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EIS Management in Malaysia: Claims, LOE & Act 800 Guide

By Worksy in November 7, 2025 – Reading time 12 minute
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EIS Management in Malaysia: Claims, LOE & Act 800 Guide

Mastering EIS Management in Malaysia: Complete Guide to Contributions, Claims, and LOE Benefits

Proper EIS management is essential for Malaysian employers maintaining statutory payroll compliance and for employees facing unexpected career disruptions. The Employment Insurance System (EIS), administered by SOCSO (PERKESO) under the Employment Insurance System and Employment Services Act 2017 [Act 800], provides benefits and re-employment support for Insured Persons who experience a Loss of Employment (LOE) within the meaning of Act 800.

Both employers and employees must understand their legal rights and obligations under Act 800. This comprehensive guide details statutory coverage, qualifying conditions, benefit calculations, online claim workflows, and payroll contribution rules.

What is the Employment Insurance System (EIS) in Malaysia?

The Employment Insurance System is a statutory social safety net established under the Employment Insurance System and Employment Services Act 2017 [Act 800]. The scheme is financed through joint monthly contributions from employers and employees into the Employment Insurance Fund.

Key Functions and Support Under Act 800

The framework established by Act 800 provides several forms of financial and re-employment support, including:

  • Income Replacement: Providing temporary financial assistance through tiered monthly allowances to sustain insured persons while actively seeking new employment.
  • Active Labour Market Support: Delivering structured re-employment services, including job matching, vocational counseling, and placement assistance through PERKESO.
  • Vocational Training: Supporting skills enhancement through approved training courses to improve employability in the workforce.

Coverage and Contributions Qualifying Conditions (CQC)

Coverage under Act 800 applies to eligible employees employed under a contract of service or apprenticeship in industries to which the Act applies, subject to the exclusions in the First Schedule. Following the Employment Insurance System (Amendment of First Schedule) Order 2021 [P.U. (A) 249/2021], domestic workers are no longer generally excluded. PERKESO currently extends Act 800 coverage to local domestic workers who are Malaysian citizens, Permanent Residents or temporary residents, while foreign domestic workers are not covered under Act 800.

Dimension Statutory Scope Under Act 800
Covered Persons Employees who have attained the age of 18 but have not attained the age of 60, subject to the additional exclusion applicable to employees who have attained 57 and for whom no contributions were payable before age 57.
Key Excluded Categories Key statutory exclusions include persons specified in the First Schedule, including members of the public service of the Federation and States, employees of local authorities or statutory bodies, persons below 18 or who have attained 60, and certain foreign employees. Self-employed persons generally fall outside the employee coverage framework of Act 800.

To qualify for Job Search Allowance (JSA) or Reduced Income Allowance (RIA), an Insured Person must satisfy the statutory Contributions Qualifying Conditions (CQC) under the Fourth Schedule to Act 800 based on their contribution history.

First Claim CQC:

Monthly Contributions Eligibility Period JSA/RIA Payment Period
12 to 15 months 24 consecutive months immediately preceding LOE, including the month in which LOE occurs 3 months
16 to 19 months 24 consecutive months immediately preceding LOE, including the month in which LOE occurs 4 months
20 to 23 months 24 consecutive months immediately preceding LOE, including the month in which LOE occurs 5 months
24 months 24 consecutive months immediately preceding LOE, including the month in which LOE occurs 6 months

Note: The required number of monthly contributions need not be made in consecutive months, provided the applicable number of contributions falls within the statutory eligibility period. Second and subsequent LOE claims use different contribution thresholds and eligibility periods specified in the Fourth Schedule.

Understanding Loss of Employment (LOE) Under Act 800

Financial benefits under the EIS depend strictly on establishing a valid statutory Loss of Employment (LOE) as recognized by PERKESO for the purposes of Section 30 of Act 800.

