[Guide] SOCSO contribution for Category 2

04 September, 2019
By G-Team in Payroll
Gpayroll - socso category 2
How much do you know about SOCSO contribution in Malaysia payroll? There are two types of contribution categories and in this guide, we will show you how to update the correct category on our online payroll software. SOCSO contributions are divided into two (2) types, namely:

Contributions of the First Category
This is applicable for employees who are less than 60 years of age. Contributions are payable by employers and employees for the Employment Injury Scheme and the Invalidity Scheme.

The rate of contribution under this category is 1.75% of employer’s share and 0.5% of employees’ monthly wages according to the contribution schedule.

All employees who have not reached the age of 60, must contribute under the First Category except for those who have attained 55 years of age and have no prior contributions before they reach 55 due to non-eligibility under the Employees’ Social Security Act, 1969.

Contributions of the Second Category
The rate of contribution under this category is 1.25% of employees’ monthly wages, payable by the employer, based on the contribution schedule. All employees who have reached the age of 60 must be covered under this category for the Employment Injury Scheme only. There will be no contribution from the employee.
 
Eligible new employees who are 55 years of age, they must be covered under the Second Category.

To update the category in our payroll software, go to the employee's "Statutory Details", click on 'Edit" to update the contribution category.
socso












Some customers will ask: "What happens when existing employees reach 60 years of age?" To make it easy, our payroll software will automatically stop employee contribution from the month employee reaches 60 years. The HR user just need to update the category under the employee's profile as show above to ensure proper recording.

If you have large volume of new hires every month, our bulk upload template also allow you to update the SOCSO contribution category. Below is an example on how you can update in our bulk upload template.
socso2





That's it for now. If you need any assistance, you can reach us through live chat here or email to This email address is being protected from spambots. You need JavaScript enabled to view it.. Not yet a Gpayroll client? Contact us and speak to our consultant to learn more on our payroll software with all the time-saving tools you need to grow your business.