Understanding EIS (Employment Insurance System) Malaysia 2025

The Employment Insurance System (EIS) provides financial protection and re-employment support for Malaysian workers who lose their jobs. This comprehensive guide explains how EIS works, contribution rates, benefits, and how to claim if you become unemployed.

What is EIS (Employment Insurance System)?

The Employment Insurance System (EIS), or Sistem Insurans Pekerjaan (SIP), is a social security program managed by SOCSO (PERKESO) that provides temporary financial assistance and re-employment services to workers who lose their jobs. Launched on January 1, 2018, EIS aims to help unemployed workers transition back into the workforce.

EIS is different from SOCSO:

• SOCSO: Protects against work injuries and invalidity
• EIS: Protects against job loss and unemployment

Who Must Contribute to EIS?

EIS contributions are mandatory for:

• All Malaysian employees in the private sector
• Employees aged 18 to 60 years old
• Employees earning any salary amount (no salary threshold)
• Both full-time and part-time employees

Exemptions: Civil servants, domestic workers, and self-employed individuals are not covered under EIS.

EIS Contribution Rates 2025

EIS contributions are simple and affordable - just 0.4% of your monthly salary, split equally between you and your employer:

EIS Contribution Examples

Note: EIS contributions are capped at a maximum monthly salary of RM4,000. If you earn more than RM4,000, your contribution is calculated based on RM4,000 (RM8.00 employee + RM8.00 employer = RM16.00 total).

EIS Benefits: What You Get

1. Job Search Allowance (JSA)

Monthly cash payments to support you while looking for a new job:

• Amount: 40-80% of your previous monthly salary (up to RM1,600/month)
• Duration: 3 to 6 months, depending on contribution period
• Payment: Paid monthly directly to your bank account

2. Reduced Income Allowance (RIA)

If you find a new job with lower pay:

• Amount: 20% of salary difference (up to RM500/month)
• Duration: Up to 12 months
• Purpose: Helps bridge the income gap while you rebuild your career

3. Training Fee Allowance

Financial support for skills upgrading:

• Amount: Up to RM4,000 for training courses
• Coverage: Course fees, certification costs, training materials
• Purpose: Improve your skills and employability

4. Early Re-employment Allowance

Bonus for finding a job quickly:

• Amount: 25% of remaining JSA entitlement (one-time payment)
• Eligibility: Find a job before your JSA period ends
• Purpose: Incentive to actively seek employment

5. Career Counseling & Job Placement

Free support services:

• One-on-one career counseling
• Job matching and placement services
• Resume writing assistance
• Interview preparation workshops

How to Claim EIS Benefits

Eligibility Requirements

To claim EIS benefits, you must:

• Have contributed to EIS for at least 12 months in the last 24 months
• Lost your job due to retrenchment, company closure, or end of contract
• Be actively seeking employment
• Register as a job seeker within 60 days of job loss
• Not have resigned voluntarily or been dismissed for misconduct

Claim Process

EIS vs SOCSO: Key Differences

Frequently Asked Questions

Is EIS mandatory in Malaysia?

Yes, EIS is mandatory for all Malaysian employees in the private sector aged 18-60, regardless of salary level. Both employee and employer must contribute 0.2% each (0.4% total) of monthly salary, capped at RM4,000.

Can I claim EIS if I resign?

No, you cannot claim EIS benefits if you resign voluntarily. EIS only covers involuntary job loss such as retrenchment, company closure, end of contract, or constructive dismissal. If you're dismissed for misconduct, you're also not eligible.

How much EIS will I receive if I lose my job?

You'll receive 80% of your salary for the first month, then 50% for subsequent months, up to a maximum of RM1,600/month. The duration depends on your contribution period: 3 months (12-24 months contributions), 5 months (24-36 months), or 6 months (36+ months).

How long must I contribute before I can claim EIS?

You must have contributed to EIS for at least 12 months within the last 24 months before losing your job. For example, if you've worked for 18 months and lose your job, you're eligible to claim EIS benefits.

Can I claim EIS multiple times?

Yes, you can claim EIS benefits multiple times throughout your career, as long as you meet the eligibility requirements each time. After claiming, you need to contribute for another 12 months before you can claim again.

What happens if I find a job while receiving EIS?

You must inform SOCSO immediately. Your JSA payments will stop, but you may be eligible for Early Re-employment Allowance (25% of remaining JSA) and Reduced Income Allowance if your new salary is lower than your previous job.

Do foreigners contribute to EIS?

No, currently EIS only covers Malaysian citizens and permanent residents. Foreign workers are not required to contribute to EIS and are not eligible for EIS benefits.

How much is EIS deduction from my salary?

EIS deduction is 0.2% of your monthly salary, capped at RM4,000. For example, if you earn RM5,000/month, your EIS deduction is RM8.00/month (0.2% of RM4,000). If you earn RM3,000, it's RM6.00/month.

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Conclusion

EIS provides valuable protection for Malaysian workers facing unemployment. For a small monthly contribution (0.2% of salary), you get financial support, training opportunities, and career services if you lose your job.

Key takeaways:

• EIS is mandatory for all Malaysian private sector employees
• Contribution is just 0.2% of salary (capped at RM4,000)
• Provides 3-6 months of income support if you lose your job
• Includes training allowances and career counseling
• Must contribute for 12 months before you can claim
• Only covers involuntary job loss (not resignation)

Use our calculator to see exactly how EIS affects your take-home salary along with EPF, SOCSO, and income tax!