SOCSO Contribution Malaysia 2026: Rates & Guide

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Published By: WebHR Team

SOCSO Contribution Malaysia 2026: Rates & Guide

SOCSO Contribution Malaysia is a monthly social security contribution that helps protect eligible employees against risks such as employment injuries and invalidity.

SOCSO is commonly known in Malaysia as PERKESO, or Pertubuhan Keselamatan Sosial, and contributions are administered under the Employees' Social Security Act 1969, also known as Act 4.

For most eligible employees below age 60, the standard contribution includes an employer share and an employee share. The amount depends on the employee's monthly wages and the contribution category that applies.

Malaysia currently uses a contribution wage ceiling of RM6,000 per month, so wages above that amount are generally subject to the contribution amount applicable at the RM6,000 ceiling.

Last reviewed: August 2026.

What Is SOCSO Contribution in Malaysia?

SOCSO contribution is a payment made to Malaysia Social Security Organization to provide social protection to eligible employees. SOCSO and PERKESO refer to the same Organization, with SOCSO being the commonly used English abbreviation and PERKESO being the Malay abbreviation.

Under Act 4, eligible employees can receive protection through schemes such as the Employment Injury Scheme and Invalidity Scheme. These schemes provide different forms of protection when an employee experiences a work-related injury, occupational disease, invalidity, or other qualifying event.

Employers are responsible for registering eligible employees and paying the required monthly contributions. PERKESO requirements apply to industries with one or more employees where the employer and employee fall within the coverage of the law.

How Much Is SOCSO Contribution in Malaysia?

The standard SOCSO contribution for an eligible employee below age 60 is based on the First Category. Under this category, the employer portion is based on a rate of 1.75%, while the employee portion is based on 0.5% of monthly wages according to the official contribution schedule.

These percentages help explain how the contribution is structured, but employers should use PERKESO's official contribution schedule rather than treating every payroll calculation as a simple salary-times-percentage formula. The schedule contains salary bands that determine the actual amount payable.

For employees who fall under the Second Category, the normal Act 4 contribution is based on 1.25% of monthly wages and is paid entirely by the employer. This category generally applies to employees who have reached age 60 and certain eligible employees who first enter coverage at an older age.

What Is the SOCSO Contribution Rate in Malaysia for 2026?

The basic mandatory Act 4 rate for most employees below 60 remains structured around an employer share of 1.75% and an employee share of 0.5%. This covers the Employment Injury Scheme and Invalidity Scheme under the First Category.

For employees covered only under the Second Category, the employer generally pays 1.25%, while there is no standard employee contribution for those core schemes. PERKESO uses its official contribution schedule to determine the actual ringgit amount for each wage range.

A separate 2026 development is LINDUNG 24 JAM, a Non-Employment Injury Scheme. This can add an employee-funded contribution to Act 4 depending on whether the worker participates and whether participation is voluntary or mandatory for that employee category.

First Category SOCSO Contribution

The First Category generally covers employees who have not reached age 60. Contributions under this category provide protection through both the Employment Injury Scheme and Invalidity Scheme.

The standard employer portion is based on 1.75% and the employee portion on 0.5% of monthly wages according to PERKESO's contribution schedule. Employees below 60 generally remain in this category unless a specific exception applies, such as certain workers who first become covered after reaching the relevant age threshold.

The contribution should be treated as part of monthly payroll. The employer deducts the employee portion from wages where applicable and submits it together with the employer portion.

Second Category SOCSO Contribution

The Second Category generally applies after an employee reaches age 60. Under the core Act 4 arrangement, this category provides Employment Injury Scheme coverage and the standard contribution is paid by the employer.

The employer contribution is based on 1.25% of monthly wages according to the contribution schedule. PERKESO also states that an eligible new employee who first enters coverage at age 55 or above without earlier qualifying contributions can fall under the Second Category.

