For employer and employees alike, knowing the SOCSO contribution rate are crucial in order to understand the financial obligations they should do and are entitled for.
As we step into 2024, it’s crucial to stay updated with the latest changes and how they impact your financial planning.
Whether you're a seasoned business owner or just entering the workforce, this article will break down everything you need to know about SOCSO contribution rates, ensuring you're well-prepared and compliant with the latest regulations.
SOCSO Contribution Rates 2024
In Malaysia, the Social Security Organization (SOCSO) manages social security schemes, including employee contributions for social protection. Many employers often get confused as much how much needs to be paid and employees are curious how much would they receive.
As of 2024, the SOCSO contribution rates are structured as follows:
Employee Contribution: Employees contribute 0.5% of their monthly salary.
Employer Contribution: Employers contribute 1.75% of the employee’s monthly wage
There are 2 categories for which the SOCSO rates differs. The first category applies only to employees under 60 years old. In the second category, which is calculated at 1.25% of the total monthly salary, employers pay contributions only for the Employment Injury Scheme under SOCSO. This applies to:
Workers aged 60 and above.
Workers hired after turning 55 who contributed to SOCSO before turning 60.
Workers receiving an Invalidity Pension must have current incomes less than 1/3 of their previous monthly wages.
SOCSO Contribution Rates Table/Chart for Category 1 (2024)
Monthly Wage Range (RM) | Employer's Contribution (RM) | Employee's Contribution (RM) | Total Contribution (RM) |
Less than 30 | 0.40 | 0.10 | 0.50 |
30 - 49 | 0.70 | 0.20 | 0.90 |
50 - 69 | 1.10 | 0.30 | 1.40 |
70 - 99 | 1.50 | 0.40 | 1.90 |
100 - 139 | 2.10 | 0.60 | 2.70 |
140 - 199 | 2.95 | 0.85 | 3.80 |
200 - 299 | 4.35 | 1.25 | 5.60 |
300 - 399 | 6.15 | 1.75 | 7.90 |
400 - 499 | 7.85 | 2.25 | 10.10 |
500 - 599 | 9.65 | 2.75 | 12.40 |
600 - 699 | 11.35 | 3.25 | 14.60 |
700 - 799 | 13.15 | 3.75 | 16.90 |
800 - 899 | 14.85 | 4.25 | 19.10 |
900 - 999 | 16.65 | 4.75 | 21.40 |
1000 - 1099 | 18.35 | 5.25 | 23.60 |
1100 - 1199 | 20.15 | 5.75 | 25.90 |
1200 - 1299 | 21.85 | 6.25 | 28.10 |
1300 - 1399 | 23.65 | 6.75 | 30.40 |
1400 - 1499 | 25.35 | 7.25 | 32.60 |
1500 - 1599 | 27.15 | 7.75 | 34.90 |
1600 - 1699 | 28.85 | 8.25 | 37.10 |
1700 - 1799 | 30.65 | 8.75 | 39.40 |
1800 - 1899 | 32.35 | 9.25 | 41.60 |
1900 - 1999 | 34.15 | 9.75 | 43.90 |
2000 - 2099 | 35.85 | 10.25 | 46.10 |
2100 - 2199 | 37.65 | 10.75 | 48.40 |
2200 - 2299 | 39.35 | 11.25 | 50.60 |
2300 - 2399 | 41.15 | 11.75 | 52.90 |
2400 - 2499 | 42.85 | 12.25 | 55.10 |
2500 - 2599 | 44.65 | 12.75 | 57.40 |
2600 - 2699 | 46.35 | 13.25 | 59.60 |
2700 - 2799 | 48.15 | 13.75 | 61.90 |
2800 - 2899 | 49.85 | 14.25 | 64.10 |
2900 and above | 51.65 | 14.75 | 66.40 |
SOCSO Contribution Rates Table/Chart for Category 2 (2024)
Monthly Salary Range (RM) | Employer's Contribution (RM) |
Less than 30 | 0.30 |
30 - 49 | 0.50 |
50 - 69 | 0.80 |
70 - 99 | 1.10 |
100 - 139 | 1.50 |
140 - 199 | 2.10 |
200 - 299 | 3.10 |
300 - 399 | 4.40 |
400 - 499 | 5.60 |
500 - 599 | 6.90 |
600 - 699 | 8.10 |
700 - 799 | 9.40 |
800 - 899 | 10.60 |
900 - 999 | 11.90 |
1000 - 1099 | 13.10 |
1100 - 1199 | 14.40 |
1200 - 1299 | 15.60 |
1300 - 1399 | 16.90 |
1400 - 1499 | 18.10 |
1500 - 1599 | 19.40 |
1600 - 1699 | 20.60 |
1700 - 1799 | 21.90 |
1800 - 1899 | 23.10 |
1900 - 1999 | 24.40 |
2000 - 2099 | 25.60 |
2100 - 2199 | 26.90 |
2200 - 2299 | 28.10 |
2300 - 2399 | 29.40 |
2400 - 2499 | 30.60 |
2500 - 2599 | 31.90 |
2600 - 2699 | 33.10 |
2700 - 2799 | 34.40 |
2800 - 2899 | 35.60 |
2900 and above | 36.90 |
For personalized advice and professional support on SOCSO contributions and other tax-related matters, contact Douglas Loh Local Audit and Tax Firm today! Get in touch now to ensure your business is fully compliant and optimized for success.
