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.
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Calculate My SOCSO →SOCSO Quick Summary
SOCSO, also known as PERKESO, provides social security protection for employees in Malaysia. Contributions are paid by both employees and employers through monthly payroll.
| Item | Details |
|---|---|
| Scheme Name | SOCSO / PERKESO |
| Purpose | Employment injury and invalidity protection |
| Paid By | Employee and employer |
| Salary Ceiling | Commonly capped based on the latest SOCSO wage ceiling |
| Payroll Frequency | Monthly |
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 unexpected work-related or health-related events occur.
What Does SOCSO Cover?
Employment Injury
Protection for accidents that happen during work or while commuting for work purposes.
Invalidity
Support for employees who become unable to work due to serious illness or disability.
Medical Benefits
Medical treatment and related support may be provided for eligible SOCSO cases.
Dependants' Benefits
Financial support may be available to eligible dependants in certain cases.
SOCSO Contribution Rates 2026
SOCSO contributions are calculated based on monthly wages using the official SOCSO contribution table. The employee contribution is lower than the employer contribution, and the actual amount depends on the salary bracket.
| Monthly Wages | Employee Contribution | Employer Contribution | Total Contribution |
|---|---|---|---|
| RM1,000 – RM2,000 | RM4.75 | RM16.65 | RM21.40 |
| RM3,000 – RM4,000 | RM14.75 | RM51.65 | RM66.40 |
| RM5,000 – RM6,000 | RM24.75 | RM86.65 | RM111.40 |
| RM6,000 | RM29.75 | RM104.15 | RM133.90 |
| Above RM6,000 | RM30.00 | RM105.00 | RM135.00 |
Note: This table is a simplified quick reference. Actual SOCSO payroll calculations should follow the latest official PERKESO contribution schedule.
How SOCSO Contributions Are Calculated
SOCSO is not usually calculated using a simple fixed percentage from salary. Instead, the contribution amount is selected from the SOCSO wage bracket table according to the employee's monthly wages.
Example SOCSO Calculation
If an employee earns RM4,000 per month, the estimated SOCSO contribution based on the simplified table may be:
- Employee SOCSO: RM14.75
- Employer SOCSO: RM51.65
- Total SOCSO Contribution: RM66.40
The employee's portion is deducted from monthly salary, while the employer pays the employer portion separately.
Employee vs Employer SOCSO Contribution
In Malaysia payroll, SOCSO contributions involve two separate portions. The employee contribution is deducted from the employee's salary. The employer contribution is paid by the employer and is not deducted from the employee's take-home pay.
This means your net salary is affected only by the employee portion of SOCSO, together with other deductions such as EPF, EIS and PCB.
SOCSO vs EPF vs EIS
| Contribution | Main Purpose | Paid Monthly? |
|---|---|---|
| EPF | Retirement savings | Yes |
| SOCSO | Social security and employment injury protection | Yes |
| EIS | Employment insurance and job loss support | Yes |
Who Should Read This SOCSO Guide?
- Employees checking SOCSO deductions from monthly salary
- Job seekers comparing Malaysian salary packages and take-home pay
- HR and payroll staff preparing monthly payroll contributions
- Business owners who need a simple overview of SOCSO responsibilities
Who Needs to Contribute to SOCSO?
SOCSO contributions generally apply to eligible employees working in Malaysia under an employment contract. For payroll purposes, employers normally need to identify whether an employee is covered, register the employee where required and make monthly contributions based on the employee's wages.
The contribution treatment may differ depending on the employee category, age, citizenship status and the type of employment. This is why payroll teams should not rely only on a fixed percentage estimate. The official PERKESO contribution schedule should be used when preparing actual monthly payroll.
SOCSO Salary Ceiling and Wage Brackets
SOCSO contributions are usually determined by wage brackets instead of a flat percentage. This means an employee earning RM3,980 and an employee earning RM4,000 may fall within the same bracket, depending on the official contribution table.
