Malaysia’s Social Security Organization (SOCSO), known in Malay as Pertubuhan Keselamatan Sosial (PERKESO), is a government body that provides social security protection to employees and their dependents by gathering resources, sharing risk, and compensating lost income. Through these initiatives, employees are financially insured against accidents, disabilities, or illnesses, allowing them to focus more on recovery.
Employers who engage one or more employees have the responsibility to register and contribute to the Social Security Organization according to the rates specified in the Employees’ Social Security Act 1969 and the Employment Insurance System Act of 2017, which is administered by PERKESO. Failure to do so can result in employers having to pay fines or serve prison time.
Employers are required to register with SOCSO within 30 days from the day they start employing their first batch of staff. So, how to register? Let’s get straight to the point.
Register SOCSO as an employer physically at a SOCSO counter
The first step in registering for SOCSO is to fill in the following forms:
For domestic workers, replace Form 2 with:
For foreign workers, replace Form 2 with:
Note: Forms SIP 1 & 2 are not required for foreign workers.
Form 1 requires two copies of the following supplementary documents to be submitted along with it:
- Forms 9 & 49 (Limited Liability Company)
- Forms A & D (Sole proprietor/partnership company)
Form 1 requires multiple supporting documents to be submitted alongside it. These supporting documents will depend on the type of business entity you are operating, be it a limited liability company or a sole proprietor/partnership company. You can see what documents are required by reviewing the checklist provided by SOCSO.
Afterwards, the employer may submit all completed forms and the employer declaration letter to the SOCSO office closest to them and the successful applicant will be issued an Employer’s Code Number.
Register for SOCSO via Online Application
If you would like to register your employer via online application, you first have to register ASSIST account. Here are the steps:
How to Register ASSIST Portal ID?
Kindly fill the Portal ID Enrolment Form and email to idportal@perkeso.gov.my to get the temporary password to log into ASSIST portal. The form can be downloaded here.
After you have registered for the Portal ID, you can then proceed with the employer registration on PORTAL ASSIST.
Kindly follow the steps below to register yourself as a new employer:
Step 1: Register Employer
At the ASSIST portal, go to “My Sites” and select “Registration” in the dropdown menu. From there, click the “Update” button and choose the “Update Employer Information” tab. It will take you to a form where you need to key in your business details and industry information. At first glance, the form may seem a bit daunting and tedious to fill in. But, if you follow this simple guide, you should have no trouble getting yourself set up for SOCSO.
If you have an Allotment Employment Code (AEC), select “Yes” and choose between “Enforcement” or “Benefit” under the AEC Source section. Otherwise, select “No” and move on to the Business Entity section.
Select which business and sub-business entities describe your company. For example, if you’re operating a “Sendirian Berhad” business, select “Corporation” under the “Business Entity” field and “Sendirian Berhad” under the “Sub-Business Entity” field. Refer to this SOCSO user guide for more information on choosing your business entity.
Input your business registration number (BRN) and indicate whether you have registered with the Companies Commission of Malaysia (SSM) before or from February 2017 onwards. If your business is a branch of a larger company, select “Yes” in the “Registering As A Branch” section. Once that is done, tick the checkbox to acknowledge that the information given is correct.
(For those looking to start their own business, we’ve got some articles that explain what you need to do to form a Sendirian Berhad or a Limited Liability Partnership company. We also suggest going through this article that gives you a full rundown on what you need to know when starting a company.)
Fill in your industry details, such as your employer name, postal address, industry code, and preferred method of SOCSO contribution. If your business is located in Sabah or Sarawak, you should fill out your Window Delivery Ticket (WDT) as well.
Once you are finished filling out your employer registration form, click “Save and Continue”. You can then move on to Step 2.
Step 2: Add New Employees
From the update drop-down menu, head to the Update Add Employee page and click on the “Add Employee” button under the “New Employee(s) Listing” section. Just like with the employer registration form, you will be directed to a form where you need to fill up your employees’ particulars. This includes their name, identification number, and employment start date. To ensure a seamless registration process, we advise maintaining a complete record of all your employees. We’ll explain more about that part later.
For a more detailed explanation of registering your employees, read our article here.
Step 3: Upload Supporting Documents
The final step is to upload all of the supporting documents. To start, click on the “Add Document Button”. Once that is done, upload Form 1, Form 2, SIP 1 Form, SIP 2 Form, Employer's IC copy, and the SSM Registration Document.
For each document, select the Description from the drop-down menu and write down any remarks if there are any. Once all of the documents are uploaded, select Save and Continue. That’s it. You’re ready to contribute to your employees’ SOCSO schemes.
SOCSO Rate of Contribution
Under the Employees' Social Security Act 1969, employers need to pay a certain percentage from both their share and employees' wages every month. These contributions are divided into two types, which are the First Category and the Second Category.