What is SOCSO in Malaysia, and why are contributions important?
The Social Security Organization (SOCSO), also known as Pertubuhan Keselamatan Sosial (PERKESO), is a Malaysian government agency under the Ministry of Human Resources established in 1971.
Its primary role is to provide social security protection to employees in the private sector through various schemes aimed at offering financial aid and support in cases of workplace injuries, occupational diseases, emergencies, and death.
SOCSO operates two main schemes:
Employment Injury Scheme: This scheme offers protection against accidents or occupational diseases that occur during employment. It covers accidents that happen while commuting to and from work, industrial accidents, and occupational illnesses.
Invalidity Scheme: This provides 24-hour coverage against invalidity or death due to any cause, offering financial support to those who are unable to work due to severe health conditions, including terminal illnesses.
Benefits of SOCSO Contribution
SOCSO contributions are essential for several reasons:
Financial Protection: They provide financial assistance to employees in cases of occupational injuries, disabilities, or diseases. This ensures that workers and their families are protected from sudden financial hardships due to workplace incidents
Healthcare and Rehabilitation: Contributions help fund medical and rehabilitative services for injured workers, facilitating their recovery and return to work.
Survivor Benefits: In the unfortunate event of an employee's death due to work-related reasons, SOCSO provides financial support to the deceased’s dependents, ensuring their financial stability
Staying compliant with SOCSO regulations not only safeguards employees but also promotes a healthier, more secure workforce, which is beneficial for overall productivity and economic stability.
Is it compulsory for Malaysian Employees and permanent residents to register under Perkeso?
All eligible Malaysian citizens and permanent residents working under contracts in the private sector, including temporary staff of government bodies, must register with PERKESO.
The contribution rate is capped at a monthly wage ceiling of RM5,000.
Since July 1, 2018, amendments to the Employees' Social Security Act (ESSA) allow spouses of business owners to be registered as employees, ensuring they receive coverage under PERKESO.
Effective September 1, 2022, PERKESO will increase the wage ceiling for contributions from RM4,000 to RM5,000 per month. Revised contribution rates for employees earning above RM4,000 monthly are detailed in the Third Schedule, Act 4, and the Second Schedule, Act 800. For those earning over RM5,000 per month, contributions are capped at RM5,000. Employers must adhere to these updated regulations starting September 2022 and thereafter.
Which Categories of Employees are not Covered under SOCSO in Malaysia?
In Malaysia, certain categories of employees are not covered under the Social Security Organisation (SOCSO), also known as PERKESO. These categories include:
Government Employees: Permanent employees of the Federal and State Governments are not covered under SOCSO.
Self-Employed Individuals: Self-employed persons are not eligible for SOCSO coverage.
Domestic Servants: Domestic workers, such as maids, are excluded from SOCSO coverage.
Foreign Workers: Although foreign workers are generally covered, expatriates and specific categories of foreign employees with valid work permits are not obligated to contribute to certain schemes under SOCSO.
For more detailed information on SOCSO eligibility and benefits, you can refer to sources such as StaffAny, NBC.com.my, and MISHU
Foreign worker SOCSO rate
Foreign workers hired after January 1, 2019, must be registered with PERKESO by their employers. The employers are also responsible for contributing 1.25% of the workers' insured monthly wages to the Employment Injury Scheme under the Employees’ Social Security Act 1969 (Act 4). Registration can be completed through the ASSIST portal or by submitting a form to the nearest PERKESO office.
