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Malaysia - Responsibility of Employer to Register for SOSCO & EIS with PERKESO in Malaysia

Statutory Body: PERTUBUHAN KESELAMATAN SOSIAL(PERKESO)

Social Security Organization (SOCSO)

1) Registration

Employer and its employees must be registered with PERKESO not later than 30 days on which the Act becomes applicable to the industry. For the purpose of registration, an employer is required to complete the Employer’s Registration Form (Form 1) together with relevant documents specified.

Registration of New Employees

Employers who take on a new employee is eligible under the Act shall register the employee form 2, regardless of whether the employee ever registered and make contributions to PERKESO while working at a previous employer.

Employee’s Record

  • Every employer shall maintain a monthly record with following particulars for each employee:
    i.   Name
    ii.  National Registration Identity Card Number
    iii. Occupation
    iv. Contribution details
    v.  Monthly wages
    vi. Allowances
  • The employees record shall be maintained for seven (7) years from last entry date.

Definition Of Wages

Any  remuneration payable in money to an employee is taken as wages for purpose of SOCSO Co.This includes the following payments:

i. Salary
ii.Overtime payments
iii.Commission and service charge
iv.Payments for leave; such as annual, sick, maternity, rest day, public holidays and etc
v.Allowances such as incentives, shift, food/meal, cost of living, housing and etc

All payments made to an employee paid at an hourly rate, daily rate, weekly rate, piece or task rate is considered as wages. However the following payments are not considered as wages :

i.Payments by an employer to any statutory fund for employees
ii.Mileage claims
iii.Gratuity payments or payments for dismissal or retrenchments
iv.Annual bonus

2) Contributions

Coverage of the Workers Social Security Act1969

Employers are required to pay monthly contributions for each eligible employee according to the rate specified under the Employees’ Social Security Act, 1969. These contributions are divided into two (2) types, namely:

First Category

Second Category

For employees who are less than 60 years of age, contributions payable by employers and employees are for the Employment Injury Scheme and the Invalidity Scheme.

All employees who have reached the age of 60 must be covered under this category for the Employment Injury Scheme only.

The rate of contribution under this category comprises 1.75% of employer’s share and 0.5% of employees’ monthly wages according to the contribution schedule.

The rate of contribution under this category is 1.25% of employees’ monthly wages, payable by the employer, based on the contribution schedule. 

Note: All employees who have not reached the age of 60, must contribute under the First Category except for those who have attained 55 years of age and have no prior contributions before they reach 55 due to non-eligibility under the Employees’ Social Security Act, 1969.

Note: For eligible new employees who are 55 years of age, they must be covered under the Second Category.

3) Payment of Contribution

On 1 January 2018, SOCSO introduced PERKESO ASSIST Portal to facilitate employers to manage their registration, update records and contribution payments.

To use PERKESO ASSIST Portal, employers need to register to obtain the ID for the ASSIST Portal by filling in the form for PERKESO ASSIST Portal ID. PERKESO ASSIST Portal can be accessed by visiting www.perkeso.gov.my and login to ASSIST Portal.

a) Internet Banking

Employers need to be registered and have an account with the appointed banks. Further details can be obtained by contacting the following banks:

No

BANK

PERKHIDMATAN

1

CIMB Bank Berhad

BizChannel

2

Maybank Berhad

Maybank2e.net

3

Public Bank Berhad

PbeBank.com

4

RHB Bank Berhad

RHB Reflex

5

Citibank Berhad

CitiConnect

6

Hong Leong Bank Berhad

ConnectFirst/Connect Biz

7

AmBank Malaysia Berhad

E-Ambiz

8

Alliance Bank Malaysia Berhad

BizSmart

9

Affin Bank

affinonline

10

HSBC Bank (M) Berhad

HSBCnet

11

Bank Islam Malaysia Berhad

e-Banker

12

Agro Bank

AGRONet

13

UOB Bank

UOB Business Internet Banking

14

Bank Muamalat Malaysia Berhad

Corporate Internet Banking (i-Biz)

15

Standard Chartered Malaysia

Straight2Bank

16

OCBC Bank (M) Berhad

Velocity@ocbc

17

Bank Rakyat

 

b) Bank counters (using ACR reference with contribution data submitted through PERKESO ASSIST Portal). 

c) Banks appointed by SOCSO as collection agents for contribution payments are as follows:

i. Maybank Berhad
ii.RHB Bank Berhad
iii.Public Bank Berhad (starting 1 March 2018)

d) Counters at SOCSO offices (using ACR reference with contribution data submitted through PERKESO ASSIST Portal).