Statutory Qualifying Scenarios for Loss of Employment

The Act expressly distinguishes qualifying LOE circumstances, which include:

  • Normal retrenchment and redundancy.
  • Section 30(2)(a) expressly recognises resignation under a voluntary separation scheme by mutual consent. PERKESO’s current EIS guidance also lists VSS/MSS as qualifying LOE circumstances.
  • Bankruptcy or closure of the business.
  • Resignation tantamount to constructive dismissal in Malaysia or resignation due to wilful breach of the terms and conditions of the contract of service by the employer. Any question or dispute as to whether a Loss of Employment has occurred is determined by PERKESO under section 31 of Act 800.
  • Resignation due to any threat to the Insured Person or the Insured Person’s family, or sexual harassment towards the Insured Person.
  • Resignation due to an employer’s command to perform work outside the scope of work which endangers the health and safety of the Insured Person.
  • Resignation because the workplace is closed/not operating due to natural disaster, riot, civil commotion, demonstration or other similar situation, or becomes unsafe due to fire, gas leak or other similar dangerous situation.

Non-Qualifying Circumstances and Statutory Exclusions

The following circumstances are not regarded as a Loss of Employment for the purposes of section 30 of Act 800:

Separation Category Reason for Exclusion under Section 30
Voluntary Resignation Voluntary resignation, subject to the exceptions in section 30(2) (such as threats/harassment).
Contract Expiry Expiry of the Insured Person’s contract of service.
Mutual Consent Termination of the contract of service by mutual consent without terms and conditions.
Work Completion Completion of the work in accordance with the terms of the contract of service.
Retirement Retirement of the Insured Person.
Misconduct Termination of the contract of service due to misconduct.

Statutory Financial Benefits and LOE Allowances

Where PERKESO approves a claim, the Insured Person may be entitled to the applicable EIS benefits, subject to the relevant statutory eligibility requirements and Contributions Qualifying Conditions.

Statutory Updates Effective 1 October 2026 [Act A1796]

The Employment Insurance System (Amendment) Act 2026 [Act A1796] was gazetted on 15 September 2026. Under P.U. (B) 391/2026, the Act came into operation on 1 October 2026, except section 11, which comes into operation on 2 January 2027. These amendments introduce significant enhancements to financial assistance for qualifying claims.

Transitional rule: Under section 17(2) of Act A1796, any approval, decision or other act granted, made or done before 1 October 2026 continues in force in relation to the person concerned as if Act 800 had not been amended by A1796. Separately, section 17(3) provides that where a claim for benefits under section 27 was still pending before PERKESO on 1 October 2026, the provisions of Act 800 relating to benefit claims as amended by A1796 apply to that claim. PERKESO’s current public guidance separately states that the enhanced ERA, Training Allowance and Training Fee rates apply to Loss of Employment from 1 October 2026.

Job Search Allowance (JSA) Calculation and Payout Schedule

The applicable assumed monthly wages are determined under paragraphs 6 to 8 of the Third Schedule using the prescribed assumed monthly wage corresponding to each month for which contributions were paid or payable within the six consecutive months immediately preceding the month in which the LOE occurred, subject to the specific rules in paragraph 7.

Under the statutory contribution wage ceiling of RM6,000 (introduced by the 2024 amendment), the maximum corresponding assumed monthly wage is RM5,950 (for monthly wages exceeding RM5,900).

Benefit Month Statutory Payout Rate Maximum Monthly JSA (Assumed Wage: RM5,950)
Month 1 80% RM4,760.00
Month 2 50% RM2,975.00
Month 3 40% RM2,380.00
Month 4 40% RM2,380.00
Month 5 30% RM1,785.00
Month 6 30% RM1,785.00

Additional Statutory Allowances and Benefits

Act 800 provides several additional financial support mechanisms:

