Effective 1st September 2022, PERKESO has enforced a new wage ceiling for contributions from RM4,000 to RM5,000 per month.

In Malaysia, employers must comply with the Social Security Organization (SOCSO) and Employment Insurance System (EIS) payment contributions. Understanding the payment amounts ensures legal compliance and protects employees’ social security. This blog post concisely guides how much you should make for SOCSO and EIS payments in Malaysia.

Understanding SOCSO & EIS Payment Contributions:

SOCSO is a social security scheme that safeguards employees in Malaysia against work-related accidents and disabilities.

EIS is Employment Insurance Scheme which is aimed at helping employees who lost their jobs until they find new employment.

Employers and employees are responsible for monthly contributions to SOCSO and EIS, ensuring protection and support.

SOCSO Payment Contribution Rates:

1. Employee age below 60

●  Payment according to First Category (Employment Injury Scheme and Invalidity Scheme) of SOCSO

2. Employee age above 60 and Non-Malaysian

●  Payment according to Employee age below 60
●  Payment according to Second Category (Employment Injury Scheme and Invalidity Scheme) of SOCSO

Contribution rates are set out under the Employees’ Social Security Act, 1969.

EIS Payment Contribution Rates:

All Malaysian employees aged 18 to 60 are required to contribute.

Contributions to the Employment Insurance System (EIS) are set at 0.4% of the employee’s assumed monthly salary. 0.2% will be paid by the employer while 0.2% will be deducted from the employee’s monthly salary.

Contribution rates are set out in the Second Schedule and subject to the rules in Section 18 of the Employment Insurance System Act 2017.

For better clarification, please visit
https://www.perkeso.gov.my/en/rate-of-contribution.html.

Importance of SOCSO & EIS Payment Contributions:

Meeting SOCSO and EIS requirements showcases your commitment to employee welfare and protects against legal liabilities. By fulfilling your obligations and making timely contributions, you ensure the financial security of your workforce during work-related incidents.

Employers must understand the appropriate payment amounts for SOCSO and EIS contributions in Malaysia. Adhering to the prescribed rates protects your employees and meets legal requirements, ensuring their financial security during challenging times. Stay compliant and prioritize the well-being of your workforce by accurately calculating and making timely SOCSO and EIS payment contributions.

Be aware of the significance of proper SOCSO and EIS payment contributions in Malaysia. Take action now and trust Evoresource to handle your compliance needs.

*The information provided above is updated as of 13th June 2023. For more information, please get in touch with us by getting to know our payroll outsourcing & HR solutions services.