The Social Security Organization (SOCSO), known in Bahasa Malaysia as Pertubuhan Keselamatan Sosial (PERKESO), plays a vital role in providing social security protection to Malaysian employees. Both employers and employees contribute to SOCSO, ensuring coverage in case of employment injuries, invalidity, or death. Understanding how SOCSO contributions affect your net salary is crucial for both employees and employers.
What is SOCSO (PERKESO) and Its Importance?
SOCSO was established to provide social security protection by administering two key schemes:
- Employment Injury Scheme: Provides protection against workplace accidents, occupational illnesses, and commuting accidents.
- Invalidity Scheme: Offers coverage for invalidity or death not related to employment.
These schemes offer various benefits, including medical care, temporary and permanent disability benefits, dependents' benefits, and rehabilitation services.
SOCSO Contribution Categories
There are two main categories for SOCSO contributions:
- First Category: This category covers both the Employment Injury Scheme and the Invalidity Pension Scheme. It is applicable to employees who are below 60 years old except for those who have attained 55 years of age and have no prior contributions before they reach 55 due to non-eligibility under the Employees’ Social Security Act, 1969. Both employer and employee must contribute.
- Second Category: This category covers only the Employment Injury Scheme. It is applicable to employees who are 60 years old and above, or employees aged 55 and above who have no prior SOCSO contributions. Only the employer contributes; the employee does not.
SOCSO Contribution Rates
The contribution rates for SOCSO are as follows:
- Employment Injury Scheme and Invalidity Scheme (First Category):
- Employer Contribution: 1.75% of the employee's monthly wages.
- Employee Contribution: 0.5% of the employee's monthly wages.
- Employment Injury Scheme Only (Second Category):
- Employer Contribution: 1.25% of the employee's monthly wages.
- Employee Contribution: No contribution required.
Contributions are capped based on the maximum monthly salary of RM6,000, even if the employee earns more.
How SOCSO Contributions Affect Your Net Salary
SOCSO contributions are part of the statutory deductions from your gross salary. Here's how they impact your net salary:
- Gross Salary: Your total earnings before any deductions.
- Less EPF Contribution: Employee's contribution to the Employees Provident Fund.
- Less SOCSO Contribution: Employee's SOCSO contribution (if applicable).
- Less EIS Contribution: Employee's contribution to the Employment Insurance System.
- Less Income Tax (PCB) Deductions: Based on your chargeable income.
- Net Salary: The amount you take home after all deductions.
For example, if your gross salary is RM3,000:
- Employee SOCSO Contribution: RM14.75
- Net Salary Before Other Deductions: RM3,000 - RM14.75 = RM2,985.25
Use our net salary calculator Malaysia to automatically compute your take-home pay after all deductions.
Benefits of SOCSO Contributions
Contributing to SOCSO provides you with a safety net in case of unforeseen circumstances:
- Medical Benefits: Access to medical treatment at SOCSO's panel clinics and hospitals.
- Temporary Disablement Benefit: Financial aid if you're temporarily unable to work due to an employment injury.
- Permanent Disablement Benefit: Compensation for permanent disabilities resulting from workplace accidents.
- Dependents' Benefit: Financial support for dependents in the event of the employee's death.
- Invalidity Pension: Monthly pension for employees suffering from invalidity not related to employment.
How to Check Your SOCSO Contributions
You can monitor your SOCSO contributions through the following methods:
- Online Portal: Register and log in to the Assist Portal on the SOCSO website to view your contribution history.
- SOCSO Offices: Visit any SOCSO office for assistance with your contribution statements.
SOCSO Claims and Procedures
If you need to make a claim, follow these steps:
- Report the Incident: Inform your employer immediately about any workplace injury or illness.
- Seek Medical Attention: Visit a SOCSO panel clinic or hospital for treatment.
- Submit Claim Forms: Complete and submit the required claim forms through your employer.
- Await Approval: SOCSO will assess your claim and notify you of the outcome.
For detailed information on the claims process, refer to the SOCSO website or contact their customer service.
Calculate Your Net Salary with SOCSO Contributions
Understanding how SOCSO contributions impact your net salary is essential. Use our salary calculator Malaysia to determine your take-home pay after SOCSO and other statutory deductions like EPF, EIS, and income tax.
Click here to access the SOCSO calculator
Conclusion
SOCSO contributions are a crucial part of Malaysia's social security system, offering protection and benefits to employees. By understanding your contributions and the benefits available, you can ensure that you're adequately covered while effectively managing your finances.