  • Early Re-employment Allowance (ERA): A lump-sum incentive payable under section 35. For purposes of Act 800, the “waiting period” means the period beginning on the date a claim for benefits under section 27 is submitted and ending on the date the claim is approved under section 33. Where an Insured Person accepts an offer of employment and reports for duty within the waiting period, the ERA is 50% of the total JSA entitlement. In the other circumstances specified in section 35, where reporting for duty occurs during the period of receiving JSA, the ERA is 50% of the remaining unpaid JSA balance. PERKESO’s current public guidance states that the enhanced rate applies to Loss of Employment from 1 October 2026.
  • Reduced Income Allowance (RIA): Applicable to an Insured Person holding multiple employments who loses one or more, but not all, of those employments. If an employee loses all employments simultaneously, they may qualify for both JSA and RIA.
  • Training Allowance (TA): For eligible claims relating to a Loss of Employment from 1 October 2026, Training Allowance is payable at RM30 per day, subject to section 37 and the applicable training requirements. PERKESO states that recipients must attend the required training sessions to qualify for payment.
  • Training Fee (TF): For eligible claims relating to a Loss of Employment from 1 October 2026, training fees of up to RM7,000 may be borne by PERKESO and paid to the approved training provider, subject to section 37 and applicable requirements.
  • Mobility Assistance Allowance: A one-off RM1,000 benefit introduced under section 37A for an eligible Insured Person whose claim has been approved and who accepts a new offer of employment. The Insured Person must report for duty within a period not exceeding 12 months after receiving the last JSA, or within 12 months after receiving the ERA, as applicable, and must satisfy the manner, terms and conditions determined by PERKESO. PERKESO’s current operational guidance applies a 100 km distance threshold between the Insured Person’s residence and the new workplace. As of October 2026, PERKESO’s English guidance states “more than 100 km”, while its Bahasa Malaysia guidance states “100 km or more”. Applicants whose distance is exactly 100 km should confirm eligibility directly with PERKESO.
  • Payment of Benefits to Dependants: Under section 39 of Act 800, if an Insured Person dies, is in a coma or is of unsound mind after making a claim for benefits, or while entitled to or receiving JSA, ERA, RIA or Training Allowance, the applicable benefit may be paid to the Insured Person’s dependant(s) in the manner determined by PERKESO.

Step-by-Step Guide: How to Submit an EIS Application Online

Claimants must submit their application promptly and furnish all required supporting documents through the PERKESO online system.

Required Supporting Documentation Checklist

Prepare clear digital copies of the following documents before starting your online submission:

  • National Registration Identity Card (NRIC / MyKad).
  • Proof of Loss of Employment (such as a formal end-of-employment letter, redundancy notice, or VSS/MSS agreement).
  • Salary payslips for the 6 consecutive months before the Loss of Employment.
  • Personal bank account information for electronic fund disbursement.
  • Copy of the employment letter or contract of service, covering the employment period as required by PERKESO.
  • Additional supporting documents may be required depending on the circumstances of the LOE, such as a police report for sexual harassment or threats, proof of an instruction to perform dangerous work outside the job scope, or other documents relevant to the case.

Online Submission Workflow via the PERKESO Portal

  1. Observe the Statutory 60-Day Deadline: Under section 28, an Insured Person who considers that they have lost employment must submit the claim within 60 days from the date they consider the LOE occurred. PERKESO determines the LOE date under section 29; where the claim is made after 60 days from that determined date, section 29(2) requires the claim to be rejected.
  2. Access the Portal: Log in to the official PERKESO Portal (or EIS portal) and navigate to the EIS Claim module.
  3. Complete Claim Details: Enter your personal information, employment history, last drawn salary details, and the relevant LOE reason.
  4. Upload Supporting Documents: Upload digital copies of your required documentation.
  5. Submit and Retain Receipt: Submit your declaration and download your official acknowledgement receipt.

Re-Employment Programme Requirements

Applicants are required to comply with PERKESO’s re-employment requirements as part of EIS eligibility and continued benefit administration:

  • Register with MYFutureJobs for job-search activities.
  • Participate in the Re-employment Placement Programme and comply with directions issued by PERKESO.
  • Report to PERKESO if they accept a job offer or return to employment, including permanent, contract, part-time, temporary or apprenticeship employment. Where an Insured Person accepts an offer of employment during the period of receiving JSA, section 34(5) of Act 800 requires the Insured Person to notify PERKESO within seven days from the date of acceptance.
  • Once the EIS application has been approved, submit the required monthly EIS benefit claims through the portal for subsequent benefit payments.

