As of 1st October 2024, PERKESO has introduced a new salary ceiling for contributions to Social Security Organisation (SOCSO) and Employment Insurance System (EIS) from RM 5,000 to RM6,000 per month.
These changes aim to reflect the evolving workforce and ensure contributions are fair and aligned with current wage levels. For businesses and employees alike, it’s crucial to understand how these updates will affect payroll, contributions, and overall compliance.
Revised SOCSO Contribution Table (For Wages RM5,100 to RM6,000)
Revised EIS Contribution Table (For Wages RM5,100 to RM6,000)
So, How does this affect Employers and Employees?
With the new contribution tables in place, employers and employees will experience a few adjustments in their payroll and contributions.
For Employers:
Higher Contributions: Employers will see a slight increase in the contributions they need to make for employees earning more than RM5,000. For instance, a company employing individuals with salaries around RM6,000 will contribute RM104.15 to SOCSO, up from RM86.65.
Payroll Adjustments: It’s important to ensure that payroll systems are updated to reflect the new contribution rates.
Budgeting Considerations: For businesses with multiple employees in the RM5,000 to RM6,000 salary range, there may be a slight increase in overall payroll costs.
For Employees:
Slightly Reduced Take-Home Pay: Employees earning between RM5,000 and RM6,000 will notice a small decrease in their take-home pay due to the higher SOCSO contributions. For example, an employee earning RM6,000 will contribute RM29.75 to SOCSO, up from RM24.75.
FAQs
1. 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).
2. Will the increase in the wage ceiling from RM5,000 to RM6,000 result in a higher benefit rate?
Yes. The benefit rate will increase in line with the new wage ceiling.
3. How can employers obtain information about the new contribution rates?
Employers can obtain information about the new contribution rates by visiting PERKESO’s website at www.perkeso.gov.my.
4. What is the transition period for employers to comply with the new contribution rates?
The transition period for employers to comply with the new contribution rates is six (6) months, from 01 October 2024 to 31 March 2025.
5. Will employers be penalized during the transition period?
No.
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.
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