SOCSO in Malaysia is a statutory social security system that protects eligible employees against employment injuries, invalidity, and related risks.
It is administered by the Social Security Organization, commonly known as SOCSO or PERKESO. Employers are responsible for registering eligible employees, calculating monthly contributions, deducting the employee share where applicable, and paying the required contributions to PERKESO.
What Does SOCSO Stand For?
SOCSO stands for Social Security Organization. In Bahasa Malaysia, the organization is known as Pertubuhan Keselamatan Sosial, commonly abbreviated as PERKESO.
The terms SOCSO and PERKESO are therefore commonly used to refer to the same Malaysian government agency.
SOCSO contributions for employed workers are mainly governed by the Employees' Social Security Act 1969, or Act 4. PERKESO also administers other social protection programs, including the Employment Insurance System under separate legislation.
For payroll purposes, businesses may see terms such as SOCSO contribution, PERKESO contribution, Act 4 contribution, and social security contribution used in connection with employee payroll deductions and employer contributions.
What Is the Purpose of SOCSO?
The purpose of SOCSO is to provide social security protection to workers when certain events affect their ability to work or earn an income.
Under the standard employed-worker framework, PERKESO provides protection mainly through the Employment Injury Scheme and the Invalidity Scheme.
The Employment Injury Scheme covers eligible work-related accidents and occupational diseases, while the Invalidity Scheme provides protection when an insured person suffers invalidity or dies from causes that are not directly related to employment, subject to the applicable conditions.
SOCSO is therefore different from a personal savings scheme. Contributions are used to provide social security protection and benefits rather than being held as an individual retirement account.
This is one of the main differences between SOCSO/PERKESO and EPF/KWSP.
Who Is Covered?
SOCSO coverage generally applies to eligible employees working under a contract of service or apprenticeship.
PERKESO states that eligible Malaysian citizens and permanent residents employed in the private sector must generally be registered. Contractual and temporary employees of the Federal Government, State Governments, and Federal or State statutory bodies can also fall within the coverage of the Employees' Social Security Act 1969.
SOCSO rules apply to industries with one or more employees, which means even a relatively small employer may have registration and contribution obligations.
Part-time, temporary, and contract workers can also be covered when they meet the legal definition of an employee under a contract of service.
Foreign employees are also covered by specific PERKESO social security arrangements. A foreign worker generally needs a valid passport and an appropriate work pass, such as a Visit Pass for Temporary Employment, Employment Pass, Special Pass, or another recognized work authorization.
Who Is Exempt?
Not every person who performs work in Malaysia is covered under the standard employed-worker SOCSO contribution arrangement.
PERKESO currently identifies permanent employees of the Federal and State Governments, sole proprietors or partners in a partnership, and certain self-employed persons as outside the normal employed-worker coverage under the Employees' Social Security Act 1969.
Self-employed individuals may instead be covered under a separate self-employment social security scheme, depending on their occupation and eligibility.
The treatment of domestic workers has also changed over time. Employers should not rely on older SOCSO material that lists all domestic servants as exempt because PERKESO now operates specific social security arrangements for domestic workers.
Employee age can also affect the type of SOCSO contribution rather than removing the employee from SOCSO completely. For example, employees aged 60 and above generally fall under a different contribution category for Employment Injury Scheme protection.
Employers should therefore determine SOCSO status based on the employee's employment relationship, age, nationality, and applicable PERKESO scheme.
How Does SOCSO Work?
SOCSO is normally processed as part of monthly payroll.
The employer identifies the employee's wages that are subject to SOCSO and determines the appropriate contribution category.
For most eligible employees below age 60 under the standard First Category, both the employer and employee contribute. The employer deducts the employee's portion through payroll and adds the employer's own contribution.
The combined amount is then submitted to PERKESO.
Employers normally manage employee registration, contribution records, and monthly submissions through the PERKESO ASSIST Portal.
SOCSO contributions are calculated according to the statutory contribution schedule. Employers should therefore use the official PERKESO contribution table or contribution calculator rather than assuming that every payroll amount can be calculated simply by multiplying the salary by a fixed percentage.
Employer and Employee Contributions
For standard Malaysian employees below age 60 who fall under the First Category, SOCSO contributions cover both the Employment Injury Scheme and Invalidity Scheme.
The contribution framework is generally:
Employer share: 1.75%
Employee share: 0.5%
The actual payable amount is determined using the official contribution schedule.
For employees who have reached age 60, the standard Second Category applies. Under this category, only the employer contributes for Employment Injury Scheme protection.
The general rate for the Second Category is:
Employer share: 1.25%
Employee share: No employee contribution
Employees who reached age 55 and had no previous SOCSO contributions before becoming eligible can also fall under the Second Category.
