The Social Security Organisation (SOCSO), known in Malay as Pertubuhan Keselamatan Sosial (PERKESO), is a statutory body under the Ministry of Human Resources (Kementerian Sumber Manusia) that administers the Employees’ Social Security Act 1969 (Act 4). Established in 1971, SOCSO provides social security coverage to employees and their dependents in the event of employment injuries, occupational diseases, invalidity, or death. This article explains the contribution rates, benefit categories, eligibility conditions, and how the scheme fits into the broader social safety net in Malaysia. For a wider view of daily life and financial planning in Malaysia, refer to The Complete Guide to Navigating Daily Life in Malaysia.

Overview of SOCSO Coverage

SOCSO covers all employees working in Malaysia, including foreign workers and domestic servants, under the First Schedule of Act 4. The scheme is financed through mandatory contributions from both employers and employees. The contribution rates are based on the employee’s monthly wages and are divided into two main categories: Employment Injury Scheme (EIS) and Invalidity Pension Scheme (IPS). Since 2012, the scheme also includes an Employment Insurance System (EIS) under the Employment Insurance System Act 2017 (Act 800), but that is a separate contribution. This article focuses on the core EIS and IPS.

The contribution rates are revised periodically. As of 2025, the rates are as follows:

Employment Injury Scheme (EIS) Contribution Rate

The EIS covers medical treatment, temporary disablement benefits, permanent disablement benefits, and dependents’ benefits due to work-related accidents or occupational diseases. The contribution is paid entirely by the employer, no deduction from the employee’s salary.

The employer’s contribution rate is a fixed percentage of the employee’s monthly wages, subject to a maximum wage ceiling. The current wage ceiling for SOCSO contributions is RM4,000 per month (as of 2023). For wages above RM4,000, the contribution is calculated based on RM4,000 only.

The employer’s contribution rate for EIS is 1.25% of the employee’s monthly wages (capped at RM50.00 per month). For example:

  • An employee earning RM2,000 per month: employer pays RM25.00 (1.25% × RM2,000).
  • An employee earning RM4,000 per month: employer pays RM50.00 (1.25% × RM4,000).
  • An employee earning RM6,000 per month: employer still pays RM50.00 (since the ceiling is RM4,000).

Note: For employees earning below RM1,050 per month, the contribution is calculated based on actual wages, but the minimum wage of RM1,500 (as of 2025) means most employees are above that threshold.

Invalidity Pension Scheme (IPS) Contribution Rate

The IPS provides benefits for invalidity (permanent incapacity due to non-work-related causes), survivors’ benefits (for dependents of a deceased employee), and funeral benefits. Unlike EIS, the IPS contribution is shared between employer and employee.

The total IPS contribution rate is 1.0% of the employee’s monthly wages, split as follows:

  • Employer: 0.5% (capped at RM20.00 per month)
  • Employee: 0.5% (capped at RM20.00 per month)

Again, the wage ceiling is RM4,000. So maximum total IPS contribution is RM40.00 per month (RM20 from employer, RM20 from employee). For wages below RM1,050, the contribution is based on actual wages, but again, most employees earn above that.

Thus, for an employee earning RM3,000:

  • Employer pays: RM37.50 (EIS 1.25% × RM3,000) + RM15.00 (IPS 0.5% × RM3,000) = RM52.50 total employer contribution.
  • Employee pays: RM15.00 (IPS 0.5% × RM3,000), deducted from salary.

For an employee earning RM4,000:

  • Employer pays: RM50.00 (EIS) + RM20.00 (IPS) = RM70.00.
  • Employee pays: RM20.00 (IPS).

These rates are set out in the Third Schedule of Act 4. Employers must register with PERKESO and submit monthly contribution statements via the PERKESO Assist portal or manually at PERKESO counters.

Types of SOCSO Benefits

SOCSO provides a range of benefits under the two schemes. Below is a detailed breakdown.

