Social Security Organization (SOCSO) was established in 1971 under the Ministry of Human Resources to provide social security protections to all employees/workers in Malaysia. It is mandatory for employer and Malaysian employee to contribute to SOCSO. As for expatriates (non-Malaysian), only employer needs to contribute to SOCSO.
Malaysian employees are required to contribute to EPF. It is optional for expatriates to contribute to EPF. EPF is a statutory saving scheme to provide employees for their retirement fund in Malaysia.
All employers and employees are required to make monthly contributions to the EPF. Employers pay a rate of 12% if the employee’ monthly wages are above MYR5,000 per month or 13% if the employees’ monthly wages are below MYR5,000 per month. Employees contribute at a rate of 11% per month. Employees’ contributions are deducted at source.
Self-employed individuals may elect to contribute to the EPF. The individuals may make voluntary contributions at a fixed monthly rate of any amount from MYR 50 to MYR5,000.
The contributions may be withdrawn by an employee upon reaching 55 years of age or at an earlier time if the employee permanently leaves Malaysia with no intention of returning. Contributions may also be withdrawn on the death of an employee or if he/she is physically or mentally disabled and is prevented from future employment. Employees may make partial withdrawals to purchase a house, or to finance education, for medical treatment, or when they reach the age of 55.