Foreign Worker Insurance: SOCSO, SPIKPA and Workmen's Comp

The short answer

Foreign workers in Malaysia are protected by two kinds of statutory cover, and employers sometimes add a private layer on top. PERKESO (SOCSO) runs two schemes for foreign workers: the Employment Injury Scheme, which covers work-related injury, disablement and death, and the Invalidity Scheme, which covers invalidity or death from any cause. Separately, the SPIKPA health scheme covers hospitalisation and surgery and is tied to work permit renewal. A private workmen's compensation policy is optional and is designed to respond where those schemes stop. They do different jobs, and one does not replace another.

A quick history: from the Workmen's Compensation Act to SOCSO

Before 2019, foreign workers were covered for work injuries under the Foreign Workers' Compensation Scheme, which sat under the Workmen's Compensation Act 1952. From 1 January 2019, foreign workers were brought under SOCSO's Employment Injury Scheme instead, so that local and foreign workers have comparable protection for workplace injury. From 1 July 2024, PERKESO also extended the Invalidity Scheme to foreign workers. Our guide to the Workmen's Compensation Act 1952 covers that background.

Layer 1: SOCSO (PERKESO) schemes

Employment Injury Scheme (since 1 January 2019)

• Who it applies to: foreign workers with a valid passport and work pass issued by the Immigration Department, including expatriates and foreign domestic workers.
• Who pays: the employer only. The published rate is 1.25% of the worker's insured monthly wages, due by the 15th of the following month. Check PERKESO for the current rate and wage ceiling.
• What it covers: medical benefits, temporary and permanent disablement, dependants' benefits, funeral benefit, constant-attendance allowance and rehabilitation, for work-related injury and illness.

Invalidity Scheme (since 1 July 2024)

• What it covers: invalidity or death of the worker from any cause, not only work-related ones. Benefits include invalidity pension, invalidity grant, survivors' pension and funeral benefit.
• Who pays: the cost is shared. PERKESO's published rates are 0.5% from the employer and 0.5% from the worker, on top of the employer's Employment Injury contribution. Workers who first enter the scheme at age 55 or older are generally covered by the Employment Injury Scheme only, so check PERKESO's rules for your workers.

The benefits are set by the schemes, with their own rules and limits. They are not tailored to your business.

Layer 2: the SPIKPA health scheme

SPIKPA is the proof of the Foreign Workers Hospitalisation and Surgical Insurance Scheme (SKHPPA). It is a mandatory hospitalisation and surgical policy for foreign workers, in place since 2011.

• It pays hospital and surgical bills up to a fixed annual limit. The published limit has been RM10,000 a year, so confirm the current figure.
• It is linked to the work permit. Workers without it cannot renew their permits.
• Employers have been required to pay for plantation and domestic maid workers. In other sectors, employer and worker agree who pays.
• Unpaid hospital bills at government hospitals can hold up permit renewal.

SPIKPA is about illness and injury in general, not just at work. It is not workplace-injury cover, and it is separate from SOCSO.

Layer 3: workmen's compensation insurance (optional)

A private workmen's compensation policy can sit alongside SOCSO. It is designed to help where the statutory benefits stop: for example, a claim that goes beyond what SOCSO pays, or a worker who falls outside the scheme. What it pays depends on the policy wording, so ask your insurance broker or agency how it works with SOCSO for your business.

It is a choice about managing risk, not a general legal requirement. For the practical side, see the value of workmen's compensation insurance.

What does each layer cover? At a glance

• Injured at work: SOCSO's Employment Injury Scheme first. A private policy may add to it.
• Invalidity or death from any cause: SOCSO's Invalidity Scheme, if the worker is covered under it.
• Hospitalised for an illness unrelated to work: SPIKPA, up to its annual limit.
• Hospital costs above the SPIKPA limit: not covered by SPIKPA. You may want group medical insurance.
• Outpatient visits and everyday clinic costs: not covered by either scheme.

Employer checklist

• Register eligible foreign workers with SOCSO and pay contributions on time.
• Keep each worker's SPIKPA slip and policy documents for permit renewals.
• Settle hospital bills promptly so permit renewals are not delayed.
• Count foreign workers when you give your insurance broker or agency a headcount.
• Check how subcontractors cover their own foreign workers, especially on sites you control.
• Confirm current rates, ceilings and limits with PERKESO or the relevant authority, since they change.

Common questions

If I pay SOCSO, do I still need a workmen's compensation policy?
It is not a general legal requirement. Whether you add one depends on how much risk you want to carry above SOCSO's benefits. An insurance broker or agency can help you weigh it up for your type of work.

Are SOCSO and SPIKPA the same thing?
No. SOCSO covers work-related injury and invalidity through national schemes. SPIKPA proves a hospitalisation and surgical policy, and covers illness or injury generally, up to its annual limit.

What happens if I do not register my foreign workers?
Registration is the employer's responsibility, and penalties can apply. Read what happens when an employee is injured and you have no cover, and check PERKESO's guidance.

Do domestic helpers fall under SOCSO?
PERKESO states that foreign workers, including expatriates and domestic workers, are protected under its Employment Injury and Invalidity schemes. SPIKPA rules apply separately. Confirm the current rules for your worker's pass type with PERKESO.

What should I do if a foreign worker is hurt at work?
Get the worker treated first, then report to PERKESO within the required time. Our step-by-step guide on what employers should do when a foreign worker is injured walks through it.

Related reading

For employees at large, see our guide to group hospitalisation and surgical insurance. If a worker is injured, see what employers should do step by step. Prefer Bahasa Malaysia? Read the Malay version of this guide.

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