Benefits Under Employment Injury Scheme (EIS)

  1. Medical Benefit: Free medical treatment at any SOCSO panel clinic or government hospital for work-related injuries or occupational diseases. Coverage includes outpatient, inpatient, surgery, and rehabilitation. No limit on cost or duration as long as the condition is related to the injury.
  2. Temporary Disablement Benefit (TDB): Paid to an employee who is temporarily unable to work due to a work-related injury. The rate is 80% of the employee’s daily wage (based on assumed monthly wages capped at RM4,000). The benefit is paid from the 4th day of incapacity (the first 3 days are borne by the employer). Maximum period: 24 months. For example, an employee earning RM3,000 per month (daily wage = RM100) would receive RM80 per day from SOCSO after the first 3 days. For more details on claiming this, see Temporary Disablement Benefit (TDB): Eligibility, Amount, and How to Claim.
  3. Permanent Disablement Benefit (PDB): Paid for permanent physical or mental impairment due to a work-related injury. The degree of disablement is assessed by a medical board. The benefit is a lump sum or pension depending on the severity. For total permanent disablement (100%), the employee receives a pension of 90% of the assumed monthly wage (capped at RM4,000) for life. For partial disablement (e.g., 30%), the pension is 90% of the wage multiplied by the percentage of disablement. Alternatively, the employee can opt for a lump sum payment if the pension amount is small (below RM36 per month).
  4. Constant Attendance Allowance (CAA): An additional allowance of RM500 per month (as of 2023) for employees who require constant attendance from another person due to permanent disablement. Paid in addition to the PDB pension.
  5. Dependents’ Benefit: Paid to the dependents (spouse, children, parents) of an employee who dies due to a work-related injury. The benefit is a pension of 90% of the assumed monthly wage (capped at RM4,000) distributed among dependents. For example, a widow may receive 60% and children 30% (split equally among them). Maximum total pension cannot exceed 100% of the assumed wage.
  6. Funeral Benefit: A lump sum of RM2,000 (as of 2023) paid to the person who arranges the funeral of an employee who dies due to a work-related injury.
  7. Rehabilitation Benefit: SOCSO provides vocational and physical rehabilitation at the PERKESO Tun Abdul Razak Rehabilitation Centre in Malacca. This includes medical rehabilitation, job placement, and skills training.

Benefits Under Invalidity Pension Scheme (IPS)

  1. Invalidity Pension (IP): Paid to an employee who is permanently incapacitated (physically or mentally) from any cause not related to work (e.g., illness, accident outside work). The condition must be certified by a medical board. The pension rate is 50% of the assumed monthly wage (capped at RM4,000). For example, an employee earning RM3,000 would receive RM1,500 per month. The pension is paid for life. To qualify, the employee must have at least one month of SOCSO contributions (for invalidity occurring before age 60) or 24 months of contributions (for invalidity occurring after age 60).
  2. Survivors’ Pension (SP): Paid to the dependents of an employee who dies from any cause (non-work-related) before age 60. The rate is 50% of the assumed monthly wage (capped at RM4,000), distributed among dependents. The employee must have at least 24 months of contributions in the last 40 months before death, or at least 60 months of contributions in total. A funeral benefit of RM2,000 is also payable.
  3. Funeral Benefit (IPS): Same as under EIS, RM2,000 lump sum. However, under IPS, it is paid for death from any cause, provided the employee satisfied the contribution condition.
  4. Constant Attendance Allowance (IPS): Same as under EIS, RM500 per month for invalidity pensioners who need constant care.
  5. Education Benefit: SOCSO also provides an education loan scheme for children of disabled or deceased SOCSO contributors. The loan covers tuition fees and living expenses for tertiary education at public and private institutions. This is a separate benefit from the pension. For more details, see Skim Pinjaman Buku.

Contribution Tables and Examples

To make the rates clearer, here are two sample contribution tables based on the current wage ceiling of RM4,000.

Table 1: Employer’s Total Contribution (EIS + IPS)

For an employee earning RM2,500 per month:

  • EIS (1.25%): RM31.25
  • IPS employer portion (0.5%): RM12.50
  • Total employer contribution: RM43.75

For an employee earning RM4,000 per month:

  • EIS (1.25%): RM50.00
  • IPS employer portion (0.5%): RM20.00
  • Total employer contribution: RM70.00

For an employee earning RM1,500 per month:

  • EIS (1.25%): RM18.75
  • IPS employer portion (0.5%): RM7.50
  • Total employer contribution: RM26.25

Table 2: Employee’s Contribution (IPS only)

  • Wage RM1,500: employee pays RM7.50
  • Wage RM2,500: employee pays RM12.50
  • Wage RM4,000: employee pays RM20.00

These contributions are deducted monthly from the employee’s salary and remitted by the employer to PERKESO. Employers who fail to register or pay contributions face penalties under Section 6 of Act 4, including fines up to RM10,000 or imprisonment up to 2 years.

