What is SOCSO? A Simple Guide for Employers

When running a business in Malaysia, employers have more responsibilities than just paying salaries.

They also need to contribute to social security, which helps protect employees if they get injured at work, become disabled, or lose their jobs.

One of the key contributions employers must make is to SOCSO.

But what exactly is SOCSO, and why is it important?

This guide will explain everything employers need to know, including who needs to contribute, what benefits SOCSO provides, and what happens if an employer fails to make payments.

What is SOCSO?

SOCSO (Social Security Organization), also known as PERKESO (Pertubuhan Keselamatan Sosial), is a government agency under the Ministry of Human Resources.

It was set up in 1971 under the Employees' Social Security Act 1969 to provide financial protection for employees.

SOCSO helps workers by giving financial aid if they get injured at work, become disabled, death, or lose their jobs.

This is done through two main schemes:

Employment Injury Scheme (EIS), covers workers in case of workplace accidents, diseases, death, caused by their job, or accidents while traveling to work.
Invalidity Scheme, provides financial help for employees who become permanently disabled due to non-work-related health issues.

Employers must register all eligible employees with SOCSO and make monthly contributions to keep them protected.

Who Needs to Contribute to SOCSO?

As an employer, you must register your business and employees under SOCSO and make monthly contributions.

You need to deduct the right amount from your employees’ salaries and send the payments on time.

All Malaysian and permanent resident employees must be registered under SOCSO if they earn less than RM6,000 per month.

This includes full-time, part-time, and temporary workers.

Starting from July 1, 2024, foreign workers must also be covered under SOCSO, meaning employers must contribute for them too.

Not all workers need to contribute to SOCSO. The following are not required to be covered:

Government employees (they have a separate pension system)
Domestic workers, such as maids and personal drivers
Self-employed individuals, except those who choose Self-Employment Social Security Scheme (SESSS)
Business owners or company partners

Types of SOCSO Benefits

SOCSO provides several benefits to protect employees in case of accidents, disabilities, or job loss.

1. Employment Injury Scheme (EIS)

This covers employees who get injured while working or develop a health problem due to their job. It includes:

Medical costs for treatment
Temporary disability benefits (if the worker needs time off to recover)
Permanent disability benefits (if the worker cannot return to work)
Financial aid for dependents if the employee dies from a work-related accident

2. Invalidity Scheme

This scheme covers long-term disabilities or serious illnesses that are not related to work.

Employees who become permanently disabled can get:

A monthly pension based on their last salary
Financial support for their family if they pass away
Rehabilitation services to help them recover

3. Self-Employment Social Security Scheme (SESSS)

Freelancers, gig workers, and self-employed individuals can choose to contribute to this scheme to get similar protections as regular employees.

This is commonly used by ride-hailing and food delivery riders.

4. Employment Insurance System (EIS)

EIS provides financial aid to workers who lose their jobs due to retrenchment, company closure, or bankruptcy. Workers under this scheme can receive:

Monthly financial support for up to 6 months
Job search and training programs
Career guidance and job-matching services

What is SOCSO Contribution?

SOCSO (Social Security Organization) contribution is a mandatory payment by employers and employees in Malaysia to provide social security protection

SOCSO contributions are calculated based on an employee’s monthly wages. The rate is shared between the employer and employee.

Salary Range (RM)	Employer Contribution (%)	Employee Contribution (%)	Total Contribution (%)
Up to 30,000	1.75%	0.5%	2.25%

Employers contribute 1.75% of the employee’s salary.
Employees contribute 0.5% of their salary.

For employees earning above RM30,000 per month, the contribution rate is capped at a fixed amount.

The exact amount depends on the employee’s salary based one this updated SOCSO Contribution Rate.

What is the SOCSO number?

The SOCSO number is a special ID given to employees under the SOCSO scheme.

It helps track payments, benefits, and claims for social security programs like the Employment Injury Scheme and the Invalidity Pension Scheme.

This number stays the same even if an employee changes jobs.

Employers also get a different Employer Code, which they need to make monthly payments.

Employers can check their employees’ SOCSO number in the following ways:

SOCSO Assist Portal – Login to PERKESO Assist.
SOCSO Office – Visit the nearest PERKESO office.
Customer Service – Call PERKESO hotline at 1-300-22-8000.
Payslip/Employment Documents – Check previous records.

For Malaysian citizens, their SOCSO number is the same as their IC number.

What happens if an employer fails to contribute SOCSO?

Employers must pay SOCSO contributions on time every month. If they don’t, they could face:

Legal action with fines up to RM10,000, imprisonment up to two years, or both
Interest on Late Payment Contributions (ILPC) at 6% per annum or a minimum RM5 per month (SOCSO)
Possible compound notices for late registration, missing records, or delayed accident reporting, requiring settlement within 14 days to avoid prosecution (SOCSO).

To avoid problems, businesses should always pay SOCSO on time.

FAQ

Is SOCSO mandatory in Malaysia?

Yes, all employers must register and contribute to SOCSO for eligible employees.

Can foreigners contribute to SOCSO?

Yes, from July 1, 2024, employers must make SOCSO contributions for foreign workers.

How to check my SOCSO contribution history?

You can check through payslips, the PERKESO website, or by calling the SOCSO hotline.

What is the difference between EPF and SOCSO?

EPF is for retirement savings, while SOCSO provides financial help for injuries, disabilities, and job loss.

How long does it take for SOCSO to process claims?

Processing time varies, but it usually takes between two weeks to a few months.

By contributing to SOCSO, employers help protect their workers against unexpected financial hardship due to accidents, illnesses, or job loss.

Employers who understand what SOCSO is and how it works can build a more responsible and supportive workplace for their employees.

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