If you have a payslip, you may notice a deduction for EIS (Employee Insurance System) in addition to deductions for KWSP (Employee Provident Fund) and SOCSO (Social Security Organization). For young workers who are new to the workforce, you may be wondering about the purpose of this deduction. Essentially, the Employee Insurance System (EIS) or Sistem Insurans Pekerjaan (SIP) was introduced by the government under the 2017 Employee Insurance System Act. Its purpose is to help workers who lose their jobs to regain employment, including several other financial benefits.
What Is the Deduction for the Employee Insurance System (EIS) In the Payslip?
Basically, every private sector employee is automatically enrolled in EIS, and it is one of the employer’s responsibilities to ensure contributions are made through salary deductions. For those who are not familiar with this insurance scheme, here are five things about EIS for your reference and guidance.
1. What is the Employment Insurance System?
Basically, the employment insurance scheme was established in 2018 with the aim of helping workers, especially private sector workers, who have lost their jobs or source of income.
- It provides immediate financial assistance within seven days of confirmation of job loss to contributors who have been laid off;
- It helps contributors who have lost their jobs to find new employment through job placement programs, including mobility assistance;
- It enhances the employability of contributors who have lost their jobs through training and vocational education programs.
2. Contribution Rates for Employment Insurance System (EIS)
The contribution rate for EIS is 0.2 percent for employers and 0.2 percent for employees based on the employee’s monthly salary. For example, if your monthly salary is RM2,000, you would need to pay a monthly contribution of RM7.80 (RM3.90 from the employee and RM3.90 from the employer). Below is the contribution schedule for EIS PERKESO or the EIS contribution rates for your reference:
|Monthly Salary||Employer Contribution||Employee Contribution||Contribution Amount|
|Salary below RM30||5 cent||5 cent||5 cent|
|Salary is more than RM30 but less than RM50||10 cent||10 cent||20 cent|
|Salary is more than RM50 but less than RM70||15 cent||15 cent||30 cent|
|Salary is more than RM70 but less than RM100||20 cent||20 cent||40 cent|
|Salary is more than RM100 but less than RM140||25 cent||25 cent||50 cent|
|Salary is more than RM140 but less than RM200||35 cent||35 cent||70 cent|
|Salary is more than RM200 but less than RM300||50 cent||50 cent||RM1.00|
|Salary is more than RM300 but less than RM400||70 cent||70 cent||RM1.40|
|Salary is more than RM400 but less than RM500||90 cent||90 cent||RM1.80|
|Salary is more than RM500 but less than RM600||RM1.10||RM1.10||RM2.20|
|Salary is more than RM600 but less than RM700||RM1.30||RM1.30||RM2.60|
|Salary is more than RM700 but less than RM800||RM1.50||RM1.50||RM3.00|
|Salary is more than RM800 but less than RM900||RM1.70||RM1.70||RM3.40|
|Salary is more than RM900 but less than RM1,000||RM1.90||RM1.90||RM3.80|
|Salary is more than RM1,000 but less than RM1,100||RM2.10||RM2.10||RM4.20|
|Salary is more than RM1,100 but less than RM1,200||RM2.30||RM2.30||RM4.60|
|Salary is more than RM1,200 but less than RM1,300||RM2.50||RM2.50||RM5.00|
|Salary is more than RM1,300 but less than RM1,400||RM2.70||RM2.70||RM5.40|
|Salary is more than RM1,400 but less than RM1,500||RM2.90||RM2.90||RM5.80|
|Salary is more than RM1,500 but less than RM1,600||RM3.10||RM3.10||RM6.20|
|Salary is more than RM1,600 but less than RM1,700||RM3.30||RM3.30||RM6.60|
|Salary is more than RM1,700 but less than RM1,800||RM3.50||RM3.50||RM7.00|
|Salary is more than RM1,800 but less than RM1,900||RM3.70||RM3.70||RM7.40|
|Salary is more than RM1,900 but less than RM2,000||RM3.90||RM3.90||RM7.80|
|Salary is more than RM2,000 but less than RM2,100||RM4.10||RM4.10||RM8.20|
|Salary is more than RM2,100 but less than RM2,200||RM4.30||RM4.30||RM8.60|
|Salary is more than RM2,200 but less than RM2,300||RM4.50||RM4.50||RM9.00|
|Salary is more than RM2,300 but less than RM2,400||RM4.70||RM4.70||RM9.40|
|Salary is more than RM2,400 but less than RM2,500||RM4.90||RM4.90||RM9.80|
|Salary is more than RM2,500 but less than RM2,600||RM5.10||RM5.10||RM10.20|
|Salary is more than RM2,600 but less than RM2,700||RM5.30||RM5.30||RM10.60|
|Salary is more than RM2,700 but less than RM2,800||RM5.50||RM5.50||RM11.00|
|Salary is more than RM2,800 but less than RM2,900||RM5.70||RM5.70||RM11.40|
|Salary is more than RM2,900 but less than RM3,000||RM5.90||RM5.90||RM11.80|
|Salary is more than RM3,000 but less than RM3,100||RM6.10||RM6.10||RM12.20|
|Salary is more than RM3,100 but less than RM3,200||RM6.30||RM6.30||RM12.60|
|Salary is more than RM3,200 but less than RM3,300||RM6.50||RM6.50||RM13.00|
|Salary is more than RM3,300 but less than RM3,400||RM6.70||RM6.70||RM13.40|
|Salary is more than RM3,400 but less than RM3,500||RM6.90||RM6.90||RM13.80|
|Salary is more than RM3,500 but less than RM3,600||RM7.10||RM7.10||RM14.20|
