What is SOCSO Malaysia and How Does It Work?

As a mandatory requirement for most private sector businesses, SOCSO Malaysia involves contributions and responsibilities. In this article, we'll break down why employers need to register their employees, how the contribution system works, and what happens when an employee experiences a work-related injury or illness or faces long-term inability to work. We'll also cover the 2026 update to the Lindung 24 Jam scheme, so you can confirm your payroll settings are accurate before your next pay run. Understanding SOCSO Malaysia is crucial for employers to comply with the law and ensure the well-being of your workforce.

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What is SOCSO Malaysia?

SOCSO Malaysia stands for Social Security Organization, also known as PERKESO (Pertubuhan Keselamatan Sosial).

Purpose of establishment

SOCSO Malaysia was established on 1 January 1971, under the Employees’ Social Security Act 1969. Its primary purpose is to provide social security protection to employees and their dependents in Malaysia. 

SOCSO operates as a statutory body under the Ministry of Human Resources, aiming to safeguard the welfare of workers during unforeseen circumstances such as workplace accidents, occupational diseases, invalidity, or death. This establishment was part of Malaysia’s broader effort to develop a comprehensive social security system based on recommendations from the International Labour Organization (ILO) in the 1960s.

Core functions

SOCSO carries out several key functions to ensure the well-being and security of Malaysia's workforce:

• Implementation of Social Security Schemes
• Invalidity Pension Scheme
• Accident Prevention and Health Promotion
• Financial Assistance and Rehabilitation
• Return-to-Work (RTW) Program
• Human Resource Development

Main objectives

SOCSO aims to:

• Be an outstanding, comprehensive, and dynamic leader in social security.
• Provide inclusive social security protection from cradle to grave, ensuring the well-being of all employees and their dependents.

What is the eligibility and SOCSO contribution?

In Malaysia, SOCSO contributions are mandatory for all employers with at least one employee. This requirement applies to Malaysian citizens and permanent residents employed in the country, as well as to foreign workers with valid work permits. 

Self-employed individuals are also required to contribute under the Self-Employment Social Security Scheme (SESS). Once an employee’s monthly earnings exceed RM100, contributions become compulsory.

The contribution structure generally involves both employer and employee contributions. For the Employment Injury Scheme, the employer contributes the full amount. The Invalidity Scheme and Employment Insurance System (EIS), on the other hand, require joint contributions from both the employer and the employee.

SOCSO also adjusts contribution obligations based on age. Employees under the age of 60 contribute at the standard rate and are covered under all schemes. However, once an employee reaches 60, only contributions to the Employment Injury Scheme are required, at a reduced rate. This is because older employees are no longer eligible for Invalidity Scheme benefits.

In recent years, SOCSO has introduced several key changes to strengthen its protection. In 2022, the maximum monthly salary ceiling for contribution calculation was raised from RM4,000 to RM5,000, allowing higher-income workers to receive more comprehensive benefits. Coverage was also expanded to include previously excluded sectors, and new benefits were added under the EIS. In 2023, SOCSO extended greater protections to gig economy workers, recognizing the evolving nature of employment in sectors such as food delivery, freelancing, and ride-hailing. Most recently, in 2026, the Lindung 24 Jam scheme moved from mandatory to optional for local employees. See the full breakdown below.

Read next: Understanding Malaysia’s Employment Act: Updates & FAQs

To support the growing self-employed population, the Self-Employment Social Security Scheme was launched and initially made compulsory for taxi and e-hailing drivers. Over time, it has been expanded to include individuals in agriculture, fishing, and food delivery services. 

Contribution rates under this scheme vary based on the insured income you select, ranging from RM157.20 to RM592.80 annually. The scheme provides critical benefits such as medical coverage, permanent disablement compensation, dependents' benefits, and funeral expenses, helping ensure self-employed workers aren't left vulnerable in times of need.

