The Social Security Organisation (SOCSO), also known as PERKESO, plays a vital role in protecting Malaysian workers. With the introduction of the new 0.75% SOCSO deduction rate, both employers and employees need to understand how this impacts monthly payroll calculations.
What Is the New 0.75% SOCSO Deduction?
The 0.75% SOCSO deduction refers to the updated contribution rate under PERKESO’s Employment Insurance System (EIS). This rate applies to both the employer and employee, ensuring workers are covered against job loss and workplace injuries.
How to Calculate the Deduction
To calculate the SOCSO deduction for an employee:
Employee Contribution: Gross salary × 0.75%
Employer Contribution: Gross salary × 0.75%
For example, if an employee earns RM3,000 per month:
– Employee deduction: RM3,000 × 0.75% = RM22.50
– Employer contribution: RM3,000 × 0.75% = RM22.50
– Total SOCSO contribution: RM45.00
Why Accurate SOCSO Calculation Matters
Incorrect SOCSO calculations can result in penalties from PERKESO and affect employee benefits. Businesses must ensure payroll systems are updated to reflect the latest contribution rates. Manual calculations are prone to errors — an automated payroll system removes this risk entirely.
Simplify SOCSO Calculations with Smart Payroll Software
Smart Touch Technology’s payroll solution automatically calculates SOCSO contributions based on the latest rates. No more manual spreadsheets or compliance worries — our system handles it all, from contribution tables to statutory submission formats.
Ready to simplify your payroll process? Contact Smart Touch Technology today to learn how our payroll software keeps your business SOCSO-compliant with zero manual effort.
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