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Summary. SOCSO Malaysia (PERKESO) is a mandatory social security program established in 1971 under the Employees' Social Security Act 1969 to protect workers against workplace accidents, illnesses, and invalidity. All employers with at least one employee must register and contribute to the system, which covers Malaysian citizens, permanent residents, and foreign workers with valid permits. The contribution structure involves employers paying 1.75% and employees contributing 0.75% of monthly wages up to a ceiling of RM5,000, for a total of 2.5%. SOCSO operates two main schemes: the Employment Injury Scheme, covering work-related accidents and occupational diseases, and the Invalidity Scheme, providing protection for conditions unrelated to employment. Registration must be completed within 30 days of hiring, with monthly contributions due by the 15th of the following month. Claiming benefits requires reporting incidents within 48 hours, seeking medical attention, submitting proper documentation, and undergoing SOCSO's review process, after which compensation is transferred directly to the claimant's bank account.
As a mandatory requirement for most private sector businesses, SOCSO Malaysia involves contributions and responsibilities. In this article, we'll break down why employers need to register their employees, how the contribution system works, and what happens when an employee experiences a work-related injury or illness or faces long-term inability to work. Understanding SOCSO Malaysia is crucial for employers to comply with the law and ensure the well-being of their workforce.
Read next: Global Hiring Guide: Malaysia
What is SOCSO Malaysia?
SOCSO Malaysia stands for Social Security Organization, also known as PERKESO (Pertubuhan Keselamatan Sosial).
Purpose of establishment
SOCSO Malaysia was established on 1 January 1971, under the Employees’ Social Security Act 1969. Its primary purpose is to provide social security protection to employees and their dependents in Malaysia.
SOCSO operates as a statutory body under the Ministry of Human Resources, aiming to safeguard the welfare of workers during unforeseen circumstances such as workplace accidents, occupational diseases, invalidity, or death. This establishment was part of Malaysia’s broader effort to develop a comprehensive social security system based on recommendations from the International Labour Organization (ILO) in the 1960s.
Core functions
SOCSO carries out several key functions to ensure the well-being and security of Malaysia’s workforce:
- Implementation of Social Security Schemes
- Invalidity Pension Scheme
- Accident Prevention and Health Promotion
- Financial Assistance and Rehabilitation
- Return-to-Work (RTW) Program
- Human Resource Development
Main objectives
SOCSO aims to:
- Be an outstanding, comprehensive, and dynamic leader in social security.
- Provide inclusive social security protection from cradle to grave, ensuring the well-being of all employees and their dependents.
What is the eligibility and SOCSO contribution?
In Malaysia, SOCSO contributions are mandatory for all employers with at least one employee. This requirement applies to Malaysian citizens and permanent residents employed in the country, as well as to foreign workers with valid work permits.
Self-employed individuals are also required to contribute under the Self-Employment Social Security Scheme (SESS). Once an employee’s monthly earnings exceed RM100, contributions become compulsory.
The contribution structure generally involves both employer and employee contributions. For the Employment Injury Scheme, the employer contributes the full amount. The Invalidity Scheme and Employment Insurance System (EIS), on the other hand, require joint contributions from both the employer and the employee.
SOCSO also adjusts contribution obligations based on age. Employees under the age of 60 contribute at the standard rate and are covered under all schemes. However, once an employee reaches 60, only contributions to the Employment Injury Scheme are required, at a reduced rate. This is because older employees are no longer eligible for Invalidity Scheme benefits.
In recent years, SOCSO has introduced several key changes to strengthen its protection. In 2022, the maximum monthly salary ceiling for contribution calculation was raised from RM4,000 to RM5,000, allowing higher-income workers to receive more comprehensive benefits. Coverage was also expanded to include previously excluded sectors, and new benefits were added under the EIS. In 2023, SOCSO extended greater protections to gig economy workers, recognizing the evolving nature of employment in sectors such as food delivery, freelancing, and ride-hailing.
Read next: Understanding Malaysia’s Employment Act: Updates & FAQs in 2025
To support the growing self-employed population, the Self-Employment Social Security Scheme was launched and initially made compulsory for taxi and e-hailing drivers. Over time, it has been expanded to include individuals in agriculture, fishing, and food delivery services.
Contribution rates under this scheme vary based on the insured income selected, ranging from RM157.20 to RM592.80 annually. The scheme provides critical benefits such as medical coverage, permanent disablement compensation, dependents’ benefits, and funeral expenses, helping ensure that self-employed workers are not left vulnerable in times of need.
SOCSO Contribution Table
What are the key schemes of SOCSO Malaysia?
Employment Injury Scheme
The Employment Injury Scheme provides coverage for employees who experience accidents or contract occupational diseases due to their work.
This protection encompasses the following:
Work accidents: This happens while the employee is performing their job duties at the workplace, or in some cases, even off-site if they are conducting work-related tasks. This can also include accidents that occur during work-related travel.
