Malaysia SOCSO contribution guide 2026
Learn how SOCSO contributions work in Malaysia, including employee and employer contribution rates, PERKESO benefits, salary ceiling and payroll examples.
SOCSO Quick Summary
SOCSO, also known as PERKESO, provides social security protection for eligible employees in Malaysia. For many Malaysian and permanent resident employees below age 60, contributions are paid monthly by both employee and employer under the First Category.
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What Is SOCSO?
SOCSO stands for Social Security Organisation, also known as PERKESO in Malaysia. It provides protection to eligible employees in cases such as employment injury, occupational disease, invalidity and death.
Unlike EPF, which focuses mainly on retirement savings, SOCSO is designed as a social protection scheme. It helps employees and their families receive financial support when covered events occur.
Who Needs to Contribute to SOCSO?
SOCSO generally covers eligible employees working under a contract of service or apprenticeship in Malaysia. This includes many private-sector employees as well as eligible contract or temporary employees.
Permanent Federal and State Government employees, the self-employed, sole proprietors and partners in a partnership are among the categories that may fall outside normal Employees' Social Security Act coverage. Employee category, age and employment status should therefore be checked before payroll is processed.
SOCSO First Category vs Second Category
SOCSO contributions under the Employees' Social Security Act are commonly divided into two contribution categories. The applicable category depends mainly on the employee's age and contribution history.
| Category | Who It Commonly Applies To | Contribution Structure |
|---|---|---|
| First Category | Employees below age 60, subject to PERKESO rules and exceptions | Employer and employee contribute for Employment Injury and Invalidity protection. |
| Second Category | Employees aged 60 and above, and certain employees with no previous contribution history | Employer-only contribution for Employment Injury protection. |
SOCSO Contribution Rates 2026
PERKESO contributions are determined using the official contribution schedule and wage brackets. The monthly wage ceiling is currently RM6,000, meaning wages above RM6,000 are generally subject to the contribution amount applicable at the RM6,000 ceiling.
| Reference Wage Level | Employee Contribution | Employer Contribution | Total Contribution |
|---|---|---|---|
| RM2,000 | RM9.75 | RM34.15 | RM43.90 |
| RM4,000 | RM19.75 | RM69.15 | RM88.90 |
| RM6,000 and above | RM29.75 | RM104.15 | RM133.90 |
Which Payments Are Subject to SOCSO?
SOCSO uses a definition of wages that includes many forms of cash remuneration paid to employees. This is different from EPF treatment for some items, so payroll should not assume that the same salary component rules apply to every statutory contribution.
| Payment Type | SOCSO Treatment | Practical Note |
|---|---|---|
| Basic Salary / Wages | Yes | Regular salary and wages are included. |
| Overtime Payment | Yes | Overtime is treated as wages for SOCSO purposes. |
| Commission / Service Charge | Yes | Commission and service charges are included. |
| Leave Pay | Yes | Payments for annual leave, sick leave, maternity leave, rest days and public holidays may be included. |
| Incentive / Shift / Meal / Housing Allowance | Generally Yes | These allowances are commonly treated as wages. |
| Travelling / Mileage Claims | No | Genuine travelling or mileage claims are generally excluded. |
| Retrenchment / Retirement Gratuity | No | Gratuity and dismissal or retrenchment payments are generally excluded. |
| Annual Bonus | No | Annual bonus is listed by PERKESO as not forming part of wages for contribution purposes. |
How SOCSO Contributions Are Calculated
SOCSO is not normally calculated by simply multiplying salary by one fixed percentage. Instead, the employee's monthly wages are matched to the applicable wage bracket in the official PERKESO contribution schedule.
Example: RM4,000 Monthly Salary
For a First Category employee with monthly wages of RM4,000, the contribution at this reference point is:
| Monthly wages | RM4,000 |
| Employee SOCSO | RM19.75 |
| Employer SOCSO | RM69.15 |
| Total SOCSO contribution | RM88.90 |
SOCSO Contribution Examples by Salary
The examples below show selected First Category contribution points to help employees understand how SOCSO appears in payroll.
| Monthly Salary | Employee SOCSO | Employer SOCSO | Total SOCSO |
|---|---|---|---|
| RM2,000 | RM9.75 | RM34.15 | RM43.90 |
| RM4,000 | RM19.75 | RM69.15 | RM88.90 |
| RM6,000 | RM29.75 | RM104.15 | RM133.90 |
| Above RM6,000 | RM29.75 | RM104.15 | RM133.90 |
Because the contribution ceiling is RM6,000, wages above RM6,000 generally do not increase the Act 4 contribution beyond the maximum scheduled amount.
What Does SOCSO Cover?
