SOCSO 2026 Update: Why Are Employees Taking Home Less Salary?
- CR Consultancy
- Jun 24
- 3 min read
Updated: 7 days ago
Why are my employees suddenly getting lower salaries? Did SOCSO increase?
This is one of the most common questions SME business owners are asking right now. The short answer is: The existing SOCSO schemes are not being replaced; instead, an additional employee-funded contribution has been introduced under Lindung 24 Jam starting June 2026, and it is affecting employers and employees covered under the Employees’ Social Security Act 1969 in Malaysia. Many businesses are only realising this change after employees start raising questions. If you are unsure what has changed, this guide explains everything in simple terms.
What Has Changed in SOCSO in 2026?
Starting 1 June 2026, the government introduced a major update under SOCSO (PERKESO) called the“Lindung 24 Jam” scheme, which means 24-hour protection.
Previously, SOCSO protection was mainly limited to:
Workplace accidents
Injuries during work-related travel
Occupational diseases
Now, the coverage has been expanded. Employees are covered for eligible non-work-related accidents occurring in Malaysia, including outside working hours. In simple terms, this means SOCSO is no longer just “work insurance” it now covers daily-life accident risks.
Why Employees Are Seeing Lower Take-Home Pay
The biggest concern from employees is the drop in their net salary.
This is due to a new SOCSO contribution introduced together with the new scheme:
0.75% deduction from employee salary (starting 2026–2027)
Calculated based on salary up to RM6,000
Fully paid by employees This is not a replacement of existing SOCSO it is an additional layer of protection, which is why employees are seeing an extra deduction on their payslip.
Over time, this contribution will gradually increase to 1.25% in the future phases.
What Employees Actually Get From This Change
While the additional deduction can feel like a burden, the protection offered is significantly wider than before.
Employees are now covered for accidents that happen outside of work, including: | The scheme provides support such as: |
|
(Subject to PERKESO’s eligibility assessment and applicable scheme conditions.) |
*This makes SOCSO more like a safety net that protects employees throughout their daily life, not just during working hours.
Why This Matters for SME Business Owners
Even though this new contribution is paid by employees, it still affects how businesses operate.
First, payroll calculations are no longer as straightforward as before. There is now an additional SOCSO component that must be calculated correctly.
Second, employees will naturally question why their salary appears lower. If employers are not prepared to explain the change, it can create confusion and frustration within the team.
Third, compliance becomes more important. The new scheme is mandatory, and employers are responsible for ensuring that deductions are correctly processed and reported.
The Bigger Shift Behind This Policy
This change reflects a broader shift in how employee protection is structured in Malaysia.
In today’s working environment:
Many employees work flexible hours
Remote and hybrid work are more common
Risks are no longer limited to the workplace
The government recognises that accidents can happen anywhere, not just at work. This update is designed to close that gap and provide more comprehensive protection. In short, SOCSO is moving from a “work-based protection system” to a “daily life protection system.”
If you are unsure whether your payroll setup is correct, or you want to make sure your business is aligned with the latest SOCSO requirements, it is important to get proper guidance. Contact CR Consultancy to ensure your payroll, deductions, and compliance are handled correctly and efficiently.
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