SOCSO Contribution Table

SOCSO Lindung 24 Jam Scheme: 2026 Update

Lindung 24 Jam (Skim Kemalangan Bukan Bencana Kerja) is SOCSO's round-the-clock personal accident scheme, covering employees for accidents that happen outside the scope of the standard Employment Injury Scheme, at any time, anywhere.

As of 2026, participation rules differ by employee type:

• Local employees (Malaysian citizens and permanent residents): optional. Following Cabinet's review of public feedback on the scheme, you can now choose whether to contribute based on your individual needs and circumstances.
• Foreign workers: mandatory. Contributions continue to be implemented in accordance with existing legal provisions, with no change to this requirement.

This is a change from the scheme's original implementation, which required contributions from all employees regardless of citizenship status. The update followed a Cabinet review of feedback gathered after the scheme's initial rollout.

What this means for your payroll: Because local employee participation is now a choice rather than a default, you'll want to confirm each employee's selection is captured accurately in your payroll system. The wrong setting means either an unwanted deduction or a missed contribution.

Action for payroll administrators: Review and verify the Lindung 24 Jam contribution selection for every existing employee before your next payroll run. This confirms each setting reflects the employee's actual preference (for local staff) or the statutory requirement (for foreign workers).

Omni HR's payroll platform supports this update with a configurable Yes/No field for Lindung 24 Jam at the employee level. Set the selection once, and our payroll engine automatically applies or excludes the contribution accordingly, with no manual calculation needed each pay cycle.

For the full contribution structure, exclusions, and payroll illustration examples, see PERKESO's official Lindung 24 Jam page.

What are the key schemes of SOCSO Malaysia?

Employment Injury Scheme

The Employment Injury Scheme provides coverage for employees who experience accidents or contract occupational diseases due to their work.

This protection encompasses the following:

Work accidents: These happen while you're performing your job duties at the workplace, or in some cases, even off-site if you're conducting work-related tasks. This can also include accidents that occur during work-related travel.

Commuting accidents: These occur to an employee during specific journeys directly related to their employment.

Emergency accidents: These refer to an accident that occurs to an employee while they're at or near their workplace for the purpose of rescuing, assisting, or protecting other people from a disaster or danger during an emergency.

Occupational disease: A disease caused by or arising from your work or specific occupation. The specific diseases and the occupations linked to them are detailed in the Fifth Schedule of the relevant Act.

Invalidity scheme

The SOCSO scheme offers around-the-clock protection to employees who become invalid (due to a serious, permanent health condition) or die from any cause that is NOT related to their job. This means that even if the invalidity or death happens outside of work hours or is due to a non-work-related illness or accident, you or your family may still be eligible for benefits under the SOCSO Invalidity Scheme.

What are the benefits that SOCSO Malaysia provides

SOCSO plays a vital role in safeguarding Malaysian workers by offering a comprehensive range of benefits that protect you from the financial consequences of workplace accidents, injuries, and illnesses.

It ensures that workers, especially those from lower-income groups, have access to essential medical care without facing burdensome costs. By covering medical expenses and providing compensation through schemes like the Employment Injury Scheme and Invalidity Scheme, SOCSO helps maintain income security for those temporarily or permanently unable to work due to job-related health issues.

Beyond individual protection, SOCSO Malaysia also supports families by offering dependents' benefits in the unfortunate event of a worker's death. This financial support helps prevent families from falling into poverty and provides a degree of stability during difficult times. The system also encourages employers to prioritize workplace safety, since they contribute to the fund and are incentivized to reduce workplace risks.

Overall, SOCSO not only strengthens Malaysia's social safety net but also contributes to economic productivity and social equity by ensuring that the risks of employment are shared collectively rather than shouldered solely by workers. Platforms like Omni HR help take the administrative weight off this process by automatically calculating SOCSO, EIS, and Lindung 24 Jam contributions, so nothing falls through the cracks as regulations evolve.

