SOCSO Employment Injury Scheme

The SOCSO Employment Injury Scheme is a mandatory social security scheme in Malaysia that compensates employees for accidents, disabilities, occupational diseases, and deaths arising out of and in the course of employment. It is administered by the Social Security Organisation (PERKESO/SOCSO) under the Employees’ Social Security Act 1969 (Act 4).

It is one of two core schemes under Act 4, alongside the Invalidity Scheme, which covers loss of earning capacity from conditions unrelated to work. Where the Invalidity Scheme responds to non-occupational invalidity, the Employment Injury Scheme responds specifically to work-related harm – including injuries sustained while commuting or travelling on employer business.

For employers, the scheme is a statutory payroll obligation: registration, monthly contributions, and accident reporting are all legal requirements, not optional benefits.

Who is covered

Coverage under the Employment Injury Scheme extends to:

• All Malaysian citizens and permanent residents employed under a contract of service or apprenticeship in the private sector, regardless of salary level
• Foreign workers holding valid work passes (mandatory since January 2019)
• Employees aged 60 and above who are still working, and employees who first registered with PERKESO after age 55 – these fall under Second Category contributions, which cover employment injury only

The scheme also operates on a “once covered, always covered” principle: an employee who has been registered remains protected even if their wages later rise above the contribution ceiling.

What qualifies as an employment injury

PERKESO recognises several categories of covered incident:

• Industrial accident – an accident at the workplace while performing work duties.
• Commuting accident – an accident on the direct route between the employee’s residence and place of work, without a substantial personal deviation.
• Accident during a work journey – an accident while travelling on employer business or on a work-related errand.
• Accident during a rest interval – an accident on the employer’s premises during an authorised break.
• Occupational disease – a disease contracted through the nature of the employee’s work, as listed in the Fifth Schedule of Act 4.

Personal detours, unauthorised deviations, and injuries unconnected to work generally fall outside the scheme.

Benefits provided

• Medical Benefit – free treatment at PERKESO panel clinics or government hospitals until recovery, with reimbursement possible for treatment obtained at non-panel clinics.
• Temporary Disablement Benefit – 80% of the employee’s average assumed daily wage while certified unfit for work, where the medical leave runs for at least four days including the day of the accident. The rate is subject to a minimum of RM30.00 per day and a maximum of RM158.67 per day. It is not payable for days on which the employee works and earns wages.
• Permanent Disablement Benefit – 90% of the average assumed daily wage, subject to a minimum of RM30.00 per day and a maximum of RM178.50 per day. Claims are assessed by a Medical Board. Assessments of 20% or less are paid as a lump sum; above 20%, the employee may commute one-fifth of the daily rate into a lump sum, with the balance paid monthly for life.
• Constant-Attendance Allowance – a fixed RM500 per month for employees with total permanent disablement who are so severely incapacitated as to require constant personal care, as certified by a Medical Board.
• Dependants’ Benefit – 90% of the average assumed daily wage, paid to eligible dependants where death results from an employment injury.
• Funeral Benefit – the actual amount incurred or RM2,000, whichever is lower.
• Rehabilitation Benefit – physical and vocational rehabilitation, prosthetics and appliances, and support under the Return to Work (RTW) programme.
• Education Benefit – loans and financial assistance for the dependent children of insured persons.

Note: daily rate caps are tied to the prevailing wage ceiling. Older published figures such as RM105.33 and RM118.50 reflect the superseded RM4,000 ceiling and should not be used for current calculations.

Contributions

Contributions are calculated on monthly wages using PERKESO’s banded contribution table, subject to a wage ceiling of RM6,000 per month, raised from RM5,000 effective 1 October 2024. Wages above the ceiling are contributed on at the ceiling amount.