Payment of contributions must be made using cheque or money/postal order only.

Contribution Payment Period

Contributions payable for any month must be paid not later than the 15th day of each succeeding month (eg: contributions for July 2019 must be paid latest by 15 August 2019).

Interest on Late Payment of Contributions

Interest on late payment of contributions will be imposed at a rate of 6% per annum for each day of contributions not paid within the stipulated period.

4) Rate of Contribution

Refer to table of rate of contribution HERE.

*Monthly contribution is subject to the ceiling of the insured wage of RM4,000.00 per month.

5) Enforcement

Inspections

The rationale behind enforcement and inspections are to ensure that employers adhere to the Employees’ Social Security Act 1969 and Employees’ Social Security (General) Regulations 1971. An Inspector appointed under Section 12 of Employees’ Social Security Act 1969, shall exercise his powers, perform his functions and discharge his duties in compliance under this Act. All inspection activities will be carried out to registered employers with SOCSO in Malaysia.

Compound

Compound are provided for under Section 95A, Employees’ Social Security Act 1969, where a Director General or any empowered officer by the Director General may impose compounds to anyone who has committed offences under Regulation 2 of the Employees’ Social Security (Compounding of Offences) Regulations 2006.

The Employees’ Social Security (Compounding of Offences) Regulations 2006 has been gazetted with effective from 1 March 2006.

Types of Offences That Can Lead to Compound

 

Legal 
Provision

Type of Offence

Offence Criteria

Compound Amount

1Section 4Late in registering of industryPeriod;
Exceeds 30 days but less than 1 yearRM500
Exceeds 1 year but less than 2 yearsRM1500
Exceeds 2 years but less than 5 yearsRM2000
Exceeds 5 yearsRM4000
2Section 5Late in registration of employeesPeriod;
Exceeds 30 days but less than 1 yearRM500
Exceeds 1 year but less than 2 yearsRM1500
Exceeds 2 years but less than 5 yearsRM2000
Exceeds 5 yearsRM4000
 3Regulation 34(1) and (2)Failure to present or no Employee RegisterFailure to present or maintain an Employee Register:
Within 7 years after the first inspectionRM300
Within 7 years after the second inspection and so forthRM600
4Regulation 71(1) and (2)Late in informing of an accident beyond the allowable timeFatality
Period :
more than 2 months but less than 1 yearRM1000
Exceeds a year RM1500
Injury due to work accidents at workplace:
Period :
more than 2 months but less than 1 year RM1000
Period : exceeds a yearRM1500
Injury due to commuting accidents:
 Period :
 More than 3 months but less than 1 yearRM1000
 Exceeds a yearRM1500
5Regulation 44AFailure to present rate of contributionUnable to provide SOCSO Contribution Schedule for employees : 
Within 7 years after the first inspectionRM300
Within 7 years after the second inspection and so forthRM600

Employment Insurance System (EIS)

The Employment Insurance System Act 2017 was introduced and came into force on 1 January 2018.
EIS aims to provide Employment Insurance, Public Employment Services, and Labor Market Information (LMI) to the Malaysian workforce.

1) COVERAGE

All employers in the private sector are required to pay monthly contributions on behalf of each employee. (Government employees, domestic workers and the self-employed are exempt)

An employee is defined as a person who is employed for wages under a contract of service or apprenticeship with an employer. The contract of service or apprenticeship may be expressed or implied and may be oral or in writing.

All employees aged 18 to 60 are required to contribute. However, employees aged 57 and above who have no prior contributions before the age of 57 are exempt.

Contribution rates are capped at insured salary of RM4000.00.

2) Contribution Rates

The contribution rate for Employment Insurance System (EIS) is 0.2% for the employer and 0.2% for employee based on the employee’s monthly salary.

§  The Contribution rate is based on Section 18 and Schedule 2 of the Employment Insurance System Act 2017.

3) Contribution Payment Procedure

To pay EIS contribution please to obtain your portal ID). Please update your details and generate an ECR for the purpose of paying EIS contributions. Contribution payment methods:

a) Financial Process Exchange (FPX)
b) Electronic Funds Transfer (EFT)
c) Cheque, money order or postal order
d) Bank counters i.e. Maybank, RHB Bank, Public Bank Berhad