SOCSO Malaysia 2026: Rates & Employer Obligations

If you are hiring in Malaysia, you will deal with SOCSO. There is no way around it. SOCSO (or PERKESO in Malay) is the country’s social security system, and every private-sector employer has to register, deduct contributions from employee salaries, add the employer’s share on top, and send the money to PERKESO by the 15th of the following month. Miss the deadline and you are looking at 6% annual interest on every day you are late. Get it seriously wrong and the fines go up to RM10,000, with the possibility of two years in prison.

The good news? SOCSO contributions are small. Employers pay roughly 1.75% of salary and employees pay about 0.5%, capped at a monthly wage ceiling of RM6,000 (raised from RM5,000 in October 2024). Compared to EPF, which hits employers for 12 to 13% with no ceiling at all, SOCSO barely registers in the budget. But “small” does not mean “simple.” SOCSO uses a table-based system, not straight percentages. You look up the employee’s salary bracket in PERKESO’s official table and read off the exact ringgit amount. Plug 1.75% into a spreadsheet and you will get the wrong number.

This guide walks through everything an employer needs to know about SOCSO in 2026: what it covers, how the two schemes work, the actual contribution rates, how EIS fits in, what changed for foreign workers, how to register and pay, penalties, and how SOCSO stacks up against EPF, EIS, and HRDF in your total payroll cost.

SOCSO stands for Social Security Organisation. In Malay it is Pertubuhan Keselamatan Sosial, abbreviated PERKESO. It was set up under the Employees’ Social Security Act 1969, and it sits under the Ministry of Human Resources. Its job is straightforward: collect money from employers and employees every month, then pay out benefits when someone gets hurt at work, develops an occupational disease, becomes permanently disabled, or dies.

Think of it as workplace insurance that the government runs. You cannot opt out. You cannot choose a private alternative. Every private-sector employee in Malaysia must be covered, and the employer is responsible for making sure contributions are calculated correctly and paid on time.

SOCSO runs two schemes, and which one applies to your employee determines how much you pay.

First Category covers both workplace injuries (Employment Injury Scheme) and non-work invalidity and death (Invalidity Scheme). This is the standard scheme. It applies to every employee under 60. Both the employer and employee contribute.

Second Category covers workplace injuries only. No invalidity coverage. Only the employer pays. This applies to employees aged 60 and above, employees already receiving an Invalidity Pension, and (before July 2024) foreign workers.

Most of your employees will fall under First Category. The only time you use Second Category is for workers over 60 or in the specific situations listed above.

Here is where most guides get it wrong. They tell you “employer pays 1.75%, employee pays 0.5%.” That is roughly correct as an approximation, but SOCSO does not work on percentages. It uses a fixed contribution table published by PERKESO. You find your employee’s monthly wage bracket in the table and read off the exact contribution in ringgit.

Note: These are approximate figures for common salary points under the First Category. The actual PERKESO contribution table has far more granular salary brackets (every RM100 increment from RM30 to RM6,000). Always use the official Third Schedule, Act 4 for exact amounts. PERKESO also has a free contribution calculator on their website at perkeso.gov.my.

For employees earning above RM6,000/month, contributions are frozen at the RM6,000 ceiling. A developer earning RM8,000 pays the same SOCSO as someone earning RM6,000. This makes SOCSO essentially irrelevant as a percentage cost for high earners, unlike EPF which has no ceiling at all.

Until 30 September 2024, the SOCSO wage ceiling was RM5,000. From 1 October 2024, PERKESO raised it to RM6,000. This sounds like a small change, but it has real payroll implications.

If you have employees earning between RM5,001 and RM6,000, their SOCSO contributions went up. Before October 2024, those employees were capped at the RM5,000 bracket. Now they pay based on their actual salary up to RM6,000. The maximum monthly employer SOCSO contribution increased from approximately RM87.55 to RM105.05. Again, not huge in absolute terms, but your payroll system needs to reflect it.

Employers were given a six-month transition period (October 2024 to March 2025) to update their systems. That grace period is over. If your contributions are still calculated on the old RM5,000 ceiling, you are in breach.a

EIS (Employment Insurance System, or Sistem Insurans Pekerjaan / SIP) is a separate scheme also run by PERKESO. It launched in 2018 and covers employees who lose their jobs through retrenchment or restructuring. Think of it as Malaysia’s unemployment insurance.

