Malaysia Hotline : +603-2141 8908
What is SOCSO in Malaysia? Malaysia
SOCSO (Social Security Organization), also known as PERKESO (Pertubuhan
Keselamatan Sosial), was established in 1971 under the Ministry of Human
Resources (formerly known as Ministry of Labour) to provide social security
protections to all employees/workers in Malaysia. PERKESO is an organization to
provide insurance coverage against job-related injuries and disabilities,
workplace accidents, occupational diseases and death. SOCSO receives monthly
contributions from employers and employees, using this to build up a fund which
will pay out social security benefits when such accidents or illnesses occur.
What are Employers / Employees
responsibilities?
An
employer must register any employees employed under a contract of service or
apprenticeship and earning monthly wages of RM3,000 and below. For employees
earning RM3,000 and above, registration is optional and must be agreed upon by
both employer and employee (except if said employee has registered with SOCSO
in their previous employment, under the 'Once In Always In' policy, in which
case contribution is mandatory) Employers and registered employees have to
contribute a percentage of wages to SOCSO regardless of the employment status
whether it is permanent, temporary or casual in nature.
What kind of SOCSO Coverage do Employees get in Malaysia?
Malaysia's SOCSO
provides protection to eligible employees through two schemes:
1. Invalidity
Pension Scheme
This scheme provides protection to employees who suffer any
invalidity due to causes not connected to their employment, permanent or not or
is unlikely to recover, which results in an employee being incapable of earning
at least one-third of a employee at normal capacity. The benefits available
under this scheme are invalidity pension, daily care allowance, funeral
benefits, rehabilitation benefits, education benefits, and invalidity help.
2. Employment
Injury Insurance Scheme
This scheme provides protection to employees who suffer from
an an accident or an occupational disease arising out of, and in the course of,
his employment. It covers accidents while at work, accidents while travelling,
accidents during emergency and diseases caused by nature of work (eg. loss of
hearing due to prolonged noise exposure). The organization will provide medical
benefits, temporary disablement benefit, permanent disablement benefits, daily
care allowance, rehabilitation benefits, family liability benefits, funeral
benefits and education benefits.
What Types of Income are Included for
SOCSO Deductions in Malaysia?
All
remuneration payable in money to an employee is taken into account as wages for
the purposes of SOCSO contributions. These include the following payments:
1.
Basic Salary
2.
Overtime payments
3.
Commission
4.
Payments for leave such as annual, sick and
maternity leave, rest day, public holidays
5.
Allowances such as performance incentives, good behavior,
cost of living (COLA)
6.
Service Charges
Payments not liable for SOCSO
deductions:
1.
Payments by employer to any pension or provident
fund for employees
2.
Mileage claims
3.
Gratuity payment(s) for dismissal or
retrenchment
4.
Annual bonus
Types of Contribution
1.
First Category (Employment Injury Scheme And
Invalidity Pension Scheme)
For employees below 55 years of age. The contribution is paid
by both the employer and employee for Employment Injury Scheme and Invalidity
Pension Scheme.
2.
Second Category (Employment Injury Scheme Only)
For registered employees above 55 years of age and still
working, newly registered employees above 50 years of age, and for a previously
Insured Person receiving Invalidity Pension who is still working and receiving
wages which is less than 1/3 of the average monthly wage before invalidity.
Under this category contributions are only paid by the employer for protection
under the Employment Injury Scheme.
Rate of Contribution
For
the Employment Injury Insurance Scheme and the Invalidity Pension Scheme, the
employer pays 1.75% of remuneration up to a maximum of RM51.65 a month, while
the employee pays 0.5% of remuneration up to a maximum of RM14.75 a month. This
maximum is hit when wages exceeds RM2,900.
For
the Invalidity Pension Scheme only, the employer pays 1.25% of remuneration up
to a maximum of RM36.90 a month, with no deduction from the employee. For ease
of calculation, the exact contribution is slightly different from the intended
2.25% and 1.25% above, whereby contributions are determined in a tabular form
depending on the level of wages. A full table can be seen here.
Contact Us
If
you have further queries, please contact Tannet
24
hours Malaysia hotline：603-21418908;
24
hours Hong Kong hotline：852-27837818;
24
hours China hotline：86-755- 36990589;
Email:
mytannet@gmail.com
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