Statutory Employer Compliance and EIS Management in Payroll

Employers are legally required to maintain the prescribed employee and contribution records and pay the applicable EIS contributions to PERKESO every month. Under regulation 9 of the Employment Insurance System (Registration and Contribution) Regulations 2017, the contribution must be paid no later than the 15th day of the immediately following month. The statutory contribution comprises both the employer’s share and the employee’s share in accordance with section 18 and the Second Schedule to Act 800. Under subsections 20(1a) and 20(1b), an employer may recover the employee’s contribution by deduction from wages and not otherwise, but must not deduct or otherwise recover the employer’s contribution from the employee. Under Section 16(5), failure to register an employee under Section 16(1) carries a penalty of a fine up to RM10,000, imprisonment for up to two years, or both.

Upcoming change from 2 January 2027

Section 11 of Act A1796, including the new Parts VIA and VIB on Employment Services and the Active Labour Market, will come into operation on 2 January 2027. This includes the new section 45F employer duty to notify PERKESO of job vacancies and new positions.

Statutory Contribution Rates and Wage Bands

EIS contributions are determined by the statutory wage bands set out in the Second Schedule to Act 800.

Monthly Wage Category Employer Share Employee Share Total Monthly Contribution
RM1,700 (Current minimum wage under the Minimum Wages Order 2024, subject to its scope and exclusions) RM3.30 RM3.30 RM6.60
Exceeding RM2,400 to RM2,500 RM4.90 RM4.90 RM9.80
Exceeding RM3,900 to RM4,000 RM7.90 RM7.90 RM15.80
Exceeding RM4,900 to RM5,000 RM9.90 RM9.90 RM19.80
Exceeding RM5,900 — maximum prescribed contribution RM11.90 RM11.90 RM23.80

Note: The general minimum wage is RM1,700 per month under the Minimum Wages Order 2024, subject to the persons and arrangements to which that Order applies. Contributions for wages exceeding RM6,000 remain capped at the RM6,000 level. Employers must cross-reference actual monthly salaries against the exact wage bands in the Second Schedule.

How Modern HRMS Simplifies EIS Payroll Management

Calculating statutory contributions manually across different wage brackets increases the risk of payroll errors. Implementing an automated human resource management system can help maintain payroll compliance and reduce the risk of manual calculation errors.

A purpose-built HR software solution like Worksy streamlines internal payroll operations:

  • Automated Rate Band Lookups: Automatically applies the correct Second Schedule contribution amounts for statutory payroll deductions.
  • Accurate Offboarding Records: Automatically produces complete salary histories to support an efficient employee offboarding process when an employee departs.
  • Structured Payroll Export Summaries: Generates clean, accurate payroll summaries and contribution breakdowns, providing HR teams with exact figures for manual entry and file upload into the PERKESO Assist Portal.

Frequently Asked Questions (FAQ)

How long does PERKESO take to process and pay an EIS claim?

According to PERKESO’s Client Charter, eligible Job Search Allowance claims are processed and paid within 14 days after all required documents are received complete.

Can employees claim EIS after accepting a Voluntary Separation Scheme (VSS) or Mutual Separation Scheme (MSS)?

Yes. Under Act 800, section 30(2)(a) expressly recognises resignation under a voluntary separation scheme by mutual consent. PERKESO’s current EIS guidance also lists VSS/MSS as qualifying LOE circumstances. Claimants must submit the relevant end-of-employment documentation required by PERKESO, such as the applicable VSS/MSS letter or agreement.

What is the maximum statutory EIS monthly contribution in Malaysia?

The maximum monthly contribution is RM23.80 (RM11.90 employer share + RM11.90 employee share) for employees earning monthly wages exceeding RM5,900.

What should an applicant do if an EIS claim is rejected?

An Insured Person may institute proceedings before the Social Security Appellate Board (Jemaah Rayuan Keselamatan Sosial) in relation to a decision under Act 800. Under section 61, the application must generally be made within 60 days from the date on which the cause of action arises. For a benefits claim, the cause of action is deemed to arise on the date the Insured Person receives PERKESO’s written decision.

Are domestic workers covered under the Employment Insurance System?

Yes, eligible local domestic workers who are Malaysian citizens, Permanent Residents, or temporary residents are covered under Act 800 pursuant to P.U. (A) 249/2021. However, foreign domestic workers remain excluded from statutory EIS coverage.

References and Statutory Sources