Setting Up Social Security Contributions

This chapter provides an overview of the Social Security Organization (SOCSO) contribution process and discusses how to:

Set up employer data.
Set up employee data.
Report SOCSO data.

Note. The PeopleSoft system delivers a query that you can run to view the names of all delivered elements designed for Malaysia. Instructions for running the query are provided in the PeopleSoft Enterprise Global Payroll 8.9 PeopleBook.

Understanding the SOCSO Contribution Process

Global Payroll for Malaysia enables you to make SOCSO contributions on behalf of employers and employees to pay for the invalidity pension benefit and employment injury benefits.

This section discusses:

Employee eligibility and scheme type.
Definition of SOCSO wages.
Calculation of SOCSO contributions.
Delivered SOCSO elements.

Employee Eligibility and Scheme Type

Payees should not begin making SOCSO contributions if they have an income over 2000 MYR. This does not mean that payees earning over 2000 MYR can't continue contributing. A payee making less than 2000 MYR could have been enrolled in SOCSO. Later, the payee's income level could have risen above 2000 MYR. In this case, employees can continue to make SOCSO contributions even though they currently make more than the maximum income. For this reason, eligibility to SOCSO is user-controlled. The payee can be enrolled in the employment injury scheme and the invalidity pension scheme, or the employment injury scheme only. Age determines eligibility, but you determine which scheme the system applies. Payees younger than 55 can be part of the former category, while those over 55 can be part of the latter only. Each scheme is linked to a different contribution schedule.

The array SOC AR EEDATA reads the SOCSO category, the employee SOCSO membership number, and the employer SOCSO reference number from the Payee SOCSO Data page.

The formula SOC FM CATEGORY determines the SOCSO category (scheme type) by using the duration SOC DR AGE to calculate the payee's age by comparing the birth date and the period end date.

Definition of SOCSO Wages

The formula SOC FM CONTRIB uses the accumulator SOC AC INCOME MTD to calculate the earnings that apply to SOCSO contributions. Arrears earnings are kept separate from SOCSO earnings. This enables the system to forward retroactive SOCSO contributions. Elements liable to SOCSO must contribute to accumulator SOC AC INCOME SEG.

The accumulator SOC AC INCOME YTD stores the employee's SOCSO income for the year.

Calculation of SOCSO Contributions

SOCSO contributions are deducted as a percentage of each ringgit earned. Therefore, contributions are calculated in each pay period of the month, regardless of the earnings per period.

The contribution calculation always uses the same calculation method for every frequency and every period in the month. In all cases, the system calculates:

The employer and employee contributions, assessing the contribution schedule table starting from the month-to-date income.
The difference between the calculated monthly contribution and the month-to-date contributions that were previously deducted.

If the difference is a negative amount, the amount is refunded.

No special processing requirements exist for termination payments.

Delivered SOCSO Elements

Global Payroll for Malaysia uses an array, formulas, variables, and deductions to:

Read payee SOCSO data.

The array SOC AR EEDATA stores the information that is entered on the Payee SOCSO Data page. The employee's SOCSO Category is stored as the variable SOC VR CATEGORY.
Read SOCSO Contributions.

SOC BR CTREMPLOYEE lists the employer and employee contribution, based on the income (SOC AC INCOME MTD) of the employee. There are two variables for SOC VR CATEGORY, GE which is the pensioner part of SOCSO, and LT, which is the combined Injury and pension scheme.
Check whether to calculate SOCSO.

The formula SOC FM CALCULATE checks the employee's SOCSO status and category to determine whether to calculate SOCSO.
Calculate the monthly SOCSO contribution based on the contribution schedule table.

The bracket SOC BR CTREMPLOYEE contains the variables and values that are needed to determine the monthly contribution based on payee income.
Calculate sliced Income for SOCSO.

SOC FM SLICEINC is used to slice the income for SOCSO calculation. It the employee has an increase in rate and the element is segmented, it calculates each slice correctly.
Split the contribution between employer and employee.

The formula SOC FM CONTRIB uses variables SOC VR CTREE and SOC VR CTRER to create employee and employer contributions.
Create SOCSO deductions.

The system uses the variables SOC VR CTREE and SOC VR CTRER to supply the SOCSO EE and SOCSO ER deductions.

Setting Up Employer Data

To set up employer data, use the SOCSO Number table MYS (GPMY_SOC_TBL) component.

This section discusses how to:

Enter reference number contact information.
Associate a SOCSO number with an organizational link.

Pages Used to Set Up Employer Data

Page Name	Object Name	Navigation	Usage
SOCSO Table	GPMY_SOC_TBL	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Social Security / Insurance, SOCSO Number Table MYS	Maintain employer contact information for SOCSO reporting.
SOCSO Data	GPMY_SOC_ORG_NBR	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Framework, Organizational, Organization Numbers MYS	Associate a SOCSO number with an organizational unit, such as company, pay group, location, establishment, or department.
SOCSO Number Details	GPMY_SOCSO_ORG_SEC	Click the details button on the SOCSO Data page.	View employer details that are associated with the SOCSO number.

