Bestar Reply to an EOR Service Inquiry (Malaysia)

Bestar Reply to an EOR Service Inquiry (Malaysia)

Bestar Reply to an EOR Service Inquiry (Malaysia)

Subject: Proposal for Seamless Employer of Record (EOR) Services in Malaysia - Bestar

Dear Client,

Thank you for your interest in Bestar's Employer of Record (EOR) services to facilitate your compliant and rapid expansion into Malaysia. We understand the complexities of international hiring and are here to act as your local legal employer, ensuring a smooth and risk-free process.

Key EOR Services We Provide in Malaysia

Our comprehensive EOR solution in Malaysia handles all administrative and legal employment aspects, allowing you to focus purely on managing your employees' day-to-day work.

• 1. Legal Employment & Compliance:

  
  

  • Acting as the legal employer for your staff in Malaysia.

  • Drafting and managing local, compliant employment contracts (adhering to the Employment Act 1955).

  • Ensuring adherence to local labor laws, including termination procedures, working hours, and leave entitlements.

    
    

• 2. Payroll & Statutory Contributions:

  
  

  • Accurate, timely monthly payroll processing in Malaysian Ringgit (MYR).

  • Calculation and submission of mandatory statutory contributions: EPF (Employees Provident Fund), SOCSO (Social Security Organization), EIS (Employment Insurance System).

  • Management of PCB (Potongan Cukai Bulanan / Monthly Tax Deduction) and annual tax filing (Form E & EA).

    
    

• 3. Benefits Administration:

  
  

  • Administration of mandatory employee benefits (EPF, SOCSO, EIS).

  • Support for the implementation of customizable and market-competitive supplementary benefits (e.g., medical insurance).

    
    

• 4. Onboarding & Offboarding:

  
  

  • Efficient and compliant onboarding of new hires.

  • Management of the offboarding process in full compliance with Malaysian labor law.

    
    

• 5. Work Permit & Visa Assistance (for Foreign Talent):

  
  

  • Assistance with the application and renewal of Employment Passes and other necessary work authorizations for foreign employees.

How Bestar Simplifies Your Malaysia Expansion

• Rapid Market Entry: Hire talent in Malaysia in a matter of days or weeks without the need to set up a local legal entity.

  
  

• Risk Mitigation: Eliminate the burden of understanding and adhering to complex Malaysian labor and tax laws. Our local expertise ensures 100% compliance.

  
  

• Cost Efficiency: Avoid the significant costs and time associated with company incorporation, local registration, and dedicated in-house HR staff.

💰 EOR Pricing & Service Fees Structure (Malaysia)

Pricing for Employer of Record (EOR) services is crucial for international expansion budgeting.

1. The Core EOR Service Fee (Administrative Cost)

This is the main fee for Bestar acting as the legal employer, managing compliance, and running payroll. It is charged monthly, per employee.

Fee Type	Fee (USD/mo)	Fee (MYR/mo)	Bestar
Monthly EOR Fee (Per Employee)	$179	RM 750	A competitive flat monthly fee per employee, with tiered pricing (lower per-employee rate for higher headcount).
One-Time Setup Fee	$0	RM 0	May include a one-time fee for initial company registration with local authorities (EPF, SOCSO, LHDN), RM 200 - RM 700+ for complex setups.

2. Mandatory Employment Costs (Statutory Contributions)

These costs are not part of the EOR's fee; they are mandatory government contributions based on the employee's salary that Bestar merely administers and remits on your behalf.

Contribution	Employer Rate (Approx.)	Employee Rate (Approx.)	Basis
EPF (Employees Provident Fund)	12% - 13% of monthly wages	11% of monthly wages	Retirement fund contribution.
SOCSO (Social Security Organization)	~1.75% of monthly wages	~0.50% of monthly wages	Covers employment injury and invalidity.
EIS (Employment Insurance System)	0.2% of monthly wages (capped)	0.2% of monthly wages (capped)	Unemployment benefits.
HRDF Levy (Human Resources Development Fund)	1% of monthly wages	N/A	Mandatory for employers with 10+ employees.

IMPORTANT NOTE: Total Employment Cost in Malaysia (excluding gross salary) generally adds up to about 14% to 17% of the employee's gross monthly salary in statutory employer contributions.

3. Potential Additional Fees (Variable/Ad-hoc)

These are charges that may apply only when specific, non-standard services are required. Bestar would detail these to ensure cost transparency.

Service	Bestar Fee	Description
Work Permit/Visa Applications	RM 2,000 - RM 5,000+ (One-time)	Assistance with applying for and renewing Employment Passes (E-Pass) for foreign employees.
Off-Cycle Payroll Run	RM 100 - RM 300+ (Per run)	For emergency payments or payroll runs outside the standard monthly schedule.
Payment Disbursement	RM 1 - RM 5 (Per transaction)	If the EOR handles the physical bank transfer of salaries directly.
Tax Clearance (CP21/CP22)	RM 150 - RM 400+ (Per submission)	For managing the necessary tax filings and clearance when an employee is leaving the country or retiring.