Age therefore matters when setting up an employee in payroll. Employers should confirm the worker's contribution history and applicable category instead of assigning the same SOCSO rate to every employee.

What Is the SOCSO Wage Ceiling in Malaysia?

The current PERKESO wage ceiling for Act 4 contributions is RM6,000 per month. The ceiling was increased from RM5,000 to RM6,000 with effect from 1 October 2024 and continues to apply to subsequent contribution months.

When an employee earns more than RM6,000, the SOCSO contribution is generally calculated using the contribution amount applicable to the RM6,000 ceiling rather than continuing to increase with the full salary.

This distinction is important for payroll teams because an employee earning RM6,000 and an employee earning considerably more can reach the same maximum contribution band for the relevant SOCSO schedule.

How to Calculate SOCSO Contribution in Malaysia

To calculate SOCSO contribution, employers first determine the employee's wages that are subject to PERKESO contribution. They then identify whether the employee belongs to the First or Second Category and locate the applicable wage range in PERKESO's official contribution schedule.

PERKESO currently uses 65 salary categories, including a final category for wages exceeding RM6,000. The contribution schedule provides the actual employer and employee amounts for each wage range, which makes it more accurate than relying only on headline percentages.

PERKESO also provides an official contribution calculator for employers and employees. This can be used to check the applicable Act 4 contribution based on monthly salary and employee circumstances.

SOCSO Calculation Example for RM3,000 Salary

Consider an employee whose SOCSO-liable wages fall above RM2,900 but do not exceed RM3,000. Under the current First Category schedule, the standard employer share for the core Employment Injury and Invalidity schemes is RM51.65, while the employee's Invalidity Scheme share is RM14.75.

If the employee is also participating in the current Phase 1 LINDUNG 24 JAM scheme, the official combined 2026 schedule shows an additional employee contribution of RM22.15 for the non-employment injury component at that wage level. This makes the combined Act 4 contribution different from the basic SOCSO amount alone.

This is one reason employers should use the current PERKESO schedule and correctly identify each employee's scheme participation instead of copying contribution figures from older payroll guides.

What Payments Are Included in SOCSO Wages?

PERKESO uses a broad definition of wages for contribution purposes. Salary is included, but the contribution base can also contain several other payments made to an employee in money.

PERKESO identifies overtime payments, commissions, service charges, payments for annual or sick leave, maternity leave, rest days and public holidays, incentives, shift allowances, meal allowances, cost-of-living allowances, and housing allowances among payments that can be treated as wages.

Payments to workers on hourly, daily, weekly, piece-rate, or task-rate arrangements can also be treated as wages. Employers should therefore review all relevant earnings in the payroll period rather than calculating SOCSO only from the employee's basic monthly salary.

What Payments Are Not Subject to SOCSO Contribution?

Not every payment made to an employee is included in PERKESO wages. Certain payments are excluded from the contribution calculation under the current guidance.

PERKESO lists payments made by an employer to statutory funds for employees, mileage claims, gratuity or payments connected with dismissal or retrenchment, and annual bonuses among payments that are not considered wages for SOCSO contribution purposes.

Correct classification matters because SOCSO does not follow exactly the same wage rules as every other Malaysian statutory deduction. Payroll teams should not assume that a payment treated one way for EPF will automatically receive the same treatment for SOCSO.

Is Overtime Subject to SOCSO Contribution in Malaysia?

Yes. Overtime payments are generally included as wages for SOCSO contribution purposes. This is an important difference from EPF, where overtime is generally excluded from the EPF contribution base.

PERKESO specifically includes overtime within its definition of wages. The overtime amount should therefore be considered together with other SOCSO-liable earnings when the employer identifies the correct contribution band for the month.

This difference is a good example of why Malaysian payroll should calculate each statutory contribution according to its own rules rather than applying one definition of wages across EPF, SOCSO, EIS, and tax deductions.

Is an Annual Bonus Subject to SOCSO Contribution?

