Which payments are subject to SOCSO contribution and which are exempted?

Payments Subject to SOCSO Contribution

"Wages" for contribution purposes refers to all remuneration payable in money by an employer to an employee.

This includes:

  • Basic Salaries
  • Overtime payments
  • Commissions
  • Payments in respect of leave
  • Service charges

Payments Exempted From SOCSO Contribution

The payments below are not considered “wages” and are not included in the calculations for monthly deductions:

  • Any contribution payable by the employer towards any pension or provident fund
  • Any travelling allowance
  • Any gratuity payable on discharge or retirement of the employee
  • Any sum paid to cover expenses incurred by the employee in the course of his duties
  • Annual bonus
  • Gifts - eg, cash payments for holidays like Hari Raya, Christmas

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