Under First Category contributions, which cover both the Employment Injury Scheme and the Invalidity Scheme, the employer pays approximately 1.75% of wages and the employee 0.5%. The employment injury portion – around 1.25% of wages – is borne entirely by the employer. Under Second Category contributions, which cover the Employment Injury Scheme only, the contribution is employer-funded, and applies to employees aged 60 and above as well as those who first registered after age 55.

Because PERKESO publishes fixed ringgit amounts per wage band rather than applying a flat percentage, contributions must be read from the official table rather than calculated as a straight percentage.

Related development: from 1 June 2026, PERKESO introduced the Non-Employment Injury Scheme (Skim Kemalangan Bukan Bencana Kerja, marketed as LINDUNG 24 Jam), covering accidents outside working hours that are unrelated to employment. It is a separate scheme, funded by employees and phased in over time, and does not replace or alter Employment Injury Scheme coverage.

Employer obligations

• Register the business and each new employee with PERKESO, generally within 30 days of the employment start date.
• Deduct and remit contributions monthly, by the 15th of the following month, via the ASSIST Portal.
• Report accidents to PERKESO promptly – the accident report (Form 21) is expected within 48 hours of a reportable incident – and maintain an accident register.
• Support claims, submitting the relevant claim forms and supporting documentation. Employment injury claims are generally subject to a 12-month claim window.
• Keep records of wages, contributions, and incidents available for inspection.

Late payment attracts interest and penalties, and failure to register or contribute can expose the employer to prosecution and to liability for benefits the employee would otherwise have received.

Why it matters for payroll

The Employment Injury Scheme is one of several statutory contributions that must be calculated correctly every cycle in Malaysia, alongside EPF, EIS (Employment Insurance System), PCB, and the HRD Corp levy. Errors cluster in three places: applying the wrong contribution category for older workers, using a stale wage ceiling, and misclassifying foreign workers.

Mercans provides managed payroll, EOR, and global payroll technology across Malaysia and more than 160 countries, handling PERKESO registration, contribution table application, ASSIST Portal filings, and statutory reporting as part of an in-country compliant payroll run – so employers stay current as ceilings, rates, and schemes change.

Frequently asked questions

Is the Employment Injury Scheme the same as EIS?

No, though the abbreviations are easy to confuse. The Employment Injury Scheme (Skim Bencana Pekerjaan) sits under the Employees’ Social Security Act 1969 and covers work-related injury, occupational disease, and death. “EIS” in Malaysian payroll usually refers to the Employment Insurance System (Sistem Insurans Pekerjaan) under the Employment Insurance System Act 2017, which provides temporary financial assistance and re-employment support to workers who lose their jobs. They are separate schemes with separate contribution lines.

Are commuting accidents covered?

Yes. An accident on the direct journey between an employee’s home and workplace is treated as an employment injury, as are accidents on journeys undertaken for work purposes. Coverage can be denied where the employee made a substantial personal deviation from the route, so route and purpose are usually the deciding factors in a claim.

Do employees contribute to the Employment Injury Scheme?

No. The employment injury portion of the SOCSO contribution is funded entirely by the employer. The employee’s 0.5% share under First Category contributions goes to the Invalidity Scheme, not the Employment Injury Scheme.

Are foreign workers covered?

Yes. Foreign employees holding valid work passes have been covered under the Employment Injury Scheme since January 2019, and were brought into the Invalidity Scheme from July 2024. Employers must register them with PERKESO in the same way as local staff, applying the correct contribution category.

What happens if an employer never registered the employee?

Non-registration does not remove the employee’s entitlement. PERKESO can still assess and pay benefits, then recover the cost from the employer, and the employer remains liable for arrears of contributions, interest, and penalties, with prosecution possible under Act 4. Registering on time is materially cheaper than remediating after an incident.

Does the scheme cover employees working from home?

Generally yes, where the injury occurs while the employee is performing work duties under the employer’s direction. Because the line between work and personal activity is harder to evidence at home, prompt internal incident reporting and clear documentation of the work-related nature of the injury are important to a successful claim.