An annual bonus is currently listed by PERKESO as a payment that is not considered wages for SOCSO contribution purposes. This differs from several other payroll payments such as commissions, incentives, allowances, and overtime.

Employers should make sure the payment is correctly classified before excluding it. A payment described casually as a "bonus" may not always have the same legal or payroll treatment as a formal annual bonus.

For unusual incentive or bonus arrangements, checking current PERKESO guidance can help avoid using the wrong contribution base.

Who Needs to Contribute to SOCSO in Malaysia?

An employee under the Employees' Social Security Act is generally a person employed for wages under a contract of service or apprenticeship. The contract can be written or oral, and it may be expressed or implied.

PERKESO confirms that temporary and part-time workers can also be required to register. The law is not limited only to permanent, full-time employees.

Employers with one or more employees are responsible for determining coverage, registering eligible workers, and making the required contributions. Principal employers must also ensure that workers employed through immediate employers are appropriately registered where the rules apply.

Do Part-Time Employees Need SOCSO in Malaysia?

Yes. Temporary and part-time employees can fall within PERKESO coverage when they work under a qualifying employment relationship.

Their contribution is based on the wages paid for the relevant month and the contribution schedule that applies to them. Being paid hourly or working fewer hours does not automatically remove SOCSO requirements.

Employers should therefore include eligible part-time workers in the same registration and monthly contribution controls used for other employees.

Do Employees Over Age 60 Need SOCSO?

Yes, employees can remain registered with PERKESO after reaching age 60. However, the contribution category changes.

PERKESO states that workers who reach age 60 generally move to the Second Category, under which the employer pays the contribution for Employment Injury Scheme coverage. The standard core contribution rate is based on 1.25% according to the contribution schedule.

This means reaching age 60 does not simply remove the employee from SOCSO. Payroll should update the applicable contribution category instead.

SOCSO Contribution for Foreign Workers in Malaysia

Foreign workers with valid work passes are covered under PERKESO rules, and employers are responsible for registering them and making the required monthly contributions. Foreign workers are covered by the Employment Injury Scheme, and since 1 July 2024, eligible foreign workers have also been covered by the Invalidity Scheme.

A further change took effect from 1 June 2026, when the Non-Employment Injury Scheme, or LINDUNG 24 JAM, became effective for foreign workers. Unlike local employees, for whom current participation in LINDUNG 24 JAM is voluntary, participation remains mandatory for foreign workers.

Under the current Phase 1 arrangement, the employer portion for applicable foreign workers consists of 1.25% for Employment Injury and 0.5% for Invalidity, while the employee bears 0.5% for Invalidity and 0.75% for the Non-Employment Injury Scheme. The exact ringgit contribution should be taken from the current contribution schedule.

What Is LINDUNG 24 JAM and How Does It Affect SOCSO?

LINDUNG 24 JAM is PERKESO's Non-Employment Injury Scheme. It is designed to provide eligible employees with protection against accidental injuries that happen outside working hours and are not directly connected with their employment.

Under the current Phase 1 rate, the contribution for this additional protection is based on 0.75% and is fully borne by the employee. PERKESO states that the rate is planned to increase to 1.0% in Phase 2 and 1.25% from Phase 3 onward.

As of August 2026, participation is voluntary for local employees but mandatory for foreign workers under the applicable rules. Employers still handle payment on behalf of participating employees through the contribution process.

Is LINDUNG 24 JAM Mandatory for Malaysian Employees?

No. Under PERKESO's current guidance, participation in LINDUNG 24 JAM is no longer compulsory for local employees. A local employee may participate voluntarily, and the contribution is borne by the employee.

This means employers should not assume that every local worker automatically has the additional 0.75% Phase 1 contribution. Payroll records need to reflect the employee's current participation status.

Because this is a recent 2026 change, employers should use current PERKESO instructions rather than relying on contribution guides published before the latest scheme updates.

When Is the SOCSO Contribution Payment Deadline?