SOCSO is designed to provide social security protection rather than personal savings. Depending on the scheme, eligibility and circumstances, protection may include medical treatment and cash benefits.
Employment Injury
Protection for eligible accidents or occupational injuries arising from employment.
Invalidity
Support may be available when an insured employee becomes permanently incapable of earning due to invalidity.
Medical Benefits
Eligible employment injury cases may receive medical treatment through PERKESO arrangements.
Dependants' Benefits
Eligible dependants may receive financial support when a covered insured person dies.
Employee vs Employer SOCSO Contribution
In Malaysia payroll, SOCSO contributions involve separate employee and employer portions. The employee contribution is deducted from salary, while the employer contribution is paid by the employer and does not reduce the employee's take-home pay.
SOCSO Salary Ceiling and Wage Brackets
SOCSO contributions are determined using wage brackets rather than a simple flat calculation. Two employees with salaries in the same statutory wage band may therefore have the same scheduled contribution amount.
The current contribution ceiling is RM6,000 per month. For wages above the ceiling, the contribution is generally capped at the amount applicable to RM6,000.
SOCSO vs EPF vs EIS
| Scheme | Main Purpose | How It Affects Salary |
|---|---|---|
| EPF / KWSP | Retirement savings | Employee deduction plus employer contribution |
| SOCSO / PERKESO | Social security, employment injury and invalidity protection | Employee deduction plus employer contribution for eligible First Category employees |
| EIS | Employment insurance and job-loss support | Small employee and employer contributions for eligible employees |
How SOCSO Affects Monthly Take-Home Pay
SOCSO reduces take-home pay by the employee contribution amount only. The employer's SOCSO portion is not deducted from the employee's gross salary.
SOCSO Contribution Deadline
SOCSO contributions for a particular month must generally be paid no later than the 15th day of the following month.
| Contribution Month | Payment Deadline |
|---|---|
| January 2026 | On or before 15 February 2026 |
| February 2026 | On or before 15 March 2026 |
If SOCSO is payable for January 2026 wages, the employer should make the January contribution by 15 February 2026.
- Identify eligible employees
- Use the correct wage bracket
- Deduct the employee share correctly
- Pay the employer share and submit on time
Common Payroll Mistakes With SOCSO
A common mistake is treating SOCSO as a simple percentage of salary instead of using the statutory contribution schedule and wage bracket. Another common mistake is assuming EPF and SOCSO use the same definition of contributable wages.
Employers should also be careful when processing overtime, allowances, bonuses, new employees, salary changes and employees who move into a different age category.
Sources & Verification
This guide was last verified in August 2026 against current PERKESO guidance on employee coverage, contribution rates, the RM6,000 wage ceiling, definition of wages and contribution payment period. Payroll and compliance decisions should always be checked against the latest official contribution schedule.
PERKESO — Contribution Rate
PERKESO — Contribution Payment
PERKESO — Employed Worker Protection
PERKESO — Employer Eligibility & Definition of Wages
Frequently Asked Questions
Is SOCSO contribution mandatory for employees in Malaysia?
SOCSO is generally mandatory for eligible employees covered under the Employees' Social Security Act. Employers are responsible for registering eligible employees and making the required monthly contributions.
How much SOCSO does an employee contribute every month?
For many First Category employees below age 60, the headline employee rate is 0.5% of wages, but the actual payroll amount should be taken from the official PERKESO wage-bracket contribution schedule.
How much SOCSO does an employer contribute?
For many First Category employees, the headline employer rate is 1.75% of wages. The actual statutory amount depends on the applicable wage bracket in the PERKESO contribution schedule.
Is SOCSO calculated on basic salary or gross salary?
SOCSO is based on wages liable for contribution. Salary, overtime, commissions, service charges, leave pay and various allowances may form part of wages, while items such as travelling claims and annual bonus are generally excluded.
Is overtime subject to SOCSO?
Yes. PERKESO includes overtime payments in the definition of wages for SOCSO contribution purposes.
Is annual bonus subject to SOCSO?
No. PERKESO lists annual bonus among payments that are not treated as wages for SOCSO contribution purposes.
What is the SOCSO salary ceiling?
The current monthly wage ceiling for contribution purposes is RM6,000. Wages above the ceiling are generally subject to the maximum scheduled contribution amount.
Does SOCSO affect take-home pay?
Yes. The employee portion is deducted from monthly salary. The employer portion is paid separately by the employer and does not reduce take-home pay.
When must employers pay SOCSO contributions?
Contributions for a month must generally be paid no later than the 15th day of the following month.
Is SOCSO the same as EIS?
No. SOCSO provides social security protection such as employment injury and invalidity protection, while EIS focuses on employment insurance and support for eligible employees who lose their jobs.