New SOCSO and EIS Contribution Tables Effective October 1, 2024

New SOCSO and EIS Contribution Tables Effective October 1, 2024

Effective October 1, 2024, employers in Malaysia must adhere to updated contribution tables for the Social Security Organisation (SOCSO) and Employment Insurance System (EIS). This update raises the wage ceiling for contributions from RM5,000 to RM6,000 per month. Employees earning more than RM5,000 will now have their contributions capped at the new ceiling of RM6,000.

This change is aimed at enhancing the social security protection provided to employees and ensuring that contributions reflect the current wage environment. Below, we break down the key changes and how they will impact both employers and employees.

New SOCSO Contribution Table (Effective October 1, 2024)

Under the updated SOCSO contribution table, both employees and employers will contribute a percentage of the employee’s monthly wages, up to a maximum wage ceiling of RM6,000.

Wages (RM)	Employee Contribution (RM)	Employer Contribution (RM)	Total Contribution (RM)
5,100	25.25	88.35	113.60
5,200	25.75	90.15	115.90
5,300	26.25	91.85	118.10
5,400	26.75	93.65	120.40
5,500	27.25	95.35	122.60
5,600	27.75	97.15	124.90
5,700	28.25	98.85	127.10
5,800	28.75	100.65	129.40
5,900	29.25	102.35	131.60
6,000	29.75	104.15	133.90
Exceeds 6,000	29.75	104.15	133.90

New EIS Contribution Table (Effective October 1, 2024)

Similarly, EIS contributions have been adjusted, with contributions for employees earning more than RM6,000 being capped at the new ceiling.

Wages (RM)	Employee Contribution (RM)	Employer Contribution (RM)	Total Contribution (RM)
5,100	10.10	10.10	20.20
5,200	10.30	10.30	20.60
5,300	10.50	10.50	21.00
5,400	10.70	10.70	21.40
5,500	10.90	10.90	21.80
5,600	11.10	11.10	22.20
5,700	11.30	11.30	22.60
5,800	11.50	11.50	23.00
5,900	11.70	11.70	23.40
6,000	11.90	11.90	23.80
Exceeds 6,000	11.90	11.90	23.80

What Has Changed?

The key changes are as follows:

1. Increased Wage Ceiling: The wage ceiling for SOCSO and EIS contributions has been increased from RM5,000 to RM6,000. This means that employees earning from RM5,000 to RM6,000 will contribute based on this new ceiling, and those earning above RM6,000 will have their contributions capped at RM6,000.
   
   
2. Incremental Increases: For employees earning between RM5,000 and RM6,000, both SOCSO and EIS contributions will progressively increase based on their wages. For employees earning more than RM6,000, the contributions will now be capped at the new wage ceiling.

Impact on Employers and Employees

For Employers:

• Higher Contributions: Employers will experience a slight increase in the contributions they need to make for employees earning more than RM5,000. For example, for an employee earning RM6,000, the employer’s SOCSO contribution will increase from RM86.65 to RM104.15.
  
  
• Payroll Adjustments: Employers must update their payroll systems to reflect the new contribution tables to avoid any compliance issues.
  
  
• Budgeting: Companies may see a small increase in payroll costs, particularly if they have many employees earning in the RM5,000 to RM6,000 range.

For Employees:

• Slightly Reduced Take-Home Pay: Employees earning between RM5,000 and RM6,000 will see a slight reduction in their take-home pay due to the higher employee contributions. For example, an employee earning RM6,000 will now contribute RM29.75 towards SOCSO, compared to RM24.75 previously.

How to Prepare for the Update

1. Update Payroll Systems: Employers need to ensure that their payroll systems are updated to reflect the new contribution rates by October 1, 2024.
   
   
2. Notify Employees: Inform employees, particularly those earning more than RM5,000, about the changes in contributions so they are aware of the impact on their take-home pay.
   
   
3. Review Budgets: Employers should review their budget for increased contributions and plan accordingly for the financial impact on payroll expenses.
   
   
4. Compliance: Ensure timely submission of SOCSO and EIS contributions to avoid penalties or non-compliance issues.

Conclusion

The new SOCSO and EIS contribution rates are part of an ongoing effort by the Malaysian government to improve the social security system for workers. While the updates will lead to slightly higher contributions for employees earning more than RM5,000, they also offer enhanced protection and benefits. By preparing in advance and updating payroll systems, employers can ensure a smooth transition to the new rates and remain compliant with the latest regulations.

FAQ

1. When does the new wage ceiling from RM5,000 to RM6,000 take effect?
   • The implementation date for the new wage ceiling from RM5,000 to RM6,000 is October 1, 2024.
     
     
2. Does the new wage ceiling apply to both foreign and local employees?
   • Yes. However, foreign employees are not covered under the Employment Insurance System Act 2017 (Act 800).
     
     
3. Will the increase in the wage ceiling from RM5,000 to RM6,000 also increase the benefits?
   • Yes. The benefits will increase in line with the wage ceiling increase.
     
     
4. How can employers obtain information on the new contribution rates?
   • Employers can get the new contribution rates by visiting PERKESO’s official website at www.perkeso.gov.my.
     
     
5. How can employers obtain information about the employer circular?
   • Employers can obtain the employer circular about the increase in the wage ceiling from RM5,000 to RM6,000 by visiting the PERKESO website at www.perkeso.gov.my.
     
     
6. What is the transition period for employers to comply with the new contribution rates?
   • o The transition period for employers to comply with the new contribution rates is six (6) months from October 1, 2024, to March 31, 2025.
     
     
7. Will employers be penalized (FCLB) during the transition period?
   • No.
     
     
8. Are employers required to comply with the new wage ceiling?
   • Yes, it is mandatory by law.
     
     
9. Do all eligible public sector employees follow the new wage ceiling?
   • Yes, for public sector employees who are on a contract or temporary basis under Act 4. However, public sector employees are not covered under Act 800.
     
     
10. What is the contribution rate for wages exceeding RM5,900 but not more than RM6,000 under the new amendments?
    • The contribution rate for these wages is RM133.90.
      
      
11. What is the contribution rate for wages exceeding RM6,000?
    • The contribution rate for wages exceeding RM6,000 is RM133.90 for the first type and RM74.40 for the second type under Act 4. Meanwhile, under Act 800, the contribution is RM23.80.
      
      
12. How can contribution payments be made?
    • Employers can make contribution payments using the following methods:
      • (i) Payment via the Online Portal (FPX)
      • (ii) Internet banking
      • (iii) Direct Debit Authorization (DDA)
      • (iv) Bank counters appointed as collection agents, such as Maybank Berhad, Public Bank Berhad, and RHB Bank Berhad.
        
        
13. What are the contribution rates (2024 Amendment) that employers and employees under Act 4 and Act 800 must pay?
    • The contribution rates to be paid are as stipulated in the Third Schedule, Act 4, and the Second Schedule, Act 800, which can be referred to at https://www.perkeso.gov.my/en/our-services/employer-employee/kadar-caruman.html

For further inquiries, please contact PERKESO Careline at 1-300-22-8000 or visit the official PERKESO website at www.perkeso.gov.my or email perkeso@perkeso.gov.my.