In Plain English: SOCSO for Businesses in Malaysia

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(Editor’s Note: ‘SOCSO for Businesses in Malaysia‘ was published on 23 Jan 2019, and last updated on 12 July 2021.)

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.

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

SOCSO/PERKESO is the national body in Malaysia that oversees two social security schemes:

  • The Employment Injury Scheme. It provides protection for employees against work-related accidents or detriment, such as  falling and injuring oneself while at work.
  • The Invalidity Scheme, which provides 24-hour coverage against invalidity or death due to any cause.

The Ministry of Human Resources (formerly known as Ministry of Labour) established these schemes to grant social security protections to all workers in Malaysia.

All employers in Malaysia need to register their business as well as their employees with SOCSO under the Employees’ Social Security Act, 1969 (henceforth refer as Act). Both employer and employee must make a monthly contribution according to the percentage stipulated by the government (more on that in a bit).

Who is included in SOCSO’s social security schemes?

Included in SOCSONOT included in SOCSO
– Employees under a contract of service or apprenticeship in the private sector
– Employees under the Federal / State Government or Statutory Bodies
– Spouse(s) of a sole proprietor or partners
– All legal foreign workers, including expatriates (under Employment Injury Scheme)
– Federal and State Government permanent employees
– Domestic servants
– Self-employed
– Sole proprietor or owners of partnership



On top of that, SOCSO’s coverage is only for employees who are Malaysian citizens and permanent residents.

Employees with a monthly earning of more than RM3,000 who never registered or contributed to SOCSO have the option to be covered under the Act.

However, employees with a monthly salary of RM3,000 or less must contribute to SOCSO. Should these same employees earn more than RM3,000 later, they must continue to contribute to SOCSO. This is in line with the principle of “Once In Always In” under the First Schedule of the Act. In other words, once an employee is eligible under the Act, he/she will always be eligible for coverage irrespective of his/her next monthly wage.

Note that all Malaysian citizens and permanent resident employees that are eligible under the Act must be registered. All in all, 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.

What is the deadline for SOCSO contributions?

A company must remit its SOCSO contribution payment to SOCSO offices no later than the last day of the following month. For example, contribution for the month of April 2021 must be paid not later than 31th May 2021.

What are the contribution rates?