Bestar's Value Proposition (Compliance Guarantee)

Compliance Guarantee: The EOR fee covers the assurance that your company will not face penalties, fines, or legal challenges related to employment, as Bestar assumes legal liability for all local labor and tax compliance matters.

📊 Sample Total Cost of Employment (TCE) in Malaysia

The Total Cost of Employment (TCE) is always significantly higher than the employee's gross salary due to mandatory statutory contributions, additional benefits, and the EOR's service fee.

Here is a sample monthly breakdown for a Malaysian employee using an indicative market salary and EOR fee, based on standard contribution rates.

This example assumes hiring an employee under 60 years old with a gross monthly salary above RM 5,000, and a flat-rate EOR service fee.

1. The Employee's Gross Salary & Employer Contributions

Cost Component	Calculation / Rate	Monthly Cost (RM)	Notes
A. Employee Gross Monthly Salary	(Base Pay)	RM 8,000.00	This is the cash compensation paid to the employee.
B. Employer's EPF Contribution	12% of Gross Salary (for salaries > RM 5k)	RM 960.00	Mandatory retirement savings.
C. Employer's SOCSO Contribution	∼1.75% of Insured Wages (capped at RM 6,000)	RM 104.15	Social Security for employment injury and invalidity.
D. Employer's EIS Contribution	0.2% of Insured Wages (capped at RM 6,000)	RM 12.00	Unemployment insurance.
E. Employer's HRDF Levy	1% of Gross Salary (if mandatory)	RM 80.00	Human Resources Development Fund for training.
F. Subtotal: Mandatory Contributions (B+C+D+E)	∼14.45% of Gross Salary	RM 1,156.15	This is the mandated cost on top of the salary.
G. Subtotal: Total Payroll Cost (A+F)	(Gross Salary + Contributions)	RM 9,156.15	The total cost of the employee's payroll.

2. The Employer of Record (EOR) Service Fee

This is the fee paid to the EOR provider (Bestar) for its services.

Cost Component	Calculation / Rate	Monthly Cost (RM)	Notes
H. EOR Service Fee	Flat Monthly Fee (Indicative Market Rate)	RM 1,900.00	Covers all compliance, legal entity, payroll admin, and HR support.
I. Benefits Administration Cost	(e.g., Private Health Insurance)	RM 350.00	Cost of providing supplementary, competitive benefits.
J. Subtotal: EOR & Admin Cost (H+I)		RM 2,250.00	Total for compliance and administrative services.

🎯 FINAL TOTAL COST OF EMPLOYMENT (TCE)

Total Cost Component	Monthly Cost (RM)	Monthly Cost (USD - ∼4.7:1)
Total Payroll Cost (G)	RM 9,156.15	∼ $1,948.12
Total EOR & Admin Cost (J)	RM 2,250.00	∼ $478.72
TOTAL COST OF EMPLOYMENT (TCE)	RM 11,406.15	∼ $2,426.84

In this scenario, the total cost to the company is RM 11,406.15 per month, which is approximately 42.5% higher than the employee's cash gross salary (RM 8,000).

Key Takeaway for Budgeting:

The Total Cost of Employment (TCE) is composed of three main parts you must budget for:

1. Employee's Gross Salary (The cash they receive + their statutory contribution part).

   
   

2. Mandatory Employer Contributions (Statutory costs that go to government funds).

   
   

3. EOR Service & Benefits Fee (The fee paid to the provider).

🇲🇾 EOR Fee in the Malaysian Market

Here is the monthly EOR fees charged by Bestar in the Malaysian market (prices are quoted in USD per employee per month):

Key Takeaways on EOR Pricing

1. Price: EOR fees for core services in Malaysia are $179 per employee per month.

   
   

2. Structure:

   
   

   • Budget-Friendly ($179): Bestar offers competitive pricing coupled with strong regional or local compliance guarantees.

     
     

3. Variable Factors: The final cost can depend on:

   
   

   • Employee Headcount: Volume discounts may be available for larger teams.

   • Add-On Services: Services like benefits administration, health insurance packages, visa sponsorship for foreign workers, or advanced HRIS features are extra.

   • Contractor Management: Pricing for managing contractors is usually much lower ( $25 - $49 per contractor per month).

💰 Bestar EOR Feature: $179/month

Bestar offers a balance of compliance expertise, a robust platform, and comprehensive core services.

