SOCSO & EIS Contributions in Malaysia: What Gets Deducted and Why

Look at your payslip and you will find two lines that quietly reduce your take-home pay every month: SOCSO and EIS. Most employees accept these deductions without a second thought. But both are genuine social safety nets — and knowing what you are entitled to can make a real difference if you are ever injured at work, become permanently disabled, or lose your job unexpectedly.

This guide explains what each scheme covers, how contributions are calculated for 2026, and how to claim your benefits if you need them.

What is SOCSO (PERKESO)?

SOCSO stands for the Social Security Organisation. In Malay it is known as PERKESO — Pertubuhan Keselamatan Sosial. It was established under the Employees’ Social Security Act 1969 and remains one of Malaysia’s oldest statutory social protection bodies.

SOCSO operates two distinct insurance schemes under the same Act. They protect you in different situations, so it is worth understanding each one separately.

Employment Injury Scheme

This scheme covers any injury or illness that arises from or in connection with your work. That includes:

• Accidents that happen at the workplace during working hours
• Accidents that happen while commuting between your home and workplace (under certain conditions)
• Occupational diseases — illnesses caused by the nature of your work, such as hearing loss from prolonged exposure to industrial noise or respiratory conditions from chemical exposure

If you are covered under this scheme and suffer a qualifying injury, SOCSO steps in to pay for treatment and to compensate you for income lost during recovery. If the injury is fatal, your dependants receive survivor benefits.

All employees who are eligible for SOCSO — including foreign workers — are enrolled in the Employment Injury Scheme.

Invalidity Scheme

This scheme covers permanent disability or death that is unrelated to work. If you become permanently disabled due to an accident outside of work, a serious illness, or any other non-work cause, and you meet the contribution threshold, SOCSO will pay you a monthly invalidity pension.

The Invalidity Scheme is available only to Malaysian citizens and permanent residents. Foreign workers are not enrolled. Employees above age 60 also exit this scheme, though they continue contributing to the Employment Injury Scheme.

What is EIS (SIP)?

EIS stands for the Employment Insurance System. In Malay it is called SIP — Sistem Insurans Pekerjaan. Despite being managed by the same body (PERKESO), EIS is legally and operationally separate from SOCSO. It was established under the Employment Insurance System Act 2017 and contributions began in January 2018.

Where SOCSO protects you against injury and disability, EIS protects you against job loss. If your employer retrenches you, the company shuts down, or your fixed-term contract expires without renewal, EIS provides temporary financial support and helps you get back into employment.

EIS does not cover voluntary resignations or dismissals for misconduct. The scheme is designed strictly for involuntary job loss.

SOCSO Contribution Rates

Both the employee and the employer contribute to SOCSO every month. Contributions are based on the employee’s actual monthly wages, but they are capped at a salary ceiling of RM5,000. An employee earning RM8,000 contributes the same amount as one earning RM5,000.

For employees under 60 years old (enrolled in both the Employment Injury and Invalidity schemes), the effective rates are approximately:

• Employee: ~0.5% of monthly wages
• Employer: ~1.75% of monthly wages

The exact ringgit amounts are determined by contribution tables published by PERKESO, not by a simple percentage calculation. The table below shows the approximate monthly contributions at common salary levels:

Amounts are approximate. Exact figures follow the PERKESO contribution table. See our SOCSO contribution rate table for a complete breakdown by salary band.

For employees aged 60 and above, only the Employment Injury Scheme applies. The contribution rates are lower, and the employer shoulders the cost alone — the employee stops paying into SOCSO at age 60.

EIS Contribution Rates

EIS contributions are simpler. Both employee and employer each pay 0.2% of monthly wages, for a combined total of 0.4%. Like SOCSO, EIS has a salary ceiling of RM5,000 per month.

This means the maximum any employee contributes to EIS is RM10.00 per month (0.2% × RM5,000), and the employer matches that amount.

For most employees, the EIS deduction is small — but the benefit it unlocks in a retrenchment scenario can be substantial.

Who Must Contribute?

SOCSO and EIS are mandatory for the following employees:

• All private sector employees who are Malaysian citizens or permanent residents
• Aged 18 to 60 (for both SOCSO schemes and EIS)
• Employees above age 60 continue contributing to the Employment Injury Scheme only

Foreign workers must contribute to the Employment Injury Scheme (not the Invalidity Scheme) since the rule change took effect in January 2019. They are not enrolled in EIS.

Who is exempt:

• Domestic workers (housemaids, gardeners, drivers employed privately) are not covered by mandatory SOCSO
• Government employees have separate public-sector social protection schemes
• Self-employed individuals are not automatically covered, but PERKESO operates a voluntary Self-Employment Social Security Scheme (since 2017) that self-employed workers can opt into for Employment Injury coverage

If you are an employer, failure to register employees or remit contributions is a criminal offence under the Employees’ Social Security Act. Penalties include fines and payment of arrears with interest.