Rate of Contributions
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 RM50 70 cents 20 cents 90 cents 50 cents
3. When wages exceed RM50 but not RM70 RM1.10 30 cents RM1.40 80 cents
4. When wages exceed RM70 but not RM100 RM1.50 40 cents RM1.90 RM1.10
5. When wages exceed RM100 but not RM140 RM2.10 60 cents RM2.70 RM1.50
6. When wages exceed RM140 but not RM200 RM2.95 85 cents RM3.80 RM2.10
7. When wages exceed RM200 but not RM300 RM4.35 RM1.25 RM5.60 RM3.10
8. When wages exceed RM300 but not RM400 RM6.15 RM1.75 RM7.90 RM4.40
9. When wages exceed RM400 but not RM500 RM7.85 RM2.25 RM10.10 RM5.60
10. When wages exceed RM500 but not RM600 RM9.65 RM2.75 RM12.40 RM6.90
11. When wages exceed RM600 but not RM700 RM11.35 RM3.25 RM14.60 RM8.10
12. When wages exceed RM700 but not RM800 RM13.15 RM3.75 RM16.90 RM9.40
13. When wages exceed RM800 but not RM900 RM14.85 RM4.25 RM19.10 RM10.60
14. When wages exceed RM900 but not RM1,000 RM16.65 RM4.75 RM21.40 RM11.90
15. When wages exceed RM1,000 but not RM1,100 RM18.35 RM5.25 RM23.60 RM13.10
16. When wages exceed RM1,100 but not RM1,200 RM20.15 RM5.75 RM25.90 RM14.40
17. When wages exceed RM1,200 but not RM1,300 RM21.85 RM6.25 RM28.10 RM15.60
18. When wages exceed RM1,300 but not RM1,400 RM23.65 RM6.75 RM30.40 RM16.90
19. When wages exceed RM1,400 but not RM1,500 RM25.35 RM7.25 RM32.60 RM18.10
20. When wages exceed RM1,500 but not RM1,600 RM27.15 RM7.75 RM34.90 RM19.40
21. When wages exceed RM1,600 but not RM1,700 RM28.85 RM8.25 RM37.10 RM20.60
22. When wages exceed RM1,700 but not RM1,800 RM30.65 RM8.75 RM39.40 RM21.90
23. When wages exceed RM1,800 but not RM1,900 RM32.35 RM9.25 RM41.60 RM23.10
24. When wages exceed RM1,900 but not RM2,000 RM34.15 RM9.75 RM43.90 RM24.40
25. When wages exceed RM2,000 but not RM2,100 RM35.85 RM10.25 RM46.10 RM25.60
26. When wages exceed RM2,100 but not RM2,200 RM37.65 RM10.75 RM48.40 RM26.90
27. When wages exceed RM2,200 but not RM2,300 RM39.35 RM11.25 RM50.60 RM28.10
28. When wages exceed RM2,300 but not RM2,400 RM41.15 RM11.75 RM52.90 RM29.40
29. When wages exceed RM2,400 but not RM2,500 RM42.85 RM12.25 RM55.10 RM30.60
30. When wages exceed RM2,500 but not RM2,600 RM44.65 RM12.75 RM57.40 RM31.90
31. When wages exceed RM2,600 but not RM2,700 RM46.35 RM13.25 RM59.60 RM33.10
32. When wages exceed RM2,700 but not RM2,800 RM48.15 RM13.75 RM61.90 RM34.40
33. When wages exceed RM2,800 but not RM2,900 RM49.85 RM14.25 RM64.10 RM35.60
34. When wages exceed RM2,900 but not RM3,000 RM51.65 RM14.75 RM66.40 RM36.90
35. When wages exceed RM3,000 but not RM3,100 RM53.35 RM15.25 RM68.60 RM38.10
36. When wages exceed RM3,100 but not RM3,200 RM55.15 RM15.75 RM70.90 RM39.40
37. When wages exceed RM3,200 but not RM3,300 RM56.85 RM16.25 RM73.10 RM40.60
38. When wages exceed RM3,300 but not RM3,400 RM58.65 RM16.75 RM75.40 RM41.90
39. When wages exceed RM3,400 but not RM3,500 RM60.35 RM17.25 RM77.60 RM43.10
40. When wages exceed RM3,500 but not RM3,600 RM62.15 RM17.75 RM79.90 RM44.40
41. When wages exceed RM3,600 but not RM3,700 RM63.85 RM18.25 RM82.10 RM45.60
42. When wages exceed RM3,700 but not RM3,800 RM65.65 RM18.75 RM84.40 RM46.90
43. When wages exceed RM3,800 but not RM3,900 RM67.35 RM19.25 RM86.60 RM48.10
44. When wages exceed RM3,900 but not RM4,000 RM69.05 RM19.75 RM88.80 RM49.40
45. When wages exceed RM4,000 RM69.05 RM19.75 RM88.80 RM49.40

Employment Injury and Invalidity Scheme

(For employees who are less than 60 years of age only)


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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.

 *The monthly contribution is subject to the ceiling of the insured wage of RM4,000.00 per month.

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

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!

What are the steps to contribute SOCSO?

An employer can pay its SOCSO contributions through the following methods:

  1. Manually submission of preprinted SOCSO Contribution Form (Borang Caruman Bulanan/Borang 8A) to any of the following banks:
    • CIMB Bank Berhad
    • Malayan Banking Berhad
    • RHB Bank Berhad
    • Public Bank Berhad
    • Bank Muamalat
    • Pejabat Pos Malaysia (for Sabah & Sarawak only).
  2. Submission via Internet Banking, if the employer is registered and has an account with any of the following banks:
    • Malayan Banking Berhad
    • CIMB Bank Berhad
    • RHB Bank Berhad
    • Public Bank Berhad
  3. Cheque payment or postal money order at SOCSO office, especially for employers who submit contribution records through computer diskette/tape.
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