Commuting accidents: This is an accident that occurs to an employee during specific journeys directly related to their employment.
Emergency accidents: This refers to an accident that occurs to an employee while they are at or near their workplace for the purpose of rescuing, assisting, or protecting other people from a disaster or danger during an emergency.
Occupational disease: It is a disease caused by or arising from the employee's work or the specific occupation they are in. The specific diseases and the occupations linked to them are detailed in the Fifth Schedule of the relevant Act.
Invalidity scheme
The SOCSO scheme offers around-the-clock protection to employees who become invalid (due to a serious, permanent health condition) or die from any cause that is NOT related to their job. This means that even if the invalidity or death happens outside of work hours or is due to a non-work-related illness or accident, the employee or their family may still be eligible for benefits under the SOCSO Invalidity Scheme.
What are the benefits that SOCSO Malaysia provides
SOCSO plays a vital role in safeguarding Malaysian workers by offering a comprehensive range of benefits that protect them from the financial consequences of workplace accidents, injuries, and illnesses.
It ensures that workers, especially those from lower-income groups, have access to essential medical care without facing burdensome costs. By covering medical expenses and providing compensation through schemes like the Employment Injury Scheme and Invalidity Scheme, SOCSO helps maintain income security for those temporarily or permanently unable to work due to job-related health issues.
Beyond individual protection, SOCSO Malaysia also supports families by offering dependents' benefits in the unfortunate event of a worker’s death. This financial support helps prevent families from falling into poverty and provides a degree of stability during difficult times. The system also encourages employers to prioritize workplace safety, as they contribute to the fund and are incentivized to reduce workplace risks.
Overall, SOCSO not only strengthens Malaysia’s social safety net but also contributes to economic productivity and social equity by ensuring that the risks of employment are shared collectively rather than shouldered solely by workers.
Additional reading: Navigating HR Compliance in Malaysia
How does SOCSO Malaysia work?
Registration process
Employers must register their business and employees using Form 1 (Employer’s Registration) and Form 2 (Employee’s Registration) through the SOCSO ASSIST Portal or at the nearest SOCSO office.
Employees will then be assigned a SOCSO number, which will be used for tracking contributions and claims. According to SOCSO Malaysia regulations, employers must register within 30 days of hiring their first employee.
Contribution calculation and payment
Basic Formula
The standard combined rate is 2.5% of monthly wages for both the Employment Injury Scheme and the Invalidity Pension Scheme.
- Employer contributes 1.75%
- Employee contributes 0.75%
How to Calculate:
- Identify the employee's monthly wage (salary + allowances)
- If wage exceeds RM5,000, use RM5,000 as the calculation base
- Apply the employer rate (1.75%) to calculate employer's contribution
- Apply the employee rate (0.75%) to calculate employee's contribution
Example
For an employee earning RM3,000 per month:
Employer contribution: RM3,000 × 1.75% = RM52.50
Employee contribution: RM3,000 × 0.75% = RM22.50
Total SOCSO contribution: RM75.00
Most employers use SOCSO's official contribution tables or payroll software that automatically calculates the exact amounts based on salary ranges. Payments are made monthly by the 15th of the following month via the ASSIST Portal or through appointed banks.
Claiming benefits
Claiming benefits means formally applying to SOCSO to receive financial or other forms of assistance and support as provided under the Employees' Social Security Act 1969. This is done when an insured employee or their dependents meet specific eligibility criteria due to events such as employment injury, invalidity or death of an insured person.
Rehabilitation services
Part of the SOCSO Malaysia scheme comes with rehabilitation, which is offered through its rehabilitation centers, such as the Tun Abdul Razak Rehabilitation Centre.
Services include:
- Physiotherapy
- Occupational therapy
- Vocational training
- Return-to-work programs
- Psychological counseling
Rehabilitation is aimed at helping injured workers regain their independence and return to the workforce when possible.
How do I claim SOCSO benefits?
The process of claiming benefits generally involves the following steps:
- Report the Incident: Inform your employer immediately after a workplace injury or diagnosis of a work-related illness. Employers must report the incident to Perkeso within 48 hours using Form 21 (Accident Report Form).
- Medical Check-Up and Treatment: Next, the worker should seek medical attention at a SOCSO panel clinic or a government hospital. During the visit, the attending doctor will issue a medical certificate (MC) to confirm the condition. If hospitalization or specialist treatment is required, SOCSO may approve and cover the associated medical expenses.
- Submit Claim Documents: Once treatment has been received, the required claim documents must be submitted to SOCSO. This can be done either online through the ASSIST Portal or in person at the nearest SOCSO office. The claim may be submitted by the employer or the employee.
- Review and Approval: After submission, SOCSO will review the claim. During this stage, they may conduct interviews or request additional documents to verify the case. Once the claim is approved, the compensation or benefits will be transferred directly to the claimant’s registered bank account.
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