The wage ceiling is important because once wages exceed the applicable ceiling, the contribution may be capped at the maximum scheduled amount. For employees, this makes SOCSO a relatively small monthly deduction compared with EPF and PCB, but it still provides important protection if something unexpected happens.
SOCSO Contribution Examples by Salary
The examples below show how SOCSO may appear in a typical salary breakdown. These are simplified examples based on the quick reference table above.
| Monthly Salary | Employee SOCSO | Employer SOCSO | Total SOCSO |
|---|---|---|---|
| RM2,000 | RM4.75 | RM16.65 | RM21.40 |
| RM4,000 | RM14.75 | RM51.65 | RM66.40 |
| RM6,000 | RM29.75 | RM104.15 | RM133.90 |
| Above RM6,000 | RM30.00 | RM105.00 | RM135.00 |
In payroll, only the employee portion reduces the employee's take-home pay. The employer portion is an additional cost borne by the employer.
How SOCSO Affects Monthly Take-Home Pay
SOCSO reduces take-home pay by the employee contribution amount only. For example, if the employee portion is RM14.75, that amount is deducted from the employee's salary together with EPF, EIS and PCB where applicable.
Although the monthly SOCSO deduction is usually small, employees should still understand it because it appears on payslips and forms part of the total statutory deductions. For job offer comparisons, the employer SOCSO portion is not part of take-home pay, but it is part of the employer's total employment cost.
Advantages and Limitations of SOCSO
Employee Protection
SOCSO provides social security protection for eligible employees when employment injury, invalidity or other covered events occur.
Employer Support
Employers contribute a higher portion, helping fund protection without fully passing the cost to employees.
Not Retirement Savings
SOCSO is not the same as EPF. It does not function as a personal retirement savings account.
Eligibility Conditions
Benefits depend on eligibility, contribution history, documentation and approval by the relevant authority.
Common Payroll Mistakes With SOCSO
A common mistake is treating SOCSO as a simple percentage of salary. In practice, payroll should follow the official contribution schedule and wage bracket. Another mistake is confusing SOCSO with EIS because both are administered through PERKESO-related payroll processes, but the purpose of each scheme is different.
Employers should also be careful when processing new employees, resigned employees, bonuses, allowances and salary changes. If wage information is not updated properly, the monthly contribution may be understated or overstated.
Official Reference
This guide is written for general salary and payroll understanding. For actual payroll submission, contribution eligibility and benefit claims, employees and employers should refer to PERKESO / SOCSO official guidance and the latest contribution schedule.
Suggested official reference: PERKESO Official Website
Frequently Asked Questions
Is SOCSO contribution mandatory for employees in Malaysia?
SOCSO contribution is generally mandatory for eligible employees in Malaysia. Employers are responsible for registering eligible employees and making monthly SOCSO contributions through payroll.
How much SOCSO does an employee contribute every month?
The employee contribution depends on the employee's monthly wage bracket. SOCSO is usually based on a contribution table rather than a simple fixed percentage of salary.
How much SOCSO does an employer contribute?
The employer contribution is higher than the employee contribution and is paid separately by the employer. It is not deducted from the employee's take-home salary.
Is SOCSO calculated on basic salary or gross salary?
SOCSO is generally calculated based on wages that are subject to SOCSO contribution. Payroll treatment may depend on the type of payment, such as basic salary, allowances, overtime or other remuneration.
Does SOCSO affect take-home pay?
Yes. The employee portion of SOCSO is deducted from monthly salary, so it reduces take-home pay. The employer portion does not reduce the employee's net salary.
What happens if an employer does not pay SOCSO?
Employers are responsible for making SOCSO contributions for eligible employees. Failure to contribute may result in compliance issues, penalties or enforcement action by the relevant authority.
Is SOCSO the same as EIS?
No. SOCSO provides social security protection such as employment injury and invalidity benefits, while EIS focuses on employment insurance and support for eligible employees who lose their jobs.
Related Salary Guides
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