SOCSO Benefits — What You Are Entitled To

Employment Injury Benefits

If you are injured at work or develop an occupational disease, the Employment Injury Scheme provides:

Medical treatment: Free treatment at SOCSO-panel hospitals, clinics, and rehabilitation centres. There is no out-of-pocket cost for eligible treatment.

Temporary Disablement Benefit: If you are unable to work during recovery, SOCSO pays you 80% of your assumed daily wage for each day you are certified unfit for work. This benefit continues until you recover or your condition is assessed as permanent.

Permanent Disablement Benefit: Once your condition is assessed, SOCSO determines the percentage of permanent disability. If the assessment is 20% or higher, you receive a monthly pension. Below 20%, you receive a lump sum payment.

Death Benefit: If a workplace injury or occupational disease results in death, SOCSO pays:

• A survivor’s pension to the eligible dependants (spouse, children)
• A funeral benefit (one-time payment) to cover funeral expenses

To trigger a claim, you must report the injury to your employer within 48 hours, and your employer is legally required to notify SOCSO. Do not delay — late reporting can complicate or invalidate a claim.

Invalidity Benefits (Non-Work-Related)

If you suffer permanent disability or a serious illness that is not work-related, and you have made at least 24 months of SOCSO contributions at any point in your working life, you may qualify for the Invalidity Pension — a monthly payment from SOCSO for the rest of your life (or until you recover, if applicable).

If you have fewer than 24 months of contributions but still meet the disability criteria, you may instead receive a one-off Invalidity Grant.

EIS Benefits — When You Lose Your Job

If you are retrenched, your company closes, or your fixed-term contract expires without renewal, you can claim the following through EIS:

Job Loss Allowance: A monthly allowance paid for up to 6 months following your job loss. The amount is calculated as a percentage of your previous insured salary, and it decreases progressively over the 6-month period. The first month pays the highest amount; subsequent months pay less.

Early Re-employment Incentive: If you find a new job before your 6 months of allowance run out, you receive a lump-sum bonus for the remaining months. This incentivises quick re-entry into the workforce rather than waiting out the full benefit period.

Training Fee Assistance: PERKESO can fund approved skills training programmes, up to RM4,000, to help you upskill or retrain for a new role.

Reduced Income Allowance: If you re-enter employment but at a lower salary than your previous position, EIS can supplement the difference for a limited period.

How to claim: Submit your claim through the SIP portal at mysip.perkeso.gov.my within 60 days of your last day of employment. You will need your IC, proof of termination (e.g., retrenchment letter or Form CP22A from your employer), and your bank account details for payment.

Missing the 60-day window can result in losing your entitlement entirely, so act promptly after losing your job.

How to Make a SOCSO Claim

For workplace injuries:

1. Report the injury to your employer within 48 hours of the incident
2. Your employer submits a report (Form 34 or equivalent) to SOCSO
3. Seek treatment at a SOCSO-panel hospital or clinic — bring your IC and SOCSO card
4. SOCSO processes the claim; medical bills are settled directly with the panel provider

For invalidity claims:

1. Visit any SOCSO branch office with your IC and relevant medical documentation
2. SOCSO will arrange a medical board assessment to determine the degree of invalidity
3. Upon approval, your monthly pension or lump sum will be disbursed

Documents typically required for any SOCSO claim:

• National identity card (MyKad)
• Medical records and treating doctor’s reports
• Employer’s contact details and your employment records
• For death claims: marriage certificate and birth certificates of dependants

Checking Your Contributions

Your employer is legally required to remit your SOCSO and EIS contributions to PERKESO each month. In practice, some employers — particularly smaller businesses — fall behind or fail to contribute at all, leaving employees without coverage when they need it most.

You can verify your contribution history through the PERKESO member portal at portal.perkeso.gov.my. Log in with your IC number to view your full contribution statement.

If your employer has not been contributing:

• Your SOCSO claims may be rejected or reduced
• You can lodge a formal complaint with PERKESO or the Department of Labour (Jabatan Tenaga Kerja)
• Employers who fail to contribute face fines, compulsory payment of all arrears with late payment charges, and in serious cases, criminal prosecution

This is also a good reason to check your payslip carefully each month. The SOCSO and EIS deductions should appear as line items — if they do not, ask your HR department for clarification.

Key Takeaways

SOCSO and EIS are not just payroll deductions — they are protection you have already paid for. Here is a quick summary to keep in mind:

• SOCSO (Employment Injury Scheme) covers workplace accidents, commuting accidents, and occupational diseases — for all eligible employees including foreign workers
• SOCSO (Invalidity Scheme) covers permanent disability and death unrelated to work — for Malaysian citizens and PRs only
• EIS covers involuntary job loss (retrenchment, company closure) — providing up to 6 months of allowance plus training support
• Both schemes are capped at a RM5,000 monthly salary ceiling
• Claim EIS within 60 days of losing your job
• Check your contribution history at portal.perkeso.gov.my to ensure your employer is paying on your behalf

Understanding these two schemes puts you in a much stronger position — whether you are planning your finances, dealing with an unexpected job loss, or navigating a workplace injury.