The current SOCSO monthly wage ceiling is RM6,000, effective from 1 October 2024. This means contributions for employees earning more than RM6,000 are generally limited to the contribution amount applicable to the RM6,000 wage ceiling.
A detailed SOCSO contribution guide should be used for the complete salary bands and contribution amounts.
Simple Calculation Example
Consider an eligible Malaysian employee who is below age 60 and earns RM6,000 per month.
Under the current First Category contribution schedule, the employer contribution for monthly wages above RM5,900 and up to RM6,000 is:
Employer contribution: RM104.15
The employee contribution is:
Employee contribution: RM29.75
The total SOCSO contribution is therefore:
RM104.15 + RM29.75 = RM133.90
The employer deducts RM29.75 from the employee's payroll and adds RM104.15 as the employer contribution.
A total of RM133.90 is then contributed to PERKESO.
For employees earning more than RM6,000, the standard Act 4 contribution remains capped at the contribution amount for the RM6,000 wage ceiling under the current schedule.
Employer Responsibilities
Employers in Malaysia are responsible for ensuring that eligible workers are correctly registered with PERKESO.
Employer and employee registration is generally handled through the ASSIST Portal, where employers submit the required business and employee information. PERKESO guidance states that a new employer and employee should generally be registered within 30 days from the date the Act becomes applicable.
During payroll processing, the employer must identify SOCSO-liable wages, determine the correct contribution category, deduct the employee share where applicable, and pay the employer contribution.
Monthly SOCSO contributions must generally be paid no later than the 15th day of the following month. For example, contributions relating to August wages must generally be paid by 15 September.
Employers must also maintain accurate employee records. PERKESO requires employers to keep information such as the employee's name, identification number, occupation, contribution details, monthly wages, and allowances.
Employee registers and contribution payment records must generally be retained for seven years from the date of the last entry.
Employers should also update PERKESO when relevant employer or employee details change and complete the required notification process if the business stops being an employer.
Employee Benefits or Impact
SOCSO provides employees with financial and social security protection when covered events occur.
Under the Employment Injury Scheme, eligible employees may receive benefits related to work injuries, occupational diseases, temporary disablement, permanent disablement, medical treatment, rehabilitation, and dependents protection, depending on the circumstances and eligibility requirements.
The Invalidity Scheme provides protection for eligible insured persons who suffer invalidity or death from causes that are not necessarily connected to their work.
For most employees under the First Category, the employee's SOCSO contribution is relatively small compared with the employer contribution because the employer pays the larger share.
Unlike EPF, SOCSO is not primarily a savings account. An employee does not simply withdraw accumulated SOCSO contributions. Instead, eligibility for benefits depends on the type of event, contribution history, and rules of the relevant social security scheme.
Important SOCSO Terms
SOCSO: The common English abbreviation for Malaysia's Social Security Organization.
PERKESO: Pertubuhan Keselamatan Sosial, the Bahasa Malaysia name for SOCSO.
Act 4: The Employees' Social Security Act 1969, which governs the main social security protection for employed workers.
Employment Injury Scheme: A SOCSO scheme that provides protection for eligible employment injuries, occupational diseases, and related events.
Invalidity Scheme: A SOCSO scheme that provides eligible insured persons with protection in cases of invalidity or death that are not directly caused by employment.
First Category Contribution: The standard contribution category generally applicable to eligible employees below age 60, with contributions from both the employer and employee.
Second Category Contribution: A category generally applicable to employees aged 60 and above, where the employer contributes for Employment Injury Scheme protection and there is no employee contribution.
ASSIST Portal: PERKESO's online employer platform used for registration, employee management, contribution submissions, and related employer transactions.
SOCSO vs EIS
SOCSO and EIS are both administered by PERKESO, but they serve different purposes.
| Comparison | SOCSO / PERKESO | EIS / SIP |
|---|---|---|
| Purpose | Social security protection for risks such as employment injury and invalidity | Income and employment support following qualifying loss of employment |
| Administered by | PERKESO | PERKESO |
| Main legislation | Employees' Social Security Act 1969, Act 4 | Employment Insurance System Act 2017, Act 800 |
| Who contributes | Employer and employee for standard First Category employees, with different rules for certain categories | Employer and employee for eligible employees |
| Standard employee rate | Generally 0.5% under First Category, according to the contribution schedule | Generally 0.2%, according to the contribution schedule |
| Standard employer rate | Generally 1.75% under First Category | Generally 0.2% |
| Main benefit or function | Employment injury, invalidity, medical and related social security protection | Financial assistance and re-employment support after qualifying job loss |
| Current wage ceiling | RM6,000 | RM6,000 |
PERKESO states that EIS generally applies to eligible employees aged 18 to 60 in the private sector, subject to specific exemptions and contribution conditions.