|Salary is more than RM3,600 but less than RM3,700||RM7.30||RM7.30||RM14.60|
|Salary is more than RM3,700 but less than RM3,800||RM7.50||RM7.50||RM15.00|
|Salary is more than RM3,800 but less than RM3,900||RM7.70||RM7.70||RM15.40|
|Salary is more than RM3,900 but less than RM4,000||RM7.90||RM7.90||RM15.80|
|Salary is more than RM4,000||RM7.90||RM7.90||RM15.80|
JSIP PERKESO Contribution Schedule
3. Benefits of Employment Insurance System
In general, employees and employers who contribute to the Employment Insurance System (EIS) will benefit as follows in the event of job loss:
- Job Search Allowance will be paid to employees who lose their only job, with a minimum monthly payment of three months and a maximum of six months;
- Reduced Income Allowance is given to employees who lose one of their jobs, with the same rate of payment as the Job Search Allowance and paid in a lump sum;
- Training Fees are provided to selected employees to attend training recommended by PERKESO for up to six months, with a maximum fee of RM4,000;
- Early Return to Work Allowance will be given if the contributor gets a new job earlier, i.e., around 25 percent of the amount that should have been received but has not yet been received;
- Training Allowance is given to employees to encourage them to attend the provided training. Payment is made for up to six months at a rate of RM10 to RM20 per training day;
- Job Placement Program helps employees who lose their job to find new employment, including job interviews, training, and counseling services for support.
How much can you receive if you lose your job? Fendi has been working for several years and has been paying EIS throughout his employment. He was laid off because his company went bankrupt and could no longer afford to pay its employees. His last salary was RM6,000. As the contribution limit for the Employment Insurance System (EIS) is capped at RM4,000, he will receive benefits based on this amount.
|Month||Percentage (%)||Eligible Claims|
4. Eligibility Criteria to Apply for EIS
The following are the terms and qualifications for applying for EIS for your guidance and reference:
- Malaysian citizen;
- Working in the private sector;
- Application MUST be made within 60 DAYS from the date of termination of employment;
- Comply with the Contribution Eligibility Criteria set by EIS;
- Lost job under the definition of Job Loss by EIS.
The categories of job loss that are covered under EIS include:
- Termination of employment (retrenchment);
- VSS/MSS (Voluntary/Mutual Separation Scheme);
- Company closure due to natural disasters;
- Company bankruptcy;
- Constructive dismissal (oppressed by employer);
- Resignation due to sexual harassment or workplace threats;
- Resignation due to being directed to perform dangerous tasks that are not within the scope of duty.
However, you may not be eligible to apply for financial assistance under the employment insurance scheme if:
- You resigned voluntarily;
- Your contract of service has ended;
- Your contract of service has been terminated by mutual agreement with the employer without any terms and conditions;
- You have completed the work as per the contract of service;
- You have retired; or
- The termination of your contract of service was due to misconduct.
5. How to Claim the Employment Insurance Scheme (EIS)
When you lose your job, you need to submit an application within 60 days from the date of job loss. Your delay in submitting the application may result in your claim being rejected or not processed. Generally, there are two ways to make a claim, which are online EIS claim and manual EIS claim at PERKESO office. To make an EIS claim, applicants can follow the steps outlined below:
- Visit the PERKESO website;
- Register as a job seeker;
- Fill in the claim form and attach the necessary documents;
- The complete application will be processed and reviewed based on the general eligibility and contribution eligibility requirements to confirm the job loss;
- The transfer of funds will be made directly to the applicant’s account after the application is approved;
- You also need to participate in the Job Placement Program within seven days after receiving notification from PERKESO;
- Additionally, you must report your status to PERKESO every month.
Documents for EIS Application
To facilitate your application process, here is a list of documents that need to be attached for your Employment Insurance Scheme application:
- Copy of identity card;
- Evidence of job loss, such as a Termination Letter;
- Copy of bank account details;
- Copy of the last six months’ salary slips.
Therefore, it is important to ensure that your employer is registered and contributing to the Employment Insurance Scheme (EIS) so that if you are suddenly terminated, you can make a claim to reduce your financial burden before you find a new job. Additionally, if you are looking for the best car insurance, home insurance, motorcycle insurance, or life insurance, you can visit the Qoala website for more information. Qoala is an easy, transparent, and fast insurance buying platform with competitive and reasonable pricing offers.