Additional reading: Navigating HR Compliance in Malaysia

How does SOCSO Malaysia work?

Registration process

You must register your business and employees using Form 1 (Employer’s Registration) and Form 2 (Employee’s Registration) through the SOCSO ASSIST Portal or at the nearest SOCSO office. 

Employees will then be assigned a SOCSO number, which will be used for tracking contributions and claims. According to SOCSO Malaysia regulations, you must register within 30 days of hiring your first employee.

Contribution calculation and payment

Basic Formula

The standard combined rate is 2.5% of monthly wages for both the Employment Injury Scheme and the Invalidity Pension Scheme.

• Employer contributes 1.75%
• Employee contributes 0.75%

How to Calculate:

1. Identify the employee's monthly wage (salary + allowances)
2. If wage exceeds RM5,000, use RM5,000 as the calculation base
3. Apply the employer rate (1.75%) to calculate the employer's contribution
4. Apply the employee rate (0.75%) to calculate the employee's contribution

Example
‍For an employee earning RM3,000 per month:
Employer contribution: RM3,000 × 1.75% = RM52.50
Employee contribution: RM3,000 × 0.75% = RM22.50
Total SOCSO contribution: RM75.00

Most employers use SOCSO's official contribution tables or payroll software that automatically calculates the exact amounts based on salary ranges. Payments are made monthly by the 15th of the following month via the ASSIST Portal or through appointed banks.

Relevant resource: Malaysia EPF calculator

Claiming benefits

Claiming benefits means formally applying to SOCSO to receive financial or other forms of assistance and support as provided under the Employees' Social Security Act 1969. This is done when you or your dependents meet specific eligibility criteria due to events such as employment injury, invalidity, or death of an insured person.

Rehabilitation services

Part of the SOCSO Malaysia scheme comes with rehabilitation, offered through its rehabilitation centers, such as the Tun Abdul Razak Rehabilitation Centre.

Services include:

• Physiotherapy
• Occupational therapy
• Vocational training
• Return-to-work programs
• Psychological counseling

Rehabilitation is aimed at helping injured workers regain their independence and return to the workforce when possible.

How do I claim SOCSO benefits?

The process of claiming benefits generally involves the following steps:

1. Report the Incident: Inform your employer immediately after a workplace injury or diagnosis of a work-related illness. Employers must report the incident to Perkeso within 48 hours using Form 21 (Accident Report Form).
2. Medical Check-Up and Treatment: Seek medical attention at a SOCSO panel clinic or a government hospital. The attending doctor will issue a medical certificate (MC) to confirm the condition. If hospitalization or specialist treatment is required, SOCSO may approve and cover the associated medical expenses.
3. Submit Claim Documents: Once treatment has been received, submit the required claim documents to SOCSO, either online through the ASSIST Portal or in person at the nearest SOCSO office. The employer or the employee may submit the claim.
4. Review and Approval: SOCSO will review the claim, which may include interviews or requests for additional documents to verify the case. Once approved, compensation or benefits are transferred directly to the claimant's registered bank account.

Make Statutory Payments Easy with Omni Payroll

Navigating the ever-evolving regulations when it comes to SOCSO Malaysia can be challenging, and staying up to date with the latest mandates is crucial for HR teams to remain compliant. That’s why it’s important to have the right tools by your side.

Omni’s all-in-one HR software helps you stay up to date with the latest laws and regulations for SOCSO Malaysia while streamlining the end-to-end employee management lifecycle. Our comprehensive payroll solution is tailored to Malaysia’s specific requirements. With features like support for MYR, automated SOCSO contribution calculations, and instant payroll reports, Omni can help HR teams simplify their payroll processing while ensuring compliance with the Employees' Social Security Act.

Book a demo with our team today!

Start your 7-day free trial and see how Omni can simplify the intricacies and complexities of SOCSO Malaysia contributions and minimize the costs associated with common errors.