result, an Environmental Impact Statement, or EIS, is a document that describes the effects of a proposed action on the environment. It also discusses the consequences of various solutions, as well as methods to alleviate those consequences.

EIS Requirements

Federal laws and regulations require the federal government to assess the environmental consequences of its actions and to consider alternative options. When an environmental impact statement (EIS) must be written, the National Environmental Policy Act of 1969 (NEPA) provides. NEPA requirements require federal agencies to include a description of a proposed action as well as a range of plausible alternatives in an EIS, among other things. The EIS must provide enough material for reviewers to assess the relative merits of each proposal. Environmental Impact Statements should follow the format and information suggested by the Council on Environmental Quality (CEQ).

When can I claim EIS relief?

The material has been updated to reflect the fact that you can claim Venture Capital Trust relief up to four years after the end of the tax year in which you made the investment.

If you invest through SITR and receive new shares or debt investments in a company in which you already have shares or debt investments, you cannot claim Income Tax Relief unless the shares or debt investments were issued to you when the company was formed or a compliance statement was submitted for them.

Investors can now put up to £2 million into the Enterprise Investment Scheme, as long as more than £1 million is put into knowledge-intensive businesses.

What is the difference between Socso and EIS?

According to Datuk Shamsudin Baradan, executive director of the Malaysian Employers Federation (MEF), roughly 30,700 individuals were laid off as of September 2017, as reported by TheSun Daily last month.

The government has introduced EIS to protect the interests of employees, following in the footsteps of countries such as South Korea and Canada, who have done so.

EIS is a job-loss insurance program that helps workers who have lost their jobs by providing temporary financial aid, among other things. Unemployed people will get a job search stipend for up to six months based on a scaled amount from SOCSO, however this will only begin in 2019.

Other services provided under EIS to aid the unemployed in finding work include career counseling, job matching and placements, and training programs.

The government has set aside RM136 million for employees to receive an interim benefit in 2018, in the form of a cash allowance of RM600 per month for a maximum of three months, according to reports.