Eligibility and Registration

All employees (including part-time, temporary, and foreign workers) who earn wages are covered under Act 4. However, the following are exempted:

  • Employees earning less than RM500 per month (but this threshold is now irrelevant due to the RM1,500 minimum wage).
  • Self-employed persons (except for certain categories like taxi drivers, e-hailing drivers, and gig workers who can voluntarily register under the Self-Employment Social Security Act 2017).
  • Domestic servants (maids, gardeners), but since 2022, domestic servants are also required to be registered under the Employees’ Social Security (Domestic Servants) Regulations 2022. Employers of domestic servants must register and pay contributions.
  • Government servants (they are covered under the Government Pension Scheme).

Employers must register with PERKESO within 30 days of hiring the first employee. Registration can be done online via the e-Kiosk or at any PERKESO office. Each employee is assigned a unique SOCSO number (the same as the employee’s national registration number, IC number, for Malaysian citizens; for foreign workers, a special number is issued).

How to Claim SOCSO Benefits

To claim benefits, the employee or dependents must submit a claim form (Borang 21 for disablement, Borang 20 for death) to the nearest PERKESO office. The claim must be supported by medical reports, employer’s accident report (Borang 8), and other relevant documents. The claim is processed within 30 working days. If approved, the benefit is paid directly into the claimant’s bank account. For disputes, there is an appeal process through the Medical Board and the Social Security Appellate Board. For a step-by-step guide on the overall process, see How to Claim SOCSO Benefits: A Complete Step-by-Step Guide for Malaysian Workers.

For work-related injuries, the employer must also submit an accident report (Borang 8) within 48 hours of the accident. Failure to do so may result in a fine.

Integration with Other Social Safety Nets

SOCSO contributions are separate from the Employees Provident Fund (EPF/KWSP). While EPF provides retirement savings, SOCSO provides insurance against income loss due to injury or invalidity. For retirement planning, see KWSP Pengeluaran Umur 55 and KWSP i-Saraan. Additionally, the government provides cash assistance to low-income households through schemes like Bantuan Sara Hidup BSH and Bantuan OKU. For general financial management, refer to Budget Makanan Bulanan and Tip Jimat Elektrik. Cost of living comparisons can be found in Perbandingan Harga Pasaraya and Kos Sewa Rumah Malaysia.

Recent Developments and Future Changes

In 2023, the government proposed increasing the SOCSO wage ceiling from RM4,000 to RM5,000 to expand coverage for higher-income workers. As of early 2025, this change has not been gazetted, but it is expected to be implemented within the next two years. The increase would mean higher contributions (both employer and employee) but also higher benefits for those earning between RM4,001 and RM5,000. Similarly, the minimum wage increase to RM1,500 in 2022 has brought more workers into the SOCSO net.

Another notable development is the expansion of self-employment coverage under Act 4. Since 2022, e-hailing drivers (Grab, MyCar, etc.), taxi drivers, and delivery riders can voluntarily register and contribute to SOCSO. The contribution rate for self-employed persons is a flat monthly sum based on income categories, ranging from RM13.10 to RM49.40 per month (as of 2023). This provides them with similar benefits to formal employees.

Conclusion

SOCSO is a critical component of Malaysia’s social security system, protecting workers and their families from the financial consequences of work-related injuries, invalidity, and death. Understanding the contribution rates and benefits is essential for both employers and employees to ensure compliance and to access entitlements. Employers must accurately calculate and remit contributions monthly, while employees should be aware of the benefits they are entitled to in case of an unfortunate event. For a broader understanding of navigating daily life in Malaysia, including financial planning and cost management, consult The Complete Guide to Navigating Daily Life in Malaysia.

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  • KWSP Pengeluaran Umur 55
  • KWSP i-Saraan
  • Bantuan Sara Hidup BSH
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  • Skim Pinjaman Buku