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What is SOCSO? The Essential HR Guide to Malaysia's Social Security Organization

Social Security Organization (SOCSO): The Essential HR Guide to Malaysia PERKESO

Safeguard Your Employees, Secure Your Business

Posted on 27 March 2024 in Business | Suki Bajaj

As an HR professional in Malaysia, understanding the Social Security Organisation (SOCSO) is essential. SOCSO safeguards your employees' well-being by providing a wide range of various benefits and protections.

By complying with Malaysian regulations, you're not only fulfilling a legal requirement but also providing valuable security for your employees. Remember, a happy and protected workforce is a productive workforce!

So, here's a quick guide for HR professionals on its functions and how it applies to your employees, ensuring they receive the benefits they deserve!

What is SOCSO?

The Social Security Organisation (SOCSO), also known as Pertubuhan Keselamatan Sosial (PERKESO), is a Malaysian government agency that provides financial aid and medical benefits to employees. SOCSO protects eligible employees in case of workplace accidents, occupational diseases, invalidity, and death.

Types of SOCSO Coverage

SOCSO offers two main insurance schemes:

  • Employment Injury Scheme:

    Employment injury scheme provides coverage for workplace accidents and illnesses.

  • Invalidity Scheme:

    Invalidity scheme offers financial support in case of employee disability or death due to non-work-related causes.

Employees can be categorized into :

  • Employment Injury Scheme and Invalidity Scheme: Covered under both schemes (most comprehensive protection)
  • Employment Injury Scheme: Covered under Employment Injury Scheme only

Who is Eligible for SOCSO?

  • All Malaysian citizens and permanent residents working under a contract in the private sector are eligible for both schemes.
  • Contractual/temporary staff of Federal / State governments and Statutory Bodies.
  • The following groups are eligible for the Employment Injury Scheme:
    • Foreign workers
    • Interns
    • Malaysian citizens above 60 years old
    • Malaysian citizens above 55 years old who have never been employed in the private sector

Who is Exempted from SOCSO?

  • Federal and state government permanent employees.
  • Domestic helpers.
  • Self-employed individuals.
  • Sole proprietors, partners, and their spouses.
  • Foreign workers (employers cover them under the Employment Injury Scheme).

Remember: Certain employees may be exempt from SOCSO. It's important to stay updated on the latest guidelines.

Understanding SOCSO Contributions

SOCSO contributions are based on a tiered structure . Employers are required to refer to the contribution rate tables published by PERKESO that outline contribution rates based on the employee's monthly wages.

These contributions are shared between the employer and employee, with a portion deducted from the employee's salary.

Contribution Percentage

The employer contribution amount varies depending on the employee's earnings and the type of insurance scheme (Employment Injury Scheme or Invalidity Pension Scheme).

Effective September 1st, 2022, PERKESO has increased the wage ceiling for SOCSO contributions from RM4,000 to RM5,000 per month.

For employees earning more than RM4,000 monthly, you'll need to refer to the updated contribution rates outlined in the Third Schedule of Act 4 and the Second Schedule of Act 800.

For those exceeding RM5,000 monthly, the contribution amount is capped at the new RM5,000 ceiling.

Updated as of March 2024

Rate of contribution for Employees’ Social Security Act 1969 (Act 4)