For existing foreign workers with a valid Foreign Workers Compensation Scheme (FWCS), registration with PERKESO must occur immediately after the FWCS expires by December 31, 2019. Starting January 1, 2020, all employers must register their foreign workers with PERKESO, even if they remain covered under FWCS.
New foreign workers entering Malaysia from January 1, 2019, must also register with PERKESO once validated by the Malaysian Immigration Department at any designated entry point.
Eligibility requires a valid passport and Special Pass for new foreign workers or an employment pass and Temporary Employment Visit Pass for existing workers. Employers are responsible for registering their employees, and both parties must ensure contributions are fully paid. More details on the registration process can be found [here](link to the registration process).
Have Questions About SOCSO? Get Help from Us!
If you find yourself in doubt about anything related to SOCSO, do not hesitate to contact us. We will be more than happy to help you out, and the best part is that all advice is free of charge!
Our team is well-versed in all aspects of SOCSO, from eligibility and benefits to claim procedures and contributions. Whether you're an employer looking to understand your obligations or an employee seeking to know your rights, we are ready to provide you with accurate and timely information.
Remember, our goal is to ensure that you have a clear understanding of your rights and responsibilities under SOCSO, and we are here to support you every step of the way. So, don’t hesitate to reach out—your peace of mind is just a call or click away!
FAQs on SOCSO Contribution Rates in Malaysia
1. How is SOCSO calculated from salary?
SOCSO (Social Security Organisation) contributions in Malaysia are calculated based on the employee's monthly wages. For employees below 60 years old, both the employer and the employee contribute. The employer pays 1.75% of the employee's monthly salary, while the employee contributes 0.5%
2. What is SOCSO Category 1?
SOCSO Category 1 applies to employees below the age of 60. This category covers both the Employment Injury Scheme and the Invalidity Pension Scheme. Contributions under this category are made by both the employer and the employee, as outlined above in this article.
3. What is the Percentage of EPF and SOCSO?
The percentage contributions for EPF (Employees Provident Fund) and SOCSO are as follows:
EPF:
Employees below 60 years old contribute 11% of their monthly salary.
Employers contribute 13% for employees earning RM5,000 and below and 12% for those earning above RM5,000.
SOCSO:
Employers contribute 1.75% of the employee's monthly salary.
Employees contribute 0.5% of their monthly salary.
4. Is it Mandatory to Pay SOCSO?
Yes, it is mandatory for employers to pay SOCSO contributions for their employees from the first month of employment. This is in accordance with Malaysian law to ensure that employees are covered for occupational injuries and invalidity
5. What is SOCSO allowance?
SOCSO allowances include various benefits such as:
Medical Benefit
Temporary Disablement Benefit
Permanent Disablement Benefit
Constant Attendance Allowance: Paid to employees with total permanent disablement requiring constant care.
Dependents’ Benefit
Funeral Benefit
6. How much does SOCSO claim?
SOCSO claims vary depending on the type and severity of the injury or disability. For instance, the Temporary Disablement Benefit is calculated at 80% of the employee's average assumed daily wage, while the Permanent Disablement Benefit is 90% of the employee’s average daily wage
7. Is it compulsory to pay SOCSO?
Yes, it is compulsory for both employers and employees in Malaysia to contribute to SOCSO. This includes all employees except government employees, domestic servants, and self-employed individuals. Contributions must be made from the first month of employment
8. What is the difference between SOCSO and EPF?
SOCSO (Social Security Organisation):
Purpose: Provides social security protection, including financial aid for medical leave, disability, and death benefits due to work-related accidents or occupational diseases.
Contribution: Employers and employees contribute to SOCSO, with the rates varying based on salary. Generally, employees contribute 0.5%, and employers contribute 1.75% of the employee’s monthly wage
EPF (Employees Provident Fund):
Purpose: Primarily focused on retirement savings, ensuring financial security for employees post-retirement.
Contribution: Both employers and employees typically contribute 11% of the employee’s monthly salary from the employee and an additional 12-13% from the employer
9. What is SOCSO in the payslip?
On a payslip, SOCSO refers to the contributions made by the employee and employer towards the Social Security Organisation. These contributions are mandatory and deducted from the employee’s salary to provide various social security benefits, including coverage for work-related injuries, disabilities, and death benefits
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