SOCSO contributions for a month must generally be paid no later than the 15th day of the following month. For example, contributions relating to January wages should be paid by 15 February.

The employer is responsible for submitting the monthly payment within the required period. Payroll should therefore be finalized early enough to calculate employee wages, determine the correct contribution amount, and complete submission before the statutory deadline.

Using a consistent monthly payroll calendar helps businesses avoid late contribution payments and gives the payroll team time to correct employee data before submission.

What Happens If SOCSO Contribution Is Paid Late?

PERKESO imposes Interest on Late Payment Contributions, commonly referred to as ILPC, when contributions are not paid within the stipulated period.

The current rate is 6% per year calculated for each day of late contribution. PERKESO's FAQ also states that where the calculated late-payment interest is below RM5, the interest charged is RM5 per month.

Late contributions can therefore create additional costs even where the original monthly contribution is relatively small. Employers should reconcile contribution payments against payroll records each month instead of waiting until an audit or employee complaint reveals an unpaid amount.

How Do Employers Pay SOCSO Contributions?

Employers can manage PERKESO registration and contribution processing through the ASSIST Portal. The portal allows employers to maintain employer and employee information and process monthly contribution data.

PERKESO current instructions allow employers to enter the contribution month and employee salary through the contribution process, after which the applicable contribution can be calculated. Online payment facilities such as FPX are available through the contribution workflow.

Employers should review employee salary, age, employment status, scheme category, and applicable contribution information before completing the payment.

What Happens to SOCSO When an Employee Resigns?

When an employee resigns, the employer can update the employee's resignation date through the PERKESO ASSIST Portal. The employee's earlier contribution records remain part of the contribution history and should not simply be removed.

If the employee stops working during the middle of a month, PERKESO states that the contribution is based on the total wages actually paid for that month.

Employers should therefore complete final payroll first, calculate the SOCSO contribution on the applicable wages, submit any amount that remains due, and then ensure the employee's employment status is correctly updated.

How Long Should Employers Keep SOCSO Payroll Records?

PERKESO requires employers to maintain employee records containing details such as the employee's name, identification number, occupation, monthly wages, allowances, and contribution information.

These employee records must generally be retained for seven years from the date of the last entry.

Keeping clear payroll records can also help employers answer employee contribution questions, reconcile payments, respond to inspections, and verify that the correct wage components were used in previous calculations.

What Is the Difference Between SOCSO and EIS in Malaysia?

SOCSO under Act 4 primarily provides social security protection related to areas such as employment injury and invalidity. EIS, or the Employment Insurance System under Act 800, has a different purpose and is mainly connected with employment-loss protection for eligible workers.

The contribution rates are also separate. Standard EIS contribution is based on 0.2% from the employer and 0.2% from the employee, subject to eligibility and the current RM6,000 wage ceiling.

Employers should therefore calculate SOCSO and EIS as separate statutory payroll items even though both are administered by PERKESO. The detailed EIS rules should be handled separately rather than mixing the two contribution calculations.

Common SOCSO Contribution Mistakes Employers Should Avoid

A common mistake is calculating SOCSO only from basic salary. PERKESO's wage definition includes overtime, commissions, service charges, several leave payments, and many allowances, so these payments can change the wage band used for the month.

Another mistake is using an old RM5,000 contribution ceiling. The current ceiling is RM6,000, and employers should use the contribution schedule that reflects that amount.

Employers should also pay attention to age, foreign-worker status, and current LINDUNG 24 JAM participation. A payroll rule that was correct before the 2026 scheme changes may no longer produce the correct current contribution.

SOCSO Contribution and Payroll Software in Malaysia

SOCSO is one of several statutory items Malaysian employers need to manage during payroll. Employee wages, overtime, allowances, EPF, SOCSO, EIS, tax deductions, attendance, and employee status changes can all affect the final payroll process.