No Actual monthly wage of the month First Category (Employment Injury Scheme and Invalidity Scheme) Second Category (Employment Injury Scheme)
Employer's Employee's Total Contribution Contribution By Employer Only
1 Wages up to RM30 40 cents 10 cents 50 cents 30 cents
2 When wages exceed RM30 but not exceed RM50 70 cents 20 cents 90 cents 50 cents
3 When wages exceed RM50 but not exceed RM70 RM1.10 30 cents RM1.40 80 cents
4 When wages exceed RM70 but not exceed RM100 RM1.50 40 cents RM1.90 RM1.10
5 When wages exceed RM100 but not exceed RM140 RM2.10 60 cents RM2.70 RM1.50
6 When wages exceed RM140 but not exceed RM200 RM2.95 85 cents RM3.80 RM2.10
7 When wages exceed RM200 but not exceed RM300 RM4.35 RM1.25 RM5.60 RM3.10
8 When wages exceed RM300 but not exceed RM400/td> RM6.15 RM1.75 RM7.90 RM4.40
9 When wages exceed RM400 but not exceed RM500 RM7.85 RM2.25 RM10.10 RM5.60
10 When wages exceed RM500 but not exceed RM600 RM9.65 RM2.75 RM12.40 RM6.90
11 When wages exceed RM600 but not exceed RM700 RM11.35 RM3.25 RM14.60 RM8.10
12 When wages exceed RM700 but not exceed RM800 RM13.15 RM3.75 RM16.90 RM9.40
13 When wages exceed RM800 but not exceed RM900 RM14.85 RM4.25 RM19.10 RM10.60
14 When wages exceed RM900 but not exceed RM1,000 RM16.65 RM4.75 RM21.40 RM11.90
15 When wages exceed RM1,000 but not exceed RM1,100 RM18.35 RM5.25 RM23.60 RM13.10
16 When wages exceed RM1,100 but not exceed RM1,200 RM20.15 RM5.75 RM25.90 RM14.40
17 When wages exceed RM1,200 but not exceed RM1,300 RM21.85 RM6.25 RM28.10 RM15.60
18 When wages exceed RM1,300 but not exceed RM1,400 RM23.65 RM6.75 RM30.40 RM16.90
19 When wages exceed RM1,400 but not exceed RM1,500 RM25.35 RM7.25 RM32.60 RM18.10
20 When wages exceed RM1,500 but not exceed RM1,600 RM27.15 RM7.75 RM34.90 RM19.40
21 When wages exceed RM1,600 but not exceed RM1,700 RM28.85 RM8.25 RM37.10 RM20.60
22 When wages exceed RM1,700 but not exceed RM1,800 RM30.65 RM8.75 RM39.40 RM21.90
23 When wages exceed RM1,800 but not exceed RM1,900 RM32.35 RM9.25 RM41.60 RM23.10
24 When wages exceed RM1,900 but not exceed RM2,000 RM34.15 RM9.75 RM43.90 RM24.40
25 When wages exceed RM2,000 but not exceed RM2,100 RM35.85 RM10.25 RM46.10 RM25.60
26 When wages exceed RM2,100 but not exceed RM2,200 RM37.65 RM10.75 RM48.40 RM26.90
27 When wages exceed RM2,200 but not exceed RM2,300 RM39.35 RM11.25 RM50.60 RM28.10
28 When wages exceed RM2,300 but not exceed RM2,400 RM41.15 RM11.75 RM52.90 RM29.40
29 When wages exceed RM2,400 but not exceed RM2,500 RM42.85 RM12.25 RM55.10 RM30.60
30 When wages exceed RM2,500 but not exceed RM2,600 RM44.65 RM12.75 RM57.40 RM31.90
31 When wages exceed RM2,600 but not exceed RM2,700 RM46.35 RM13.25 RM59.60 RM33.10
32 When wages exceed RM2,700 but not exceed RM2,800 RM48.15 RM13.75 RM61.90 RM34.40
33 When wages exceed RM2,800 but not exceed RM2,900 RM49.85 RM14.25 RM64.10 RM35.60
34 When wages exceed RM2,900 but not exceed RM3,000 RM51.65 RM14.75 RM66.40 RM36.90
35 When wages exceed RM3,000 but not exceed RM3,100 RM53.35 RM15.25 RM68.60 RM38.10
36 When wages exceed RM3,100 but not exceed RM3,200 RM55.15 RM15.75 RM70.90 RM39.40
37 When wages exceed RM3,200 but not exceed RM3,300 RM56.85 RM16.25 RM73.10 RM40.60
38 When wages exceed RM3,300 but not exceed RM3,400 RM58.65 RM16.75 RM75.40 RM41.90
39 When wages exceed RM3,400 but not exceed RM3,500 RM60.35 RM17.25 RM77.60 RM43.10
40 When wages exceed RM3,500 but not exceed RM3,600 RM62.15 RM17.75 RM79.90 RM44.40
41 When wages exceed RM3,600 but not exceed RM3,700 RM63.85 RM18.25 RM82.10 RM45.60
42 When wages exceed RM3,700 but not exceed RM3,800 RM65.65 RM18.75 RM84.40 RM46.90
43 When wages exceed RM3,800 but not exceed RM3,900 RM67.35 RM19.25 RM86.60 RM48.10
44 When wages exceed RM3,900 but not exceed RM4,000 RM69.15 RM19.75 RM88.90 RM49.40
45 When wages exceed RM4,000 but not exceed RM4,100 RM70.85 RM20.25 RM91.10 RM50.60
46 When wages exceed RM4,100 but not exceed RM4,200 RM72.65 RM20.75 RM93.40 RM51.90
47 When wages exceed RM4,200 but not exceed RM4,300 RM74.35 RM21.25 RM95.60 RM53.10
48 When wages exceed RM4,300 but not exceed RM4,400 RM76.15 RM21.75 RM97.90 RM54.40
49 When wages exceed RM4,400 but not exceed RM4,500 RM77.85 RM22.25 RM100.10 RM55.60
50 When wages exceed RM4,500 but not exceed RM4,600 RM79.65 RM22.75 RM102.40 RM56.90
51 When wages exceed RM4,600 but not exceed RM4,700 RM81.35 RM23.25 RM104.60 RM58.10
52 When wages exceed RM4,700 but not exceed RM4,800 RM83.15 RM23.75 RM106.90 RM59.40
53 When wages exceed RM4,800 but not exceed RM4,900 RM84.85 RM24.25 RM109.10 RM60.60
54 When wages exceed RM4,900 but not exceed RM5,000 RM86.65 RM24.75 RM111.40 RM61.90
55 When wages exceed RM5,000 RM86.65 RM24.75 RM111.40 RM61.90

Rate of Contribution Self-Employment Social Security Scheme(Act 789)

No. Insured Monthly Earning Contribution Payment Per Month Contribution Payment Per Year
1 RM1,050 RM13.10 RM157.20
2 RM1,550 RM19.40 RM232.80
3 RM2,950 RM36.90 RM442.80
4 RM3,950 RM49.40 RM592.80

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By understanding SOCSO's role and ensuring proper registration and contributions, you can empower your HR department to provide a secure and well-protected work environment for your employees in Malaysia.

Stay informed! This guide provides a basic overview only. Refer to SOCSO's official website for comprehensive details and updates.