The First Category covers employees under the age of 60. In this category, the contribution rates for both employers and employees are 1.75% and 0.5%, respectively.
Meanwhile, the Second Category covers employees aged 55 and above who have not contributed due to being exempted from the SOCSO scheme. In this category, employers should deduct 1.25% of employees’ monthly wages into their accounts.
To find out how much you should be contributing, you can refer to the monthly contribution table on SOCSO’s official website.
Managing Employee Records for SOCSO
Form 2 requires employers to fill up their workers’ personal and employment details to ensure no one is left out from receiving their due compensation. Therefore, companies must keep a complete record of their workers’ personal and employment information. All records should include the following details:
Name of the employee
Identification number
Date of joining the company
Job title
Amount of SOCSO contribution per month
Type of employee contribution
Monthly wages of the employee
Company allowance or bonus (If applicable)
Employers are also advised to keep all SOCSO contribution data within the past seven years of an employee’s recruitment into the company for recording purposes.
How Wages are Defined When Paying Employees’ SOCSO Accounts?
According to SOCSO, wages are defined as “any remuneration payable in money to an employee”. In simple terms, wages are a form of payment given to employees in exchange for workers’ services. Wages can be paid hourly, daily, weekly, or for each completed task.
For SOCSO contributions, the following are considered to be part of employees’ wages:
Salary
Overtime payments
Commission and service charge
Payments for annual, sick, or maternity leave
Allowances such as incentives, shifts, meals, cost of living, and housing
However, not all payments made to employees are considered wages and are, therefore, not counted in SOCSO contributions. These include:
Payments to an employee’s statutory fund (EPF, SOCSO, EIS)
Mileage claims
Gratuity payments or payments for dismissal or retrenchments
Annual bonus
Final Thoughts
By following these steps, you can ensure compliance with SOCSO registration requirements for employers. If you encounter any difficulties or have questions during the registration process, don’t hesitate to contact SOCSO for assistance.
We are more than willing to help you manage your compliance with SOCSO and other areas of your business so that you can focus on your growth. If you need assistance with accounting, auditing, or business consultancy, feel free to contact us at: https://wa.me/6012227033560.
FAQ
How to get a refund from SOCSO?
In cases where you accidentally overpaid your monthly SOCSO contribution, you can submit a claim via the PERKESO ASSIST Portal. Just head to the “My Sites” page and select “Refund Application - PKS(K)50” from the BBC drop-down menu. Fill in the necessary particulars and click “Save and Continue” when you are done.
Next, check your refund information at the “Refund Details - PKS(K)50” tab and see if there are any missing or wrong particulars. From there, click on the “Add” button to fill in any missing information or click on the pencil icon on any refund item if you need to edit certain details.
Once you have verified the details, you can upload your business registration document and a copy of your IC. Make sure to do a final check on all your details at the “Preview” tab before submitting the refund claim.
Can employees claim SOCSO after resignation?
In certain events, such as when a person is considered invalid by the Medical Board or Appellate Medical Board, a worker can receive SOCSO benefits after resigning.
However, workers who voluntarily resign or retire from the company cannot claim anything from their SOCSO schemes.
How can an employee claim SOCSO for loss of employment?
Employees who have lost their jobs can claim Employment Insurance System (EIS) benefits from SOCSO online at the EIS portal or via the nearest PERKESO office. To apply, employees should prepare a copy of their IC, proof of loss of employment like a termination letter, a copy of their bank account information, and payslips from the last six months.
Other supporting documents are also required depending on the benefit the employee is applying for.
Is SOCSO paid by the employer?
SOCSO contributions are paid out of both employers’ shares and employees’ monthly wages. All employers are required to pay on behalf of each employee every month.
Can I claim SOCSO for illness?
Employees can claim SOCSO for diseases resulting from their occupations as described in the Fifth Schedule of the Employees’ Social Security Act 1969. This can include loss of hearing due to excessive noise or asthma caused by dust or other harmful chemicals in your work area.
Employees need to fill out the Occupational Diseases section of Form 34, the Medical Report on Occupational Diseases, and their Salary/Contribution Statement when submitting their claim.
How is SOCSO calculated from salary?
SOCSO calculations depend on which category workers fall under. For workers under the First Category (below 60 years), 0.5% of their wages will be deducted. As for workers under the Second Category, 1.25% of their wages will be deducted for SOCSO contributions.
In September 2022, SOCSO increased the wage ceiling from RM4,000 to RM5,000. The contribution amount for wages exceeding the RM4,000 mark is outlined in the Third Schedule, Act 4 and the Second Schedule, Act 800.
How to register SOCSO for foreign workers?
The process for registering foreign workers for SOCSO is almost the same as registering local workers where you will need to fill in all of the employees’ particulars, like their nationality, passport number, and working permit number. The only difference is that you will need to select the “Add Foreign Employee” button underneath the “New Foreign Employee(s) Listing” to start the registration process.
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