SOCSO in Malaysia refers to the statutory social security scheme designed to protect employees against risks arising from work. Therefore, it provides financial protection and benefits for employees who suffer incidents at work, experience employment injury, or become invalid due to illness or accident. Companies are required to register eligible employees and make SOCSO contribution payments each month as part of their statutory responsibilities.
At the same time, as part of Malaysia’s social security framework, SOCSO helps protect employees at work while supporting organizations in maintaining compliance with labour regulations and contribution requirements.
Table of Contents
- What Is SOCSO in Malaysia?
- What Does SOCSO Protect Employees Against?
- What Are the SOCSO Schemes in Malaysia?
- Who Needs to Contribute to SOCSO?
- How Is SOCSO Contribution Calculated?
- How Do Companies Register and Submit SOCSO Contributions?
- How Do Employees Apply for SOCSO Benefits in Malaysia?
- What Happens If Companies Do Not Comply With SOCSO?
- Conclusion
- Frequently Asked Questions (FAQ)
What Is SOCSO in Malaysia?
SOCSO is a mandatory social security scheme that applies to most private sector employees in Malaysia. In practical terms, it is designed to provide protection when employees are unable to work due to illness, incident, or invalidity arising during their job.
The scheme operates through structured contributions paid by companies and employees. As a result, these contributions fund social security benefits that support employees and their dependants when job-related risks occur. By ensuring continuous coverage, SOCSO helps maintain workforce stability and income security for employees across Malaysia.
What Does SOCSO Protect Employees Against?
SOCSO protects employees against several job-related risks that may affect their ability to work or earn income. In practice, these protections cover both short-term incidents and long-term health conditions.
SOCSO protection includes:
- Incidents sustained while performing work duties
- Employment injury occurring during job-related travel
- Occupational diseases linked to working conditions
- Invalidity caused by illness or accident
- Loss of income due to temporary or permanent disability
By providing social security protection, SOCSO helps employees recover financially while reducing the long-term impact of job-related risks.
What Are the SOCSO Schemes in Malaysia?
SOCSO operates two main schemes that provide social security protection depending on the type of risk faced by employees.
Employment Injury Scheme
The Employment Injury Scheme covers employees who suffer injury, disease, or death arising out of and in the course of work. This includes incidents at the workplace, events during job-related travel, and occupational diseases caused by working conditions.
Benefits under this scheme may include medical care, temporary disablement payments, permanent disablement payments, and dependants’ benefits. Employees who experience employment injury may submit an application through their company for assessment.
Invalidity Scheme
The Invalidity Scheme provides protection for employees who become permanently invalid due to illness or accident not related to work. Put simply, invalidity refers to a condition that significantly affects an employee’s ability to earn income.
This scheme provides invalidity pension, invalidity grant, and survivors’ benefits depending on eligibility and contribution history. It ensures long-term social security support for affected employees and their families.
Who Needs to Contribute to SOCSO?
SOCSO contribution is mandatory for most private sector companies and employees in Malaysia. Organizations are responsible for ensuring eligible employees are registered and covered under the appropriate scheme from the start of their job.
Company responsibilities include:
- Registering employees for SOCSO coverage
- Calculating contribution amounts accurately
- Submitting payments on time
- Updating job details when changes occur
Employees contribute a portion of the SOCSO contribution through payroll deductions, while companies contribute their share based on prescribed rates.
How Is SOCSO Contribution Calculated?
SOCSO contribution is calculated based on an employee’s wages. Contribution rates are determined according to wage brackets and the applicable SOCSO scheme.
Contribution amounts consist of:
- Company contribution portion
- Employee contribution portion
Accurate calculation is essential to ensure employees receive proper social security protection. Companies should ensure that wages, allowances, and job information are correctly reflected in payroll processing to avoid discrepancies.
How Do Companies Register and Submit SOCSO Contributions?
Companies in Malaysia can register and submit SOCSO contributions through the PERKESO ASSIST Portal. This online system allows organizations to manage company registration, employee registration, and contribution submissions in one place.
SOCSO Registration Steps
To register for SOCSO, companies should follow these steps:
- Register the company and employees through the PERKESO ASSIST Portal
- Obtain a SOCSO reference number issued upon registration
- Begin submitting contribution details through the online system
Completing these steps ensures employees are properly registered and protected under the social security scheme from the start of their job.
SOCSO Contribution Submission Deadlines
SOCSO contributions must be submitted on a recurring basis. Companies should take note of the following requirements:
- Contributions must be submitted by the 15th of the following month
- Late submissions may result in penalties, surcharges, or enforcement action
Managing deadlines accurately helps organizations remain compliant and ensures continuous protection for employees.
Automated payroll systems like TimeTec Payroll help companies manage SOCSO registration, contribution calculations, deductions, and submission tracking more efficiently. By syncing employee records, salary updates, and statutory requirements, HR teams can ensure SOCSO, EPF, and EIS submissions are accurate and completed on time throughout the year.
How Do Employees Apply for SOCSO Benefits in Malaysia?
Employees may apply for SOCSO benefits if they suffer an incident at work, experience employment injury, or become invalid due to illness or accident covered under the scheme.
Step-by-Step SOCSO Application Process
Step 1: Report the Incident
Employees should inform their company immediately if an incident occurs during work or job-related activities.
Step 2: Submit Supporting Documents
As a next step, companies are responsible for submitting the required SOCSO forms along with supporting documents such as medical reports, incident details, and job records.
Step 3: Medical Assessment
SOCSO may require medical assessments to verify the condition and determine eligibility under the relevant scheme.
Step 4: Review and Payments
Once approved, SOCSO processes the application and issues benefit payments according to the applicable scheme and eligibility conditions.
This structured process ensures employees receive social security benefits while organizations remain compliant with SOCSO requirements.
What Happens If Companies Do Not Comply With SOCSO?
Failure to comply with SOCSO obligations may result in legal and financial consequences. Non-compliance includes failure to register employees, incorrect contribution calculations, or late submissions.
Possible consequences include:
- Financial penalties or fines
- Backdated contribution payments
- Legal action under labour regulations
- Increased compliance scrutiny
Ensuring SOCSO compliance helps protect employees and supports a stable working environment in Malaysia.
Conclusion
SOCSO plays a crucial role in protecting Malaysia’s workforce under the Employees’ Social Security Act. Timely and accurate contribution payments reflect responsible job practices and help maintain a stable social security scheme for employees across Malaysia.
With an automated payroll system like TimeTec HR, companies can manage statutory deductions such as SOCSO, EPF, EIS, and PCB more accurately and efficiently. Stay compliant, protect your employees, and strengthen Malaysia’s social security framework for a safer and fairer workplace.
Frequently Asked Questions (FAQ)
1. Is SOCSO mandatory in Malaysia?
Yes. SOCSO is mandatory for eligible employees, and companies must manage registration and contribution as part of statutory obligations.
2. Can employees receive SOCSO benefits for work-related incidents?
Yes. Employees who suffer incidents at work or employment injury may apply for benefits under the Employment Injury Scheme.
3. How long does a SOCSO application take?
Processing time varies depending on the type of condition, document completeness, and medical assessment requirements.
4. What happens if SOCSO contribution is missed?
Missed contributions may result in penalties and may affect social security coverage. Companies should rectify missed submissions promptly.