Understanding Your Malaysian Payslip

Your first Malaysian payslip can be a shock: the amount that lands in your bank account is noticeably smaller than the salary in your offer letter. The gap is not a mistake - it is four statutory deductions, each going somewhere useful. Here is what every line means.

Gross pay vs net pay

Gross pay is your contracted salary plus any allowances, overtime, commission and bonus for the month. Net pay - gaji bersih - is what remains after deductions. In a typical private-sector job, expect net pay to be roughly 85-90% of gross.

EPF (KWSP) - 11%

The biggest deduction is your retirement saving: 11% of wages goes into your EPF account. Your employer adds another 13% (12% for wages above RM5,000) on top - money that never appears as a deduction because it is paid over and above your salary. EPF is your money: it earns a yearly dividend (6.30% for 2024) and follows you between jobs. Our EPF guide explains how the accounts work.

SOCSO (PERKESO) - about 0.5%

SOCSO insures you against workplace injuries and invalidity - covering medical care, disability pensions and survivors' benefits for your dependants. The employee share is roughly 0.5% of wages under an official banded table, and contributions are capped at a wage ceiling of RM6,000 - so the deduction never exceeds about RM30 a month no matter how much you earn. Your employer pays about 1.75% more on your behalf.

EIS (SIP) - 0.2%

The Employment Insurance System is unemployment insurance: lose your job and it pays a shrinking percentage of your former salary for up to six months while you search, plus job-matching and re-training support. You and your employer each contribute 0.2%, capped at the same RM6,000 ceiling - at most about RM12 a month from you.

PCB / MTD - your monthly income tax

PCB (Potongan Cukai Bulanan, or Monthly Tax Deduction) is income tax deducted at source, calculated from LHDN's formula using your salary, marital status and number of children. Two things trip people up. First, PCB only starts once your pay is high enough - very roughly RM3,000 a month for a single person - so junior employees may see no PCB line at all. Second, PCB is a prepayment, not your final tax: it assumes standard reliefs only. When you file your return the following year and claim lifestyle, medical or other reliefs, any overpayment comes back as a refund. Our filing guide walks through that.

A worked example: RM4,000 gross

For a single employee earning RM4,000 a month, the payslip looks roughly like this (SOCSO and EIS use banded tables, so figures are rounded):

Meanwhile your employer is paying about RM520 of EPF, RM69 of SOCSO and RM8 of EIS on top of your salary - the true cost of employing you is closer to RM4,600 a month.

Check your payslip once a year

Payroll mistakes happen. Once a year - or whenever your salary changes - check that EPF is 11% of your wages, confirm the money actually reached your account via KWSP i-Akaun, and make sure the SOCSO and EIS lines are present (they are compulsory for employees in Malaysia, whatever a contract says). If PCB looks too high, submit Form TP1 to your employer to register your reliefs.

To see your own numbers at any salary, run it through our take-home salary calculator - it breaks down every deduction above instantly.