Entering Reference Number Contact Information

Access the SOCSO Table page.

Statutory Region

Enter the statutory region. This region is reported on the following forms: EPF Form 6, SOCSO Form 8A, SOCSO Form 8B, CP39 Monthly Statement of Tax Deductions - Electronic form, Employee Tax Refund Form - Malaysian CP159A/PCB2(II).

Registered Name

Enter the employer's official name.

Address

Enter the employer's address.

Responsible ID

Enter the employee ID of the organization's SOCSO contact. The system populates other fields on this page that are related to this value.

Name

Enter the name of the contact person of the company for SOCSO inquiries. This name will be printed on the SOCSO reports.

National ID

Enter the contact person's national ID.

Job Title

Enter the job title of the company contact for SOCSO inquiries. This information will be printed on the SOCSO reports.

Telephone and Fax

Enter the numbers of the company contact for SOCSO inquiries. The phone number will be printed on the SOCSO reports.

Associating a SOCSO Number with an Organizational Link

Access the SOCSO Data page.

Organizational Link Option

Select the organizational link. Options are: Company, Pay Group, Location, Establishment, and Department.

Load All Units

Click to insert all possible organizational units in the organizational link list. Then you can specify the SOCSO number for each unit.

Effective Date and Status

Enter the effective date and status of the organization link. If the organizational link option changes, all the organizational units are deleted and all past organizational link options become inactive.

Details

Click to view the SOCSO Reference Number Details page, which displays the employer details that are associated with the SOCSO number.

Setting Up Employee Data

This section discusses how to enter employee SOCSO data.

Page Used to Set Up Employee Data

Page Name	Object Name	Navigation	Usage
Payee SOCSO Data	GPMY_SOC_PYE	Global Payroll & Absence Mgmt, Payee Data, Social Security/Insurance, Maintain SOCSO MYS	Associate an employer number with an employee, select the IC indicator status, and select the SOCSO category.

Entering Employee SOCSO Data

Access the Payee SOCSO Data page.

IC Indicator

Select the type of IC number. Values are: Old and New or N/A. This IC number is used in legal reports.

Employer Number

Select the employer's SOCSO number. If the organizational link has only one employer number, the system displays that number by default. Otherwise, select from the possible SOCSO numbers. If the organizational data changes for an employee, you must change the employer number manually.

Membership Number

Enter the employee membership number. The system verifies the adherence to the A9999999A format.

SOCSO Category

The scheme in which the payee is enrolled depends on age. Select < 55 or >=55 to assign the category, or select Payroll to have the system calculate the category using the payee's age.

Reporting SOCSO Data

Global Payroll for Malaysia enables you to create a report summarizing SOCSO contributions, as well as the following SOCSO reports that required by the Inland Revenue Board:

SOCSO Form 8A.
SOCSO Form 8B.
SOCSO Form 2.
SOCSO Form 3.

Statutory Region	Enter the statutory region. This region is reported on the following forms: EPF Form 6, SOCSO Form 8A, SOCSO Form 8B, CP39 Monthly Statement of Tax Deductions - Electronic form, Employee Tax Refund Form - Malaysian CP159A/PCB2(II).
Registered Name	Enter the employer's official name.
Address	Enter the employer's address.
Responsible ID	Enter the employee ID of the organization's SOCSO contact. The system populates other fields on this page that are related to this value.
Name	Enter the name of the contact person of the company for SOCSO inquiries. This name will be printed on the SOCSO reports.
National ID	Enter the contact person's national ID.
Job Title	Enter the job title of the company contact for SOCSO inquiries. This information will be printed on the SOCSO reports.
Telephone and Fax	Enter the numbers of the company contact for SOCSO inquiries. The phone number will be printed on the SOCSO reports.

Organizational Link Option	Select the organizational link. Options are: Company, Pay Group, Location, Establishment, and Department.
Load All Units	Click to insert all possible organizational units in the organizational link list. Then you can specify the SOCSO number for each unit.
Effective Date and Status	Enter the effective date and status of the organization link. If the organizational link option changes, all the organizational units are deleted and all past organizational link options become inactive.
Details	Click to view the SOCSO Reference Number Details page, which displays the employer details that are associated with the SOCSO number.

IC Indicator	Select the type of IC number. Values are: Old and New or N/A. This IC number is used in legal reports.
Employer Number	Select the employer's SOCSO number. If the organizational link has only one employer number, the system displays that number by default. Otherwise, select from the possible SOCSO numbers. If the organizational data changes for an employee, you must change the employer number manually.
Membership Number	Enter the employee membership number. The system verifies the adherence to the A9999999A format.
SOCSO Category	The scheme in which the payee is enrolled depends on age. Select < 55 or >=55 to assign the category, or select Payroll to have the system calculate the category using the payee's age.