More than just a payslip deduction: What Perkeso actually does for Malaysian workers
KUALA LUMPUR, May 26 — For many Malaysians, contributions to the Social Security Organisation (Perkeso) are little more than a routine deduction listed on their monthly payslips, quietly reducing take-home salaries.
But economists say the scheme plays a far wider role in protecting workers against job loss, disability, workplace injuries and long-term income disruption.
A worker earning the minimum wage of RM1,700 contributes RM8.50 a month to Perkeso, alongside RM3.40 to the Employment Insurance System (EIS), while employers contribute RM29.75 to Perkeso and another RM3.40 to the EIS.
Centre for Future Labour Market Studies economist Zharif Luqman Hashim said the system exists to ensure workers have basic social protection when unexpected situations arise.
Beyond workplace accidents, Perkeso’s Employment Injury Scheme covers both workplace and commuting-related injuries, while the Invalidity Scheme provides round-the-clock protection in cases involving disability or death.
The EIS, meanwhile, offers temporary income support and job-search assistance for workers who lose employment.
The system also includes rehabilitation support, dialysis treatment, prosthetics and return-to-work programmes.
Zharif noted that unlike private insurance, Perkeso operates as a compulsory social protection system where contributions are pooled and linked to wages rather than individual health risks.
This means lower-income workers and those in higher-risk occupations are not excluded from coverage.
“Covering medical bills alone does not solve the real problem most families face after an injury or illness, which is the loss of income and work capacity,” he said.
He added that Perkeso’s role extends beyond healthcare support by helping injured workers regain employment and financial stability.
Malaysia Institute of Economic Research senior fellow Azizul Amiludin said private insurance cannot fully replace the function of social insurance systems such as Perkeso.
He explained that under normal actuarial assessments, workers in riskier occupations would likely face significantly higher insurance premiums if coverage depended solely on private policies.
The report also highlighted growing pressure on social protection systems as Malaysia’s ageing population expands.
Malaysians aged 65 and above made up 8 per cent of the population in 2025, up from 7.6 per cent the previous year.
Azizul said policies encouraging older Malaysians to remain economically active may become increasingly important, although job opportunities must match their physical abilities and experience.
He also warned that rising healthcare costs, demographic shifts and a potentially shrinking contributor base could place added strain on the system over time.
Currently, Perkeso’s contribution rate remains at 2.25 per cent, unchanged since its establishment.
Sustainability measures have instead focused on raising the wage ceiling from RM5,000 to RM6,000 rather than increasing contribution rates.
Zharif said Perkeso should be viewed as a long-term investment in labour force stability rather than merely a payroll deduction.
Azizul added that without such a system, the financial and social burden would ultimately fall on families and public welfare institutions.
“Social insurance should not be seen merely as an individual expense, but as a collective investment in social stability and economic resilience,” he said.
المصدر: Malay Mail
