Overview of Social Security Organization (SOCSO)

Overview of Social Security Organization (SOCSO)

Introduction

  1. Social Security Organization (SOCSO), also known as Pertubuhan Keselamatan Sosial (PERKESO), is a Malaysian government agency established to provide social security protections to employees and their dependents through the resource-pooling, risk-sharing, and income-replacement.
  2. SOCSO contributions are made by both employees and employers. Every private company is required to contribute SOCSO for its staff/workers and to remit the contribution sum to KWSP before the 15th day of the following month. For example, the SOCSO contribution for March 2020 payroll must be paid to PERKESO by 15 April 2020. In this case, March 2020 is the payroll month and April 2020 is the contribution month. 
  3. SOCSO offers 2 protections schemes, namely the Employment Injury Scheme to protect employees from occupational injuries, including occupation diseases and accidents, and the Invalidity Scheme that provides 24-hour protection to employees against invalidity or death due to any cause outside working hours and not related to employment.
  4. Both SOCSO schemes provide financial benefits to employees and their dependents besides providing medical treatment, physical rehabilitation, or vocational training.

Eligibility
Employer :
  1. A principal employer who hires employees directly under a contract of service/apprenticeship.
  2. An immediate employer who hires employees to work under the supervision of the principal employer. This includes the employer who temporarily lends/leases the service of his employee to a principal employer.
Employee :
  1. All private-sector employees; citizens, permanent residents, and foreign workers.
  2. Employees who are exempted from SOCSO coverage are government employees, domestic servants, self-employed individuals, and spouses of a sole proprietor or a partnership owner. 

Roles of SOCSO
  1. Employer/employee registration.
  2. SOCSO contribution collection from employers comprising of employer and employee contribution.
  3. Payment of benefits to employees or their dependents when tragedy strikes.
  4. Provision of physical and vocational rehabilitation benefits.
  5. Promotion of awareness of occupational safety and health. 

Contribution
  1. Employers must pay monthly contributions for each eligible employee as per the rate specified under the Employee's Social Security Act, 1969. The SOCSO contribution is divided into 2 categories as shown in table 1 below. 
  2. The contributions by both employer and employee depend on the individual employee's monthly SOCSO wages. 
  3. SOCSO wages consist of the employee's monthly wages that contribute to SOCSO, capped at RM 4,000.00. 
  4. The amount of contribution is based on the Rate of Contribution table by SOCSO. 

Table 1. SOCSO Categories






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