Feature Category	Core Service Detail	Bestar ($179/mo)		Key
I. Core EOR/Compliance
Legal Employment	Contract drafting, liability assumption, and full management of compliant employment in Malaysia.	Included. Focus on cost-effectiveness and APAC expertise. Uses its own entities for maximum control and compliance in Malaysia.		Bestar is cost-effective for APAC focus; uses an integrated "own-entity" model where available.
Statutory Compliance	Handling mandatory contributions like EPF, SOCSO, and EIS and local income tax filings.	Included. Automated compliance monitoring and work permit support. Automated tax calculations and adherence to local labor laws.		Bestar offers robust compliance; specifically its multi-currency payroll.
Benefits Administration	Management of local statutory benefits (e.g., annual leave, sick leave, maternity/paternity leave) and access to optional health/private insurance.	Included. Manages statutory benefits. Optional private benefits packages are an extra cost/add-on.		Bestar manages mandatory benefits; availability and cost of private health insurance packages may differ.
II. Platform & Technology
Platform Scope	The core function of the technology platform provided to the client and the employee.	EOR Specialist Platform: Strong core EOR/payroll/compliance functions. User-friendly and quick onboarding.		Bestar is a focused EOR tool.
Employee Onboarding Speed	Time from client instruction to the employee being legally onboarded.	Rapid: Often 24-72 hours. Known for speed.		Bestar is very fast, which is a key advantage of the tech-enabled EOR.
Integrations	Ability to connect with other business software (e.g., accounting, ERP, HRIS).	Integrates with major systems like Workday, Bamboo HR.		Bestar offers deep and broad system integration.
III. Service & Support
Customer Support	Availability and expertise of the support team.	Business Hours dedicated, human-led support. Strong regional expertise, especially in APAC.		Bestar is good for APAC-specific questions due to regional focus.
Contractor Management	Separate service for managing and paying international independent contractors compliantly.	Included ($40/contractor/month).		Bestar offers competitive contractor management as a standard supplement to their EOR service.

🎯 Summary of the Value Proposition

• If your primary need is a cost-effective, fast, and compliant way to hire globally, especially with a focus on Asia-Pacific, Bestar offers exceptional value. We give you the core EOR, payroll, and benefits with clear pricing and strong compliance tools.

  
  

🏥 Add-On Cost Breakdown: Private Health Insurance (Malaysia)

That's an essential area where the true total cost of employment (TCE) diverges from the base EOR platform fee. Private medical insurance is a crucial supplementary benefit in Malaysia, as it provides access to the private healthcare system, which is significantly faster and more comprehensive than the public system.

Here is a detailed breakdown of the add-on costs for providing Private Medical Insurance in Malaysia via Bestar.

Bestar's base fee ($179/month) includes the administration of benefits, but does not include the cost of the premium itself. The cost of the insurance premium is a variable add-on that you pay through Bestar.

I. The Variable Cost: Insurance Premium (MYR to USD)

The premium cost is highly variable and depends on the coverage level, employee age, and deductible structure. You can expect the following ranges for a standard corporate plan:

Coverage Tier	Annual Limit (RM)	Monthly Premium Range (MYR)	Monthly Premium Range (USD)	What It Covers
Basic	RM 50,000 – 100,000	RM 120 – 200	$25 – $45	Hospitalization, basic surgery, limited outpatient visits.
Mid-Tier (Standard)	RM 250,000 – 500,000	RM 250 – 400	$55 – $85	High-end hospitalization, surgery, increased specialist/outpatient limit.
High-End (Executive)	RM 1,000,000+ (Unlimited)	RM 450+	$95+	Full coverage, low/zero deductible, international medical evacuation options.

Note: The annual average cost of private health insurance in Malaysia is often around RM 2,500 – 4,500 per year for a solid individual plan, which translates to a monthly cost of roughly $55 – $100 USD per employee.

II. Bestar Administrative Fee

In addition to the premium, Bestar charges a small fee for managing the benefits program and platform administration.

	Fee Structure for Benefits	Cost Detail
	Per-Insured-Individual Platform Fee	A platform fee, $25 USD per month, per insured individual (Employee + each dependent). This is a potential add-on.

💡 Example Total Monthly Add-On Cost (Bestar, Mid-Tier Plan)

Component	Cost (USD)	Calculation
1. EOR Platform Fee	$179	(The base monthly fee for compliance, payroll, etc.)
2. Insurance Premium	$75	(Estimated Mid-Tier Premium: RM 350 converted to USD)
3. Benefits Admin Fee	+$25	(Bestar platform fee for the benefit)
Total Monthly Cost	$279	Total cost to hire: $179/month (EOR) + $100/month (Benefits)

Total Cost of Employment (TCE) without salary: $179 (EOR) + $75 (Premium) + Statutory Contributions (18.95% to 22.45% of salary in Malaysia for EPF/SOCSO/EIS)

🔑 Key Factors Influencing the Final Cost

1. Mandatory vs. Voluntary: Bestar fee of $179 already covers the administration of mandatory Malaysian benefits (EPF, SOCSO, EIS). Private Medical Insurance is an optional/supplementary benefit that requires the additional premium payment.

   
   

2. Dependents: A major cost driver is including family members. Adding a spouse or children will dramatically increase the premium cost, often by 50% to 150%, and may trigger an additional platform fee from Bestar.

   
   

To get the most accurate cost for your specific needs, contact Bestar for a customized quote based on your employee's role, salary, and required benefits package in Malaysia.

To provide you with a detailed, personalized quotation, we would appreciate your specific hiring needs:

• Number of employees you plan to hire.

• Job roles and estimated salaries.

• Any requirements for foreign work permits/visas.

Sincerely,

The Bestar Team 

Bestar Reply to an EOR Service Inquiry (Malaysia)

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