SOCSO for Foreign Workers in Malaysia: What Employers Need to Know (2025)
Hiring foreign workers is a common and often essential practice for businesses across Malaysia. With this comes a set of specific legal responsibilities, and one of the most critical is the mandatory contribution to the Social Security Organisation (SOCSO), also known as PERKESO.
Many employers still have questions about this rule: Is it compulsory for all foreign staff, including domestic helpers? What benefits do they receive? How have the rules changed recently?
This guide will provide clear and up-to-date answers. We will cover the mandatory SOCSO coverage for all foreign workers, explain what the schemes include, and outline your specific obligations as an employer to ensure you remain fully compliant with the latest 2025 regulations.
The Mandatory Requirement: Is SOCSO Compulsory for Foreign Workers?
Yes, absolutely. It is a legal requirement for all employers in Malaysia to register and contribute to SOCSO for their foreign workers. This has been progressively enforced and now includes almost every category of foreign employee.
This mandate replaced the former Foreign Worker Compensation Scheme (FWCS). All new employment injury claims for foreign workers now fall under SOCSO, providing them with the same social security protection as Malaysian workers in the event of a workplace accident.
Who is Covered? A Comprehensive Scope
Under the regulation, a “foreign worker” is any individual who is not a Malaysian citizen and holds a valid pass or permit to work legally in Malaysia.
A significant recent change is the inclusion of Domestic Servants. Effective since 1 June 2021, it is also mandatory for employers to register and contribute to SOCSO for their domestic workers (often called maids or domestic helpers). The previous exemption for this group has been removed.
What Are Foreign Workers Covered For? (Updated for 2025)
This is the most critical update for all employers. Previously, foreign workers were only covered for work-related accidents. As of 1 July 2024, this has changed.
Foreign workers are now covered under both of SOCSO’s main pillars:
- The Employment Injury Scheme
- The Invalidity Scheme
This brings their social security protection in line with that of Malaysian employees.
Benefits They Can Now Receive
- From the Employment Injury Scheme: If they have a work-related accident, they are entitled to Medical Benefits, Temporary and Permanent Disablement Benefits, and Dependants’ Benefit in case of death.
- From the Invalidity Scheme: They are now eligible for the Invalidity Pension if they suffer a permanent, non-work-related disability that prevents them from working, provided they meet the contribution requirements. Their family may also be eligible for Survivors’ Pension.
The Employer’s Responsibilities: A Checklist (Updated Contribution Rates)
As an employer, you are fully responsible for ensuring compliance. Here are your key duties:
1. Registration
You must register each foreign worker with SOCSO within 30 days of their employment start date. This includes registering domestic workers. The process can be done at a PERKESO office or through the online ASSIST portal.
2. Contribution Calculation and Payment
With the inclusion of the Invalidity Scheme, the contribution rates have changed. The total contribution is now 2.25% of the worker’s monthly wages, split as follows:
- Employer’s Share: 1.75% (1.25% for Employment Injury + 0.5% for Invalidity).
- Employee’s Share: 0.5% (deducted from the foreign worker’s salary for the Invalidity Scheme).
3. Accident Reporting
You have a legal duty to report any workplace accident involving a foreign worker to SOCSO immediately using the appropriate forms. Failure to do so is an offence.
How Worksy HRMS Simplifies Foreign Worker Management
Managing a mixed workforce with different contribution start dates and rates can be complex. A modern HRMS is essential for maintaining compliance.
Automated and Accurate Payroll Contributions
A key challenge is applying the correct statutory rates. Worksy’s payroll software is updated with the latest regulations. Customize payroll policies and settings to automatically apply the correct employer (1.75%) and employee (0.5%) SOCSO contributions for foreign workers, eliminating manual errors and ensuring you are always compliant.
Centralized Employee Profiles
Compliance for foreign workers goes beyond payroll. An HRMS like Worksy provides a single, secure profile for each foreign worker. This allows HR to track not just salary data, but also crucial compliance information like passport numbers and visa expiry dates, helping you stay on top of all legal obligations in one place.
Conclusion: Compliance is Key
To summarize, here are the three non-negotiable points every employer must remember for 2025:
- SOCSO is mandatory for all foreign workers, including domestic workers.
- Coverage now includes both the Employment Injury Scheme and the Invalidity Scheme.
- The total contribution is 2.25%, split between the employer (1.75%) and the employee (0.5%).
Fulfilling your SOCSO obligations is a fundamental part of being a responsible and law-abiding employer in Malaysia. It ensures your workers are protected and your business operates without legal risk.
Frequently Asked Questions (FAQ)
What about the old Foreign Worker Compensation Scheme (FWCS)?
The FWCS no longer applies to foreign workers. It has been fully replaced by the SOCSO scheme. Employers must ensure all foreign workers are registered with SOCSO.
What happens to SOCSO coverage if a foreign worker’s permit expires?
SOCSO coverage is tied to legal employment. If a worker’s permit expires and is not renewed, they are no longer legally employed, and SOCSO contributions should cease.
Can a foreign worker get a refund of SOCSO contributions when they return home?
No. The contributions made are for insurance protection during the period of employment in Malaysia. They are not a savings fund and cannot be refunded.
What are the penalties for employers who fail to register their foreign workers?
Employers who fail to register or contribute to SOCSO for their foreign workers, including domestic workers, can face significant penalties, including fines up to RM10,000, imprisonment, and interest on late contributions.