The rates are simple: 0.2% employer and 0.2% employee, capped at the same RM6,000 wage ceiling. EIS contributions are submitted alongside SOCSO through the same PERKESO portal and the same payment process. They are technically separate schemes with separate tables, but in practice you handle them together.

EIS covers employees aged 18 to 60. Benefits include monthly financial assistance at 40 to 80% of previous salary for 3 to 6 months, career counselling, job matching, and training programmes. It is a small deduction that employees rarely think about until they need it.a

SOCSO is one of four mandatory statutory contributions in Malaysia. Here is how they all fit together for a standard Malaysian employee under 60:

EPF is the big one. At 12% (employers with 20+ staff) or 13% (employers with fewer than 20), it dwarfs every other contribution. SOCSO and EIS together add roughly 2%. HRDF adds 1% for companies with 10 or more employees (it funds employee training programmes). The total employer statutory burden of 15 to 16% puts Malaysia well below Singapore (~17% CPF), Japan (~15-16%), South Korea (~10-15%), and miles below European countries where employer contributions regularly top 25 to 40%.

If you are hiring foreign workers in Malaysia, pay attention. The rules shifted twice in 2024 and a lot of employers are still running on the old setup.

January 2019: All foreign workers must be registered with PERKESO. This replaced the old Foreign Worker Compensation Scheme (FWCS). No exceptions.

July 2024: Foreign workers are now covered under the Invalidity Scheme (First Category), not just the Employment Injury Scheme (Second Category). This means the contribution rate went up for foreign workers. Before July 2024, employers paid ~1.25% (Second Category, employer only). Now both employer (~1.75%) and employee (~0.5%) contribute under First Category, exactly like Malaysian citizens.

October 2024: The RM6,000 wage ceiling applies to foreign workers too.

Expatriates with valid work permits are generally included, but bilateral social security agreements between Malaysia and certain countries may create exemptions. Check with PERKESO or your EOR if you are unsure.

Step 1: Register your company. Do this within 30 days of hiring your first employee. You can register through PERKESO’s ASSIST portal (assist.perkeso.gov.my) or visit a PERKESO office.

Step 2: Register each employee. Every new hire must be registered individually within 30 days of their start date.

Step 3: Calculate contributions monthly. Use the official PERKESO contribution table (Third Schedule, Act 4) to find the exact amounts for each employee’s salary bracket. Do not use percentages.

Step 4: Deduct and remit. Deduct the employee’s share from their salary. Add the employer’s share. Submit both together through the ASSIST portal or an approved bank by the 15th of the following month. January salaries must be paid to PERKESO by 15 February, and so on.

If you fail to deduct the employee’s share from their salary, you cannot go back and recover it later. The employer must absorb both shares. This is a common and expensive mistake for employers who set up payroll late or incorrectly.

Employees rarely think about SOCSO until something goes wrong. When it does, the coverage is surprisingly broad:

• Workplace injuries: Free medical treatment at SOCSO panel clinics and hospitals. Temporary disablement benefit at 80% of average daily wages during recovery. Permanent disablement pension based on degree of disability.
• Occupational diseases: Same coverage as workplace injuries for diseases caused by work conditions (respiratory diseases, musculoskeletal disorders, hearing loss, etc.).
• Death from work: Monthly pension paid to dependants. Funeral benefit as a lump sum.
• Non-work invalidity: Monthly invalidity pension if the employee becomes permanently disabled from causes unrelated to work (First Category only). Invalidity grant if insufficient contributions for a full pension.
• Rehabilitation: Return to Work programme including physical rehabilitation, vocational training, and psychological support. PERKESO runs its own rehabilitation centres.

PERKESO enforces compliance actively, and the penalties are not theoretical:

The RM10,000 fine might not sound like much, but it is per violation, per employee. An employer with 20 unregistered workers is looking at RM200,000 in potential fines plus back-contributions plus interest. PERKESO conducts audits, and they cross-reference with EPF and EIS records. If your EPF contributions show 20 employees but your SOCSO records show 15, expect a call.

That RM797.45 is the complete mandatory employer burden on a RM5,000 salary. No hidden charges, no variable rates based on industry risk (unlike SOCSO’s equivalents in many other countries). Malaysian statutory contributions are predictable and easy to budget once you understand the four components.