Kuching is a large city in East Malaysia and is currently the state capital of Sarawak. Currently Kuching is known for being the most populated city in Sarawak. It is currently a tourist hotspot and a food destination. Thus, this makes it a perfect city for you to set up your business as you will enjoy an ever- changing, yet constant customer base.
As an employer in Malaysia, you are probably familiar with the term “PERKESO”. PERKESO, which is short for Pertubuhan Keselamatan Sosial, or SOCSO (Social Security Organization) translated to English, is a social security program organised by the Ministry of Labour in 1971 as a means to make sure all employees in Malaysia are given social security. This program is run as a fund and is contributed towards by both the employer as well as the employee. The employer has to register all employees towards it. The fund is calculated on a monthly basis and are based on the following:
- The employee’s base salary
- Overtime bonuses
- All paid leave
- All allowances
- Any service charges they are entitled to
It is to be noted that PERKESO only applies to your employees who are below the age of 60. In which case the rate of contribution is 1.75% of the employee’s total salary.
In addition, the employees themselves are also liable to contributing 0.5% of their salary towards the fund.
Below is a small table as an example to illustrate how PERKESO is calculated:
|Total Monthly Wages||Employer Contribution (RM)||Employee Contribution (RM)||Total Contribution (RM)|
|Wage below RM 30||0.40||0.10||0.50|
|Wages between RM 30 and RM 50||0.70||0.20||0.90|
|Wages between RM 50 and RM 70||1.10||0.30||1.40|
|Wages between RM 70 and RM 100||1.50||0.40||1.90|
|Wages between RM 100 and RM 140||2.10||0.60||2.70|
|Wages between RM 140 and RM 200||2.95||0.85||3.80|
|Wages between RM 200 and RM 300||4.35||1.25||5.60|
|Wages between RM 300 and RM 400||6.15||1.75||7.90|
|Wages between RM 400 and RM 500||7.85||2.25||10.10|
|Wages between RM 500 and RM 600||9.65||2.75||12.40|
To formally make an application, you will be required to fill in the following forms:
- Employer’s registration form (Form 1)
- Employee’s registration form (Form 2)
Along with the submission of form 1, you will also need to submit two copies of the following, as applicable:
- Forms 9 & 49 (Limited Liability company)
- Forms A & D (Sole proprietor/partnership company)
Then you may proceed to make the payments needed and the successful applicant will be issued an Employer’s Code Number.
As you are located in Kuching, the closest PERKESO office to you is the following:
35, Jalan Padungan,
To conclude, PERKESO is a program the Ministry of Human Rights runs to ensure that social security protection is given to all employees. It is funded by the employer and is mandatory. If you’re having any doubts with the application process, don’t worry. Just contact us at S&F Consulting. As registered agents in Malaysia, we can work on your behalf. In the meantime, if you have any doubts, feel free to direct them to our friendly customer service support staff.
Frequently Asked Questions
Is it compulsory to register for SOCSO?
Yes, it is required by the law.
What will happen if I don’t register for SOCSO?
Employers who fail to register for SOCSO are subject to the following punishment:
A fine of RM 10000 OR
Imprisonment of up to two years
What happens if an employee no longer works for me?
If you have dismissed an employee or your employee has resigned, the employer has to clarify with the SOCSO office, in order to remove the employee from the fund list