Malaysia Hotline: +603- 2141 8908
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 Coverage do
Employees get?
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?
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:
-Basic
Salary
-Overtime
payments
-Commission
-Payments
for leave such as annual, sick and maternity leave, rest day, public holidays
-Allowances
such as performance incentives, good behavior, cost of living (COLA)
-Service
Charges
Payments not liable for SOCSO
deductions:
-Payments
by employer to any pension or provident fund for employees
-Mileage
claims
-Gratuity
payment(s) for dismissal or retrenchment
-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 Hong Kong hotline：86-755-
36990589;
Email:
mytannet@gmail.com