SOCSO and EIS should therefore not be treated as the same payroll contribution. An eligible employee may have both SOCSO Act 4 and EIS Act 800 contributions processed in the same payroll.
Frequently Asked Questions
Is SOCSO compulsory in Malaysia?
Yes. SOCSO registration and contributions are compulsory for employees and employers who fall within the coverage of the Employees' Social Security Act 1969.
PERKESO states that eligible Malaysian citizens and permanent residents working under a contract of service or apprenticeship must generally be registered.
Different rules can apply to foreign workers, self-employed individuals, government employees, and other special categories.
Who has to pay SOCSO?
For most eligible employees below age 60 under the First Category, both the employer and employee contribute.
The employer generally contributes at the 1.75% framework, while the employee contributes at the 0.5% framework, with the actual amount determined according to the statutory contribution schedule.
For certain employees under the Second Category, the employer pays the contribution without an employee deduction.
How much is SOCSO in Malaysia?
For standard First Category employees, the general contribution framework is 1.75% from the employer and 0.5% from the employee.
The actual contribution is based on the official PERKESO wage bands rather than a simple percentage calculation in every case.
The maximum standard contribution is currently based on a RM6,000 monthly wage ceiling, effective from 1 October 2024.
What is the SOCSO contribution deadline?
SOCSO contributions for a particular month must generally be paid by the 15th day of the following month.
For example, contributions for September are normally due by 15 October.
Employers should complete payroll processing early enough to allow contribution data and payments to be submitted within the statutory deadline.
Are foreign employees covered by SOCSO?
Yes. Eligible foreign workers are covered by PERKESO under specific social security rules.
Foreign workers generally need a valid passport and a valid work pass that allows them to work in Malaysia. Employers are responsible for registering eligible foreign workers and paying the required contributions.
From 1 June 2026, mandatory protection for eligible foreign workers also includes the Non-Employment Injury Scheme, known as LINDUNG 24 JAM.
For the first implementation phase, foreign workers contribute 0.75% for the Non-Employment Injury Scheme in addition to other applicable Act 4 contributions.
The employer contribution framework for eligible foreign workers includes 1.25% for Employment Injury and 0.5% for Invalidity, while the foreign worker contributes 0.5% for Invalidity plus the applicable LINDUNG 24 JAM rate.
What is the SOCSO wage ceiling in Malaysia?
The current monthly wage ceiling for SOCSO contributions is RM6,000.
The increase from RM5,000 to RM6,000 took effect on 1 October 2024.
If an employee earns more than RM6,000 per month, the standard Act 4 contribution is generally capped at the contribution amount corresponding to the RM6,000 ceiling.
What happens if an employer pays SOCSO late?
PERKESO imposes interest on late payment at 6% per annum, calculated for the period that the contribution remains unpaid after the required deadline.
Failure to register employees or make required contributions can also lead to enforcement action under the Employees' Social Security Act 1969.
Employers should therefore treat SOCSO contribution deadlines as part of their regular monthly payroll compliance process.
Does overtime count for SOCSO contributions?
Yes. PERKESO generally treats overtime payments as wages for SOCSO contribution purposes.
Other payments that can form part of SOCSO wages include salary, commission, service charges, and certain allowances.
PERKESO states that some payments are excluded from the definition of wages, such as certain travelling claims, retirement or termination payments, employer payments to employee funds, and annual bonuses.
Payroll teams should classify each pay component correctly before calculating contributions.
Do employees aged 60 and above still pay SOCSO?
SOCSO protection can continue after an employee reaches age 60, but the contribution category changes.
Employees aged 60 and above generally fall under the Second Category, which covers the Employment Injury Scheme.
Under this category, the employer pays the contribution at the applicable 1.25% framework and there is generally no employee contribution.
Is SOCSO the same as EPF?
No.
SOCSO/PERKESO provides social security protection for risks such as employment injury and invalidity.
EPF/KWSP is mainly a retirement savings system where employer and employee contributions are credited to the employee's EPF account.
Both can be mandatory for the same employee, but they have different purposes, contribution rates, legislation, and benefits.
Current SOCSO Information Effective Date
The information on this page reflects PERKESO requirements verified as of September 2026.
The standard SOCSO wage ceiling is RM6,000 per month, effective from 1 October 2024.
Foreign-worker social security requirements were expanded from 1 June 2026 through the Non-Employment Injury Scheme, LINDUNG 24 JAM.
For local employees, LINDUNG 24 JAM is currently voluntary rather than a compulsory addition to the standard SOCSO contribution.
PERKESO states that the voluntary contribution is borne by participating employees.
Employers should check the latest PERKESO contribution schedules and official notices before changing payroll configurations.
