In Plain English: SOCSO for Businesses in Malaysia

Thanks for dropping by our 2nd edition of In Plain English, a blog series where we lay out in easy-to-read terms the numbers and regulations involving statutory laws. This time, we discuss SOCSO for your business in Malaysia.

Social Security Organisation (SOCSO), aka PERKESO (Pertubuhan Keselamatan Sosial)

is the national body in Malaysia that oversees two social security schemes—the Employment Injury Scheme and the Invalidity Scheme. The Employment Injury Scheme provides protection for employees against work-related accidents or detriment, such as  falling and injuring oneself while at work. The Invalidity Scheme provides 24-hour coverage against invalidity or death due to any cause.

All employers in Malaysia are required to register their business as well as their employees with SOCSO. A monthly contribution must be made by both employer and employees according to the percentage stipulated by the government (more on that in a bit).

Who is or isn’t included in SOCSO’s social security schemes?

Included in SOCSONOT included in SOCSO
– those under a contract of service or apprenticeship in the private sector
– contractual or temporary staff of Federal / State Government as well as Federal / State Statutory Bodies
– spouse/s of a sole proprietor or partners
– all legal foreign workers, excluding domestic workers and including expatriates (under Employment Injury Scheme)
– federal and State Government permanent employees
– domestic servants
– self-employed
– sole proprietor or owners of partnership

Note that all eligible Malaysian citizens and permanent resident employees must be registered. Their contribution will be capped at a monthly remuneration of RM4,000.00.

Who needs to contribute to these schemes?

Both the employer and employee are required to contribute to the Employment Injury Scheme and the Invalidity Scheme.

Contribution rates

Employment Injury and Invalidity Scheme
(For employees who are less than 60 years of age only)

Employer’s ContributionEmployee’s Contribution
1.75% of the employee’s monthly wages0.5% of the employee’s monthly wages

Note: All employees who have not reached the age of 60 must contribute under the First Category, except for those who have attained 55 years of age and have had no prior contributions before they reach 55 due to non-eligibility under the Employees’ Social Security Act, 1969.

Employment Injury Scheme

(For employees aged 60 and above only)

Employer’s ContributionEmployee’s Contribution
1.25% of the employees’ monthly wagesN/A

Any employee aged 60 and above must be covered under this Employment Injury Scheme only.

Talenox calculates SOCSO automatically

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Talenox Malaysia comes with contribution rates for Malaysia’s Employees Provident Fund (EPF), SOCSO (Social Security Organisation), Monthly Tax Deduction (MTD) and other statutory tax ordinance. Sign up for a free 30-day trial to try out all the features and integrations!

Read more about Talenox Malaysia here!

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