(TAX UPDATE) SOCSO Is Changing in June 2026 … Here's What Every Malaysian Employer Needs to Know

(TAX UPDATE) SOCSO Is Changing in June 2026 … Here's What Every Malaysian Employer Needs to Know

Effective Date: June 2026 (targeted) | By KTP

Introduction

If you run a business in Malaysia, SOCSO just became a bigger deal than it used to be.

The Employees' Social Security (Amendment) Act 2026, gazetted on 5 March 2026, introduces the most significant expansion of SOCSO coverage in recent memory.

The big headline: your employees will soon be covered 24 hours a day, 7 days a week, not just when they're on the clock.

Here is what you need to know before the new rules kick in.

What Is Changing?

The Big One: LINDUNG 24/7 (Skim Kemalangan Bukan Bencana Kerja)

Previously, SOCSO's accident protection applied to injuries arising out of and in the course of employment ie meaning workplace accidents, commuting accidents, and occupational diseases. If a worker got hurt on a weekend hike or suffered an injury at home, SOCSO did not cover it.

That limitation is now gone.

Under the new LINDUNG 24/7 scheme, employees are protected against personal injuries caused by accidents outside of working hours … what the Act calls a "non-employment injury." Between 2023 and October 2025 alone, SOCSO rejected 12,306 claims because they fell outside working hours. Under the new scheme, most of those claims would have been paid out.

The scheme's name says it all: Lindung means protection. Your workers are now protected around the clock.

What Does LINDUNG 24/7 Cover?

The scheme covers the same range of benefits that already exist under SOCSO, including:

Medical benefits — treatment costs at SOCSO panel clinics and hospitals

Temporary Disability Benefit (FHUS) — income replacement while unable to work

Permanent Disability Benefit (FHUK) — monthly pension for permanent incapacity

Dependant's Benefit (FOT) — monthly support for spouse and children upon death

Constant Attendance Allowance (ELS) — for employees requiring full-time care

Funeral Management Benefit (FPM) — assistance with funeral costs

Rehabilitation — physical and vocational rehabilitation

Educational loan facility — for dependants of disabled or deceased contributors

What Is NOT Covered Under LINDUNG 24/7?

The non-employment injury protection does not apply in the following situations:

  • Accidents that occur outside Malaysia

  • Cases involving fraudulent claims (offences under Section 93 of the SOCSO Act)

  • For foreign workers: cases where a valid pass or permit is misused, or immigration requirements are breached

Disease-related conditions are also excluded … the scheme covers accident injuries, not illness.

How Will Contributions Change?

This is where it gets important for payroll.

The new Act introduces employee contributions specifically for non-employment injury coverage, to be rolled out in three distinct phases. Previously, Second Category contributions were paid by employers only. Under the new structure, employees will also contribute.

The exact new contribution rates are yet to be confirmed via gazette, but rumor has reported that contribution rate increases are planned as part of the amendment. PERKESO has indicated implementation will be in phases, with the first phase targeted for early to mid-2026.

Employers should watch the PERKESO official portal (www.perkeso.gov.my) closely for the updated contribution tables once gazetted.

Key payroll note

Where an employee holds two or more concurrent jobs, the employee may designate one employer to handle the non-employment injury contributions. That chosen employer then becomes responsible for remitting those contributions though the obligation to pay them remains the employee's.

Who Benefits from This Change?

According to the Human Resources Ministry, more than 9.6 million active SOCSO contributors in the formal sector stand to benefit from LINDUNG 24/7. The initiative is particularly significant because today, only around 42% of Malaysian workers have personal accident insurance or takaful cover. For the remaining 58% that includes many of your staffs.

LINDUNG 24/7 could be their only accident protection outside of work.

What SME Employers Should Do Now

1. Review your payroll system. Once the new contribution rates are gazetted, your payroll software will need to be updated. If you are running manual payroll, make sure whoever handles your monthly SOCSO submission is aware of the incoming changes.

2. Communicate with your employees. Your staff deserve to know they will soon have expanded coverage and that their contribution obligations may increase. A simple briefing can go a long way in managing expectations.

3. Watch for the official PERKESO circular. The final effective date and phased contribution rates will be confirmed via gazette notification. Subscribe to updates from PERKESO or engage your tax and payroll adviser to stay current.

4. Foreign workers are affected differently. The non-employment injury exclusion for foreign workers who breach immigration conditions adds a layer of compliance consideration if your workforce includes foreign employees.

5. Multiple employers clarify with affected staff. If you have part-time or gig workers on your payroll who also work for other companies, clarify early which employer will handle the non-employment injury contribution remittance.

Our Take

LINDUNG 24/7 is genuinely good news for workers. The reality is that life does not stop when the clock-out bell rings, and injuries outside of work can be just as financially devastating as workplace accidents. Extending protection beyond the office or factory floor is the right policy direction.

For employers, the main impact is payroll compliance. Keeping up with the new contribution rates once they are confirmed, and ensuring your payroll processes are updated before the first affected salary cycle.

Disclaimer: This article is prepared based on publicly available information as at April 2026. The specific implementation date and revised contribution rates are subject to official gazette notification by the Minister of Human Resources. Employers should refer to the official PERKESO website or consult a professional adviser for the latest updates.

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