You see a “SOCSO” deduction on your payslip every month, but do you really know what it’s for and the full range of protections it offers? The Social Security Organisation (SOCSO), also known as PERKESO in Malay, is far more than just a monthly deduction—it’s a critical social security safety net for Malaysia’s workforce.

Established under the Employees’ Social Security Act 1969, SOCSO provides comprehensive protection to employees and their dependants against workplace accidents, illness, disability, and death. Understanding these benefits is crucial for every employee, and managing contributions correctly is a legal obligation for every employer.

The Two Pillars of SOCSO Protection

SOCSO coverage is primarily divided into two main schemes, each providing a different type of protection:

1. The Employment Injury Scheme This scheme provides protection for employees against accidents and occupational diseases that arise out of and in the course of their employment. This includes:

• Accidents at the workplace.
• Accidents while travelling for work-related reasons.
• Accidents while commuting to and from work.
• Occupational diseases (illnesses caused by the nature of the job).

2. The Invalidity Scheme This scheme provides 24-hour coverage for employees against invalidity (a permanent condition that prevents them from working) or death due to any cause, which does not need to be related to their work. To be eligible for this, an employee must be under 60 years of age and meet certain contribution qualifying conditions.

A Detailed Breakdown of Your Benefits

The simple list of benefits you provided can be expanded into a more detailed breakdown under the two schemes:

Benefits under the Employment Injury Scheme:

• Medical Benefit: Free medical treatment at SOCSO panel clinics or government hospitals.
• Temporary Disablement Benefit: Financial payments for employees who are on medical leave for at least 4 days due to a work-related injury.
• Permanent Disablement Benefit: Financial payments for employees who suffer a permanent disability from a work-related injury.
• Constant Attendance Allowance: An allowance paid to employees with a permanent total disability who require constant personal assistance.
• Dependant’s Benefit: A monthly pension paid to the dependants of an employee who dies as a result of a work-related injury.
• Funeral Benefit: A one-time payment to the family of a deceased employee.
• Education Benefit: Financial assistance in the form of loans or scholarships for the children of employees who have died or are permanently disabled due to a work-related injury.

Benefits under the Invalidity Scheme:

• Invalidity Pension: A monthly pension for employees who are certified as having a permanent invalidity that prevents them from working.
• Survivor’s Pension: If an employee dies (for any reason), their dependants will receive a monthly pension for life.

What About Foreign Workers?

Yes, foreign workers are also required to be protected under SOCSO. However, it’s important to note:

• Foreign workers are covered only under the Employment Injury Scheme. They are not covered by the Invalidity Scheme.
• The contribution of 1.25% of the employee’s monthly wage for this scheme is borne entirely by the employer.

Employer’s Responsibilities: The Critical Duties

For employers, managing SOCSO is a key legal responsibility that includes:

• Registration: You must register your company and each new employee with PERKESO.
• Timely Contributions: You must ensure that both the employer’s and employee’s shares are paid to PERKESO by the 15th of the following month.
• Reporting Accidents: You are legally required to report all work-related accidents involving your employees to PERKESO within 48 hours.

Failing to do so can result in penalties and fines.

SMONE: Your Partner in Payroll Compliance

Managing statutory contributions like SOCSO, EPF, and EIS is a critical and time-consuming task. Errors or late payments can lead to significant penalties and can jeopardize your employees’ access to their rightful benefits when they need them most.

SMONE’s Payroll & HR Compliance service takes this burden off your shoulders. We ensure that all your statutory contributions are calculated accurately based on the latest schedules and submitted on time, every time. Let us handle the compliance, so you can focus on building a safe and productive team.

Contact us today to learn more.

(Disclaimer)
This article is for general informational purposes only. Please refer to the official PERKESO website (www.perkeso.gov.my) for the most current and complete information on schemes, benefits, and contribution rates.