How to Use the PERKESO/SOCSO Calculator for Employee Contributions

If you’re running a business in Malaysia, you’ve probably heard of SOCSO or PERKESO. It’s one of those things employers must handle every month without fail. 

But between all the salary slips, invoices, and tax documents, figuring out exactly how much to contribute to SOCSO can get tricky.

That’s why many business owners and HR teams rely on the PERKESO/SOCSO calculator to get it right. 

This article will help you understand how the calculator works and why it’s so useful for employers.

What is PERKESO / SOCSO Contribution?

SOCSO, officially termed PERKESO (Pertubuhan Keselamatan Sosial), provides social security protection to Malaysian employees through two primary schemes:

1. Employment Injury Scheme: Offers coverage for workplace accidents, occupational diseases, and commuting accidents.

2. Invalidity Scheme: Provides financial assistance for permanent disability or death due to any cause, irrespective of its relation to employment.

Employers are mandated to contribute to SOCSO on behalf of their employees.

Contribution rates are determined based on salary brackets and are specified in the official contribution schedule. Notably:

• Local Employees: Both employer and employee contribute monthly. For employees under 60 years old, the employer's share is 1.75% of the employee's monthly wages, while the employee contributes 0.5%.

• Foreign Workers: Only the employer contributes, covering the Employment Injury Scheme at a rate of 1.25% of the employee's monthly wages.

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

How to Calculate SOCSO Contribution?

Calculating SOCSO contributions involves determining the respective percentages for both the employer and the employee based on the employee's monthly salary.

Here's a step-by-step guide:

1. Determine the employee's gross monthly earnings, including basic salary, overtime, commissions, and other relevant payments.

2. Refer to the SOCSO contribution table. The table outlines the exact contribution amounts corresponding to various salary ranges. For instance:

   • For a monthly wage exceeding RM1,000 but not RM1,100:

     • Employer's contribution: RM18.35

     • Employee's contribution: RM5.25

     • Total contribution: RM23.60

3. Apply the rates from the contribution table to the employee's monthly salary to determine both the employer's and employee's contributions.

Example calculation: An employee earning RM4,200 per month.

• Employer's Contribution: RM4,200 × 1.75% = RM73.50

• Employee's Contribution: RM4,200 × 0.5% = RM21.00

• Total SOCSO Contribution: RM94.50

How to Use SOCSO Contribution Calculator

To streamline the calculation process, PERKESO offers an online Contribution Calculator. Here's how to use it:

1. Visit the official PERKESO website and navigate to the Contribution Calculator section. Or you can just click this link.

2. Enter the employee's monthly salary and select the appropriate category (e.g., age group, local or foreign worker).

3. The calculator will display the exact contribution amounts for both employer and employee.

Other than PERKESO’s, you can also use Payroll Panda’s SOCSO Contribution Calculator in this link. The steps are the same as PERKESO’s.

After you calculate it, utilize the SOCSO Contribution Table to cross-reference and compute contributions based on salary brackets.

When should SOCSO contributions be paid?

SOCSO contributions must be remitted by the 15th of the following month. For example, contributions for September should be paid by October 15th.

Timely payments are crucial to avoid penalties and maintain compliance with Malaysian labor laws.

What is the easiest way to calculate SOCSO contributions?

The most straightforward method is to use the PERKESO Contribution Calculator available on their official website.

This tool provides accurate calculations and reduces the likelihood of errors.

Additionally, payroll software solutions often integrate SOCSO calculation features, further simplifying the process.

Who is covered by SOCSO?

SOCSO coverage extends to:

• Malaysian Citizens and Permanent Residents: All employees under 60 years old, earning wages, are required to contribute.

• Foreign Workers: Covered under the Employment Injury Scheme, with contributions made solely by the employer.

Do part-time employees need to contribute to SOCSO?

Yes, part-time employees are subject to SOCSO contributions if they earn a monthly wage of RM30 or more. The contribution rates are applied based on their earnings, similar to full-time employees.

Can I opt out of SOCSO coverage in Malaysia?

No, SOCSO contributions are mandatory for eligible employees. There is no provision for opting out, as these contributions provide essential social security benefits.

FAQ

How do I check my SOCSO contribution online?

Employers and employees can check contribution records through the PERKESO Assist Portal by registering and logging into their accounts.

What is the employer’s SOCSO contribution percentage?

For employees under 60 years old, the employer contributes 1.75% of the employee's monthly wages. For employees aged 60 and above, the employer's contribution is 1.25%.

Are SOCSO contributions tax-deductible?

Yes, SOCSO contributions made by employers are deductible expenses under Malaysian tax laws.

What happens if I miss my SOCSO payment?

Late payments may result in penalties and interest charges. It's essential to remit contributions by the 15th of the following month to avoid such issues.

How do foreign workers contribute to SOCSO?

Foreign workers are covered under the Employment Injury Scheme, with contributions made solely by the employer at a rate of 1.25% of the employee's monthly wages.

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