Social Security and Welfare Benefits in Malaysia

Information on the Malaysian social security system - how to contribute and what benefits to expect...

The Malaysian Social Security system is called SOCSO, or PERKESO (Pertubuhan Keselamatan Sosial). It provides financial assistance to employees and their families in the event of an accident which results in death, disability or illness, or an occupational disease. SOCSO provides two kinds of insurance:

  1. Employment injury insurance
  2. Invalidity pension scheme

Only Malaysian citizens and permanent residents are eligible to contribute to SOCSO and to benefit from its services.

The following individuals are exempt from paying SOCSO:

  • Business owners and their spouses
  • Domestic servants
  • Foreign workers
  • Government employees
  • Self-employed people

SOCSO is funded by contributions from both the employer and the employee. The amount paid into the scheme depends on an employee's earnings. It is the employer's responsibility to ensure that their employees are registered with SOCSO; a new employee must be registered within 30 days of starting work. Coverage under the SOSCO system is optional for employees earning more than RM 3,000 per month.

  • For more information about SOCSO from the Malaysian government: Click here
  • For information about registration and contributions: Click here

Foreign workers

Although foreign workers are not covered by SOSCO, under the 1952 Workers' Compensation Act they are eligible for employment injury compensation. This is funded by the employer, who makes a fixed annual contribution to the scheme. It is illegal for an employer to deduct this payment from an employee's salary.

  • For more information about Workers' Compensation: Click here

Contributions to these social security schemes can only be made up to the age of 55, after which an individual must use other means of funding.

Foreign Workers Hospitalisation and Social Insurance Scheme

In 2011 the Malaysian Government introduced the compulsory Foreign Workers Hospitalisation and Social Insurance Scheme (SKHPPA). Employers must pay SKHPPA for full-time foreign employees who are aged between 18 and 59. The insured person receives a fixed amount of healthcare cover each year, which can be used in government hospitals only.

Employees Provident Fund

In Malaysia pensions are covered by the Employees Provident Fund (EPF), or Kumpulan Wang Simpanan Pekerja. As well as providing a pension, contributors can withdraw money for certain reasons; for example, to cover medical expenses or to purchase a home.

The EPF is essentially a savings fund with contributions made by employees and their employers; the amount paid in is proportional to an employee's salary. All employees, with the exception of domestic workers and the self-employed, are required by law to make payments to the EPF.

Foreign workers do not have to join the EPF scheme but can choose to do so. Payments are made by employees up to the age of 75.

  • For information about how to sign up for the EPF scheme and to download forms: Click here