Ever noticed the word SOCSO on your payslip and wondered what it really means? Or perhaps you’ve heard about PERKESO in the news but aren’t sure of its purpose.
SOCSO, short for the Social Security Organization, is a government agency under Malaysia’s Ministry of Human Resources. Established under the Employees’ Social Security Act 1969, it protects employees by providing financial support in cases of workplace injuries, illness, disability, or death.
This contribution is mandatory for most workers in Malaysia and forms part of the national social security scheme. Understanding how it works is not only essential for compliance but also vital for ensuring that employers fulfil their legal duties and employees receive proper protection.
Table of Contents
- What Is SOCSO and Why Does It Matter
- Who Needs to Contribute to SOCSO
- SOCSO Contribution Rates and Categories
- How to Register and Submit SOCSO Contributions
- SOCSO Benefits and Coverage
- Common SOCSO Mistakes Employers Should Avoid
- Conclusion
- Frequently Asked Questions (FAQ)
What Is SOCSO and Why Does It Matter
The government established SOCSO (PERKESO) to strengthen employees’ social security and safeguard the workforce against work-related and non-work-related risks. The agency plays a crucial role in supporting workers and their families through unexpected events such as accidents, illnesses, or income loss.
SOCSO operates two main schemes under the Social Security Act:
- Employment Injury Scheme – covers employees against accidents or occupational diseases that occur during work.
- Invalidity Scheme – provides long-term support for employees who lose earning capacity due to disability or illness, even when not caused by work.
Through these social security schemes, SOCSO continues to provide long-term stability for workers in Malaysia.
Who Needs to Contribute to SOCSO
SOCSO Malaysia requires all Malaysian citizens and permanent residents who receive a monthly salary to contribute. This social security contribution is shared between the employer and employee and automatically deducted via payroll each month.
Employers must register their company and employees with the organization upon hiring. Foreign workers are not required to contribute but may be covered under the Employment Injury Scheme, depending on their work permit status.
This shared responsibility ensures both employers and employees support the country’s social protection system while maintaining compliance with Malaysian labour law.
SOCSO Contribution Rates and Categories
SOCSO contributions are calculated as a percentage of the employee’s monthly wage, divided into two categories:
- Category 1: Employees under 60 years old (covered under both the Employment Injury and Invalidity Schemes).
- Category 2: Employees aged 60 and above (covered only under the Employment Injury Scheme).
The contribution rates are shared between the employer and employee as follows:
| Employee Status | Employer Contribution Rate | Employee Contribution Rate |
| Below 60 years old | 1.75% | 0.5% |
| 60 years and above | 1.25% | 0% |
| Foreign workers | 1.25% | 0% |
These contribution rates may be revised by SOCSO (PERKESO) from time to time in accordance with updates under the Employees’ Social Security Act 1969. Employers should always refer to the latest official contribution table or employer circular published on the PERKESO website, or use the SOCSO calculator to verify accurate payroll deductions and ensure statutory compliance.
Example of SOCSO Contribution Calculation
Let’s say an employee under 60 earns RM4,000 per month.
- Employer contribution: RM4,000 × 1.75% = RM70.00
- Employee contribution: RM4,000 × 0.5% = RM20.00
- Total monthly contribution: RM90.00
This means the employer contributes RM70.00, the employee contributes RM20.00, and a total SOCSO contribution of RM90.00 is submitted to the SOCSO Malaysia each month.
How to Register and Submit SOCSO Contributions
Employers can register and submit contributions easily through the PERKESO ASSIST Portal.
Registration Steps:
- Register the company and employees on the portal.
- Obtain an employer reference or SOCSO number from the organization.
- Begin monthly contribution submissions through the online system.
Submission Deadlines:
- Contributions must be made by the 15th of the following month.
- Late payments may result in penalties or surcharges.
Automated payroll systems like TimeTec Payroll make it easier for employers to handle SOCSO number registration, deductions, and submission tracking. When paired with TimeTec HR, HR administrators can effortlessly manage employee profiles, update contribution details, and sync attendance or salary adjustments, ensuring every SOCSO, EPF, and EIS submission is accurate and on time each month.
SOCSO Benefits and Coverage
SOCSO offers multiple benefits under its protection schemes, such as:
Medical Benefit – covers treatment and hospitalization for work-related injuries.
Temporary Disablement Benefit – provides income replacement during recovery.
Permanent Disablement Benefit – supports employees unable to return to work.
Dependants’ Benefit – offers financial help to families if a covered employee dies due to work.
Funeral Benefit – provides aid for funeral expenses.
Education Loan – helps children of insured employees continue their studies.
These benefits uphold employees’ social security, ensuring that workers and their families are supported through difficult times.
Common SOCSO Mistakes Employers Should Avoid
Even with the best intentions, many employers make mistakes when managing social security contributions. The most common include:
- Missing monthly payment deadlines.
- Using outdated contribution rates.
- Failing to update employee data.
- Forgetting to include part-time or contract employees.
Such errors can cause compliance issues or penalties. Using a reliable payroll system that automates SOCSO, EPF, EIS, and PCB deductions efficiently, keeping employers aligned with the Social Security Act.
Conclusion
SOCSO plays a crucial role in protecting Malaysia’s workforce under the Employees’ Social Security Act. Timely and accurate contributions reflect responsible HR management and help maintain a stable social security scheme for employees and workers alike.
With an automated payroll system like TimeTec Payroll, employers can ensure every statutory deduction like SOCSO, EPF, EIS, and PCB is processed correctly and efficiently. Stay compliant, protect your team, and strengthen Malaysia’s social protection framework for a safer, fairer workplace.
Frequently Asked Questions (FAQ)
1. What is SOCSO in Malaysia?
SOCSO Malaysia, or PERKESO, is the Social Security Organization under the Ministry of Human Resources. It provides employees’ social security through coverage for injury, illness, disability, or death caused by workplace accidents.
2. Who needs to contribute to SOCSO?
Employers must ensure that all Malaysian citizens and permanent residents who earn a monthly salary contribute. Foreign workers are not required to contribute to SOCSO, but may be covered under the Employment Injury Scheme.
3. How much is the SOCSO contribution rate in 2025?
The contribution rate depends on the employee’s salary and category. Employers can use SOCSO Malaysia’s online calculator to check rates or use a payroll system like TimeTec Payroll for automatic deduction.
4. What are the benefits of SOCSO?
SOCSO offers various social security schemes, including medical, disablement, dependants’, and funeral benefits, as well as education loans for insured families.
5. Can payroll software help with SOCSO compliance?
Yes. Payroll software such as TimeTec Payroll automatically calculates and submits SOCSO, EPF, EIS, and PCB contributions, ensuring full compliance with Malaysia’s Social Security Act.