Understanding SOCSO: Why It Exists and Who It Protects
The Employees’ Social Security Act 1969 governs SOCSO, which started working on January 1, 1971. It has always aimed to provide social security protection to employees who face job-related injuries, disabilities, illnesses, or death. SOCSO grew beyond factory floors as time passed. Now, it covers office employees, contract staff temporary workers foreign employees (under specific plans), and even Malaysia’s fast-growing gig workforce through the Self-Employment Social Security Scheme (SESSS). This growth shows how Malaysia’s job scene has changed where old-school jobs exist alongside flexible gig roles. SOCSO eases employees’ worries about income loss during hard times. It boosts employee morale and helps businesses follow the law.Two Key SOCSO Schemes Every Employer Should Know
SOCSO offers two main plans. Each protects employees in different situations covering them both at work and outside.1. Employment Injury Scheme
This plan covers workplace injuries, travel accidents, and job-related illnesses. If a employee has an accident on the way to work gets sick from workplace conditions, or suffers an injury during work hours, SOCSO pays for medical care short-term income support, disability benefits, and help for dependents.2. Invalidity Scheme
This plan safeguards employees who get long-term sick become disabled forever, or die from any cause – not just job-related accidents. It covers serious health problems like strokes, heart issues, cancer, or any lasting inability to work. The plan includes disability pensions extra help for those needing constant care, money for funerals, and school support for dependents. When combined, these plans offer full protection throughout a employees’ career.SOCSO Contribution Rates: What Employers and Employees Pay
SOCSO payments depend on monthly wages and change based on age and job type. Employees under 60 pay along with their employer. Emploees 60 and older pay differently because the Disability Plan no longer applies to them. Here’s the official breakdown for contributions:SOCSO Contribution Table (2025)
| Category | Employer Contribution | Employee Contribution | Scheme Coverage |
| Below 60 | 1.75% of wages | 0.5% of wages | Employment Injury + Invalidity |
| 60 and Above | 1.25% of wages | No deduction | Employment Injury Only |
| First-time contributors after age 55 | 1.25% | No deduction | Employment Injury Only |
What Employees Get Through SOCSO
SOCSO perks cover more than just doctor bills. They include:- Complete medical care, including operations, hospital stays physical therapy, and doctor appointments.
- Pay replacement while getting better from short-term disability.
- Regular payments for long-term disability or inability to work.
- Family support if an insured employee dies.
- Recovery services such as physical therapy, job retraining artificial limbs, and finding new work.
- Help with schooling for kids of insured people.
SOCSO’s Part in the Gig Economy
As the number of e-hailing drivers, delivery riders online freelancers, and gig workers grows, SOCSO has introduced the SESSS (Self-Employment Social Security Scheme). This scheme gives freelancers a choice, but experts suggest they join because they don’t have employers to pay for SOCSO contributions. SESSS offers them medical coverage, income replacement, disability pensions, and benefits for their dependants. This move shows SOCSO wants to keep Malaysia’s social protection up-to-date as new ways of working pop up.Employer Responsibilities: You Must Follow the Rules
A company needs to register employees with SOCSO within 30 days of hiring. Employers must pay monthly contributions on time, keep accurate payroll records, and report accidents when workplace incidents happen. Not following these rules can lead to fines legal problems, and audits. SOCSO rates and rules change often so more employers now use HRMS platforms like Info-Tech to handle SOCSO. Doing calculations by hand often causes mistakes — when dealing with EPF EIS, and PCB together. HR software updates statutory formulas, creates contribution reports, and makes sure submissions meet LHDN and PERKESO requirements. To Learn More About Staying Compliant, Check Out Common Payroll Compliance Pitfalls in MalaysiaHR & Accounting Software Simplifies SOCSO Management
Malaysian SMEs struggle not with understanding SOCSO, but with managing it well. Manual payroll using spreadsheets can cause small mistakes leading to wrong payments or missed contributions. New software fixes these problems. It figures out SOCSO for each employee based on their age, pay, and type. It uses the right rates updates any rule changes, and creates files ready for PERKESO. This cuts down on paperwork, makes everything more exact, and keeps you following the rules without any guessing. Our article Payroll Outsourcing vs. In-House Payroll shows why many SMEs now pick automated systems over doing things by hand.SOCSO: A Quick Look (Summary Table)
| Aspect | Details |
| Governing Act | Employees’ Social Security Act 1969 |
| Managed by | PERKESO |
| Schemes | Employment Injury, Invalidity |
| Contribution Rate (Below 60) | Employer 1.75% + Employee 0.5% |
| Contribution Rate (60+) | Employer 1.25% |
| Benefits | Medical, disability, dependants’ pensions, rehab, education aid |
| Coverage | Employees, contract workers, gig workers (SESSS) |
| Employer Duties | Register employees, contribute monthly, report accidents |
Closing Thoughts
SOCSO is more than just a legal requirement. It acts as a nationwide safety net giving Malaysian employees protection, respect, and financial security throughout their careers. For companies, SOCSO shows ethical duty, rule-following, and long-term staff stability. As Malaysia’s workforce grows more varied and tech-savvy, handling SOCSO well needs tools that cut down on manual tasks and boost precision. Info-Tech’s HR & Accounting Software does SOCSO math , works with payroll, and gets ready for official filings — giving businesses trust and calm. Want to make SOCSO, EPF, and payroll easier in your company? Check out our HR & Accounting Software for Malaysia now. Contact Us For a FREE Demo!!Frequently Asked Questions:
What is SOCSO in Malaysia?
SOCSO also known as PERKESO, is the national social security organization in Malaysia. It aims to provide financial protection to employees when workplace injuries, disabilities, illnesses, or death occur. The Employees’ Social Security Act 1969 governs its operations, and it covers millions of employees across the country.
Who must contribute to SOCSO?
In Malaysia, all employers need to sign up their employees and pay based on salary and age group. If an employee is under 60, both the employer and employee make contributions. For employees over 60, the Employment Injury Scheme is the only coverage they receive.
What benefits does SOCSO provide?
SOCSO covers medical care short-term and long-term disability payouts, pensions for dependents, burial costs, rehab services, and school support for kids.
Can gig workers register for SOCSO?
Yes. SOCSO offers the Self-Employment Social Security Scheme (SESSS) letting freelancers and gig workers like Grab drivers or delivery riders get protection by paying their own contributions.
Why is SOCSO compliance important for employers?
Compliance keeps employees safe, helps avoid legal fines, and makes sure statutory reports are correct. Many companies use HRMS software to handle SOCSO calculations and cut down on manual mistakes.