On 1 October 2026, the Employment Insurance System changed. Following the Employment Insurance System (Amendment) Act 2026, gazetted on 15 September 2026, contributors who lose their jobs now get more support, and the contribution funding it did not rise at all. If you run payroll, the deduction on the payslip has not changed at all. What moved is the value on the other side, and almost all of it is aimed at one thing: getting people back to work faster.
What Changed on 1 October 2026
Here is the before-and-after at a glance.
| Benefit | Before | From 1 October 2026 |
|---|---|---|
| Early Re-Employment Allowance | 25% | 50% of remaining unpaid Job Search Allowance |
| Training allowance (per day) | RM10–RM20 (based on assumed salary) | Flat RM30 |
| Maximum claimable training fee | RM4,000 | RM7,000 |
| Mobility allowance (relocation) | Not available | One-off RM1,000 (relocation over 100km) |
| Maximum combined support | — | Up to RM25,000 across all benefits |
| Contribution rate (employee + employer) | 0.2% + 0.2%, RM6,000 ceiling | Unchanged |
The figure catching headlines is the up-to-RM25,000 support, though it is worth being clear about what that number is: not a cheque anyone is handed, but the maximum combined value of everything a contributor could qualify for across these benefits, depending on their contribution history and entitlement. The more revealing detail is where the rest of the new money goes.
The Money Is Pointed at Getting Back to Work
Look down the list and a pattern appears. The Early Re-Employment Allowance, paid when a contributor finds a new job before exhausting their Job Search Allowance, has doubled. A new mobility allowance helps someone relocate for work. The training allowance is now a flat RM30 a day and the claimable training fee has nearly doubled. Every one of these rewards the return to work, not the wait between jobs.
That is the point most people miss about EIS. It was never designed to pay you comfortably for being unemployed. The Job Search Allowance that anchors it pays 80% of your previous salary in the first month and steps down to 30% by the fifth and sixth, precisely so the push to find work never eases. The October changes lean harder into that design. This is not a scheme becoming softer on unemployment. It is a scheme becoming more determined to end it.
Why This Matters When You Retrench
For an employer, EIS stops being an abstraction at the exact moment you make a role redundant. The statutory severance you owe at that point, which we covered in The Retrenchment Payout Is a Formula, Not a Negotiation, is your own obligation. EIS is what carries on after it, and it is a different kind of help: not a final sum, but a route back into work through job matching, retraining, and now more generous re-employment and relocation support.
An employer who knows this can hand a departing employee something more useful than a cheque and a handshake, a system built to get them re-hired and, from October, funded to do it better. That is the difference between an exit that leaves someone stranded and one that points them at the next step.
The Benefit Depends on the Record You Keep
There is a catch that decides whether any of this reaches your people. EIS benefits are calculated from the contribution record, the insured wage and the number of contributing months. If those contributions were under-reported or interrupted, the employee does not get the protection the scheme promises. They get whatever the flawed record says they are owed. A more generous scheme means nothing on top of bad data.
This is where clean payroll earns its keep. With TimeTec Payroll, the EIS contribution is calculated correctly against the ceiling and reported completely, month after month, so that if an employee ever needs to claim, the benefit reflects what they actually earned. The scheme can only be as generous as the record you maintained.
The Cheque Was Never the Point
It is easy to read the October update as EIS simply paying out more. What it is really doing is paying to get people back to work sooner, and the same small deduction now stands behind a great deal more support than it did in September.