Using payroll software in Malaysia can help businesses maintain employee information and apply recurring statutory payroll rules more consistently. The system should still be updated whenever PERKESO changes contribution ceilings, contribution schedules, or employee coverage requirements.

Businesses evaluating HR software in Malaysia should consider how payroll connects with attendance, employee records, leave, onboarding, and employee status. Connected data can reduce manual entry and make it easier to identify the correct wages and contribution category during each payroll cycle.

Frequently Asked Questions About SOCSO Contribution Malaysia

How Much Does an Employee Contribute to SOCSO in Malaysia?

For the basic First Category Act 4 contribution, an eligible employee below age 60 generally contributes an amount based on 0.5% of monthly wages according to the official contribution schedule.

An additional employee contribution can apply where the employee participates in LINDUNG 24 JAM. The current Phase 1 rate for that scheme is 0.75%, subject to the applicable schedule and participation rules.

How Much Does an Employer Contribute to SOCSO in Malaysia?

For most eligible employees below age 60 under the First Category, the employer contribution is based on 1.75% of wages according to PERKESO's contribution schedule.

For employees covered under the Second Category, the employer contribution is generally based on 1.25%. The actual ringgit amount should be checked using the official wage band rather than relying only on the percentage.

Is SOCSO Contribution Based on Basic or Gross Salary?

SOCSO is based on payments that meet PERKESO's definition of wages, not simply the basic-salary or gross-salary label on a payslip.

Salary, overtime, commissions, service charges, certain leave payments, incentives, and several allowances can be included. Annual bonuses, mileage claims, and some other payments are currently excluded.

Is SOCSO Mandatory in Malaysia?

SOCSO coverage under Act 4 is mandatory for eligible employers and employees. Employers with workers who fall within the Act are responsible for registration and monthly contributions.

The separate LINDUNG 24 JAM component has different current rules: participation is voluntary for local employees but remains mandatory for foreign workers.

Does SOCSO Apply to Salaries Above RM6,000?

Yes. An employee earning more than RM6,000 can still be covered by SOCSO.

However, the current contribution wage ceiling is RM6,000. This means the contribution amount does not continue increasing in line with salary after the employee reaches the maximum contribution band.

Are Foreign Workers Required to Contribute to SOCSO?

Yes. Employers are responsible for registering eligible foreign workers with PERKESO and paying the required contributions.

Foreign workers are currently covered by employment injury and invalidity protection under the applicable rules, and LINDUNG 24 JAM has also been mandatory for foreign workers since its 2026 implementation.

What Is the SOCSO Contribution Deadline?

The monthly SOCSO contribution is generally due by the 15th day of the following month.

For example, a contribution relating to July payroll should generally be submitted by 15 August. Late payment can result in interest being imposed by PERKESO.

Can Employees Check Whether SOCSO Has Been Paid?

Employees should keep track of their registration and contribution records and raise any missing contribution with their employer or PERKESO. Employers are responsible for ensuring eligible employees are registered and that contributions are paid fully.

PERKESO also maintains digital services and contribution records that can be used as part of employee and employer account management.

Final Thoughts on SOCSO Contribution in Malaysia

Understanding SOCSO Contribution Malaysia helps employers calculate payroll correctly while maintaining the social security protection required for eligible workers. The key steps are identifying the correct employee category, determining which payments count as wages, applying the current RM6,000 contribution ceiling, and using PERKESO's latest contribution schedule.

Employers should also pay attention to recent changes such as LINDUNG 24 JAM. As of August 2026, the scheme is voluntary for local employees but mandatory for foreign workers, which means contribution settings can differ between employees.

SOCSO rules and contribution schedules can change over time. Payroll teams should review current PERKESO guidance whenever a contribution rate, wage ceiling, employee category, or protection scheme changes.

This content provides general payroll information and does not replace legal, payroll, or professional advice. Employers should refer to the latest PERKESO guidance when making decisions specific to their employees or business.