Millions of Malaysians work without the safety net of a regular employer. Gig workers, freelancers, hawkers and small business owners often have no automatic social security cover. Budget 2027 tries to nudge them towards protection by adding a new tax incentive for voluntary SOCSO (PERKESO) contributions.
What changed
Taxpayers can already claim a relief of up to RM350 for qualifying SOCSO contributions. Under Budget 2027:
- The RM350 limit stays the same. Its scope is widened to include mandatory contributions under the Self-Employment Social Security Scheme (Lindung Kendiri) for three sectors: passenger transport, goods and food transport, and hawkers.
- A separate additional relief of up to RM150 is proposed for qualifying voluntary contributions to Lindung 24 and Lindung Kendiri across 17 non-mandatory sectors.
The aim is to encourage social security coverage among self-employed people, including gig workers and hawkers.
How the two reliefs work together
The new RM150 is described as a separate additional relief, not an increase to the RM350 cap. In practice:
| Relief | Limit | What it covers |
|---|---|---|
| Existing SOCSO relief | RM350 | Qualifying SOCSO contributions, now including mandatory Lindung Kendiri for three sectors |
| New additional relief | Up to RM150 | Qualifying voluntary contributions to Lindung 24 and Lindung Kendiri in 17 non-mandatory sectors |
If you qualify under both, your combined relief could reach up to RM500. The exact rules on how the two interact will depend on the final guidelines.
Who benefits most?
- Self-employed individuals in sectors where contributing is optional.
- Freelancers and independent professionals who choose to protect themselves.
- Gig and platform workers who make their own contributions.
- Small business owners who pay for their own coverage.
If you are an employee whose employer already pays your SOCSO contributions, this additional relief is not aimed at you.
How much could it save?
Relief reduces chargeable income, not tax directly. As an illustration, not an official figure: if you claim the full RM150 and your top bracket is 18%, the tax saving is about RM27 (RM150 × 18%). The tax benefit is modest. The real value is the protection that SOCSO coverage gives you, such as support in the event of injury or other covered events, and the relief makes it slightly cheaper.
Details still to come
As the slide notes, the implementation arrangements, eligibility criteria and effective date will be announced by the government. In particular, watch for which 17 sectors are covered, which schemes qualify as voluntary contributions, and what proof of payment is required. The measure is likely to apply from the 2027 year of assessment, but this should be confirmed once the legislation and LHDN guidelines are published.
What to do now
- Check your coverage. If you are self-employed, find out whether your sector requires or allows contributions.
- Keep payment records. Save official PERKESO receipts and statements for every contribution.
- Separate mandatory and voluntary contributions in your records, because they may be treated differently.
- Wait for guidance before you finalise your YA 2027 claim.
Speak to AdrianYeo Tax
For self-employed individuals and small business owners, tax and social protection should be planned together. Our chartered accountants can help you understand what you can claim and keep your records organised.
This article is for general information only and does not constitute tax advice. Measures are based on Budget 2027 announcements and may change when the legislation is finalised. Please consult a tax professional about your specific circumstances.
