Malaysia's payroll landscape has changed once again.
Just over a month after the implementation of PERKESO's Lindung 24 Jam (Skim Kemalangan Bukan Bencana Kerja – SKBBK), the Government announced that participation will no longer be mandatory for Malaysian employees. While the scheme itself remains in force, payroll teams now need to manage different contribution rules for local and foreign workers.
If your company processes payroll in Malaysia, here's what you need to know.
A Quick Recap: What Is Lindung 24 Jam?
Lindung 24 Jam was introduced under the Employees' Social Security (Amendment) Act 2026 (Act A1788).
Unlike the traditional Employment Injury Scheme, which covers work-related accidents, Lindung 24 Jam extends protection to accidents occurring outside working hours and outside the workplace, provided they occur within Malaysia.
The scheme applies a contribution of 0.75% of monthly wages, fully borne by employees, subject to a wage ceiling of RM6,000. Over time, the contribution rate will gradually increase to 1.25%.
Since its implementation, millions of employees have automatically been covered under the new scheme.
What Changed?
On 8 July 2026, the Cabinet announced that participation in Lindung 24 Jam would become voluntary for Malaysian workers.
The following day, Human Resources Minister Datuk Seri R. Ramanan clarified that the decision only applies to Malaysian employees.
This means:
- Malaysian employees may choose whether to continue contributing.
- Foreign employees must continue contributing as required under existing legislation.
The Government has therefore introduced a dual approach to the same statutory contribution.
Employees Who Wish to Opt Out
Following the Government's announcement, SOCSO confirmed that Malaysian employees who decide not to participate must complete a Liability Release Certificate.
Employees are also required to notify their employer or Human Resources department so that future payroll deductions can be updated accordingly.
For employers, this means payroll can no longer apply the same rule to every employee.
What Should Employers Do?
1. Leave June Payroll Untouched
If SKBBK contributions were deducted in June, there is no need to make adjustments.
Those contributions were correctly processed under the law at that time and remain valid.
Employees continue to enjoy the insurance protection provided during that contribution period.
2. Update July Payroll Onwards
From the July payroll onwards:
- Malaysian employees who choose to continue participating should remain under SKBBK deductions.
- Malaysian employees who opt out should have the deduction removed.
- Foreign employees should continue contributing without interruption.
This means payroll administrators must now determine SKBBK eligibility individually instead of applying a company-wide setting.
3. Communicate Clearly With Employees
Many employees may assume the Government's announcement applies to everyone.
It doesn't.
Employers should explain:
- June deductions remain valid.
- Malaysian employees now have a choice.
- Foreign employees are still required to contribute.
Clear communication helps reduce payroll queries and prevents unnecessary confusion.
Why Payroll Systems Need More Flexibility
The changes over the past few weeks demonstrate how quickly statutory payroll requirements can evolve.
Within just six weeks, employers experienced:
- A brand-new statutory contribution.
- Mandatory implementation for all employees.
- A policy revision making it voluntary for Malaysians while remaining compulsory for foreign workers.
Payroll systems that rely on fixed statutory rules often require manual work whenever legislation changes.
By contrast, systems that allow statutory settings to be configured at the employee level can adapt much more easily.
How HR Buku Makes Compliance Easier
As the free HR software in Malaysia HR Buku, we understand that payroll legislation is constantly evolving.
Our payroll system allows statutory contributions—including EPF, SOCSO, EIS, HRDF, PCB, and SKBBK—to be configured based on each employee's eligibility instead of applying a single rule across the entire company.
With the latest SKBBK update, HR Buku enables employers to:
- Continue mandatory deductions for foreign employees.
- Enable or disable SKBBK for Malaysian employees based on their opt-in decision.
- Generate accurate statutory calculations automatically.
- Display the correct deductions on employee payslips.
- Reduce manual payroll adjustments whenever regulations change.
Instead of modifying your payroll process every time the law changes, HR Buku helps you stay compliant with minimal effort.
Final Thoughts
The latest announcement does not mean Lindung 24 Jam (SKBBK) has been abolished.
The SKBBK scheme remains active, and employees who choose to participate will continue to receive its protection.
The key change is that payroll teams must now administer two different contribution rules:
- Malaysian employees – voluntary participation.
- Foreign employees – mandatory participation.
As Malaysia's employment regulations continue to evolve, employers need payroll systems that are flexible enough to respond quickly and accurately.
At HR Buku, we believe payroll software should simplify compliance—not make it more complicated. That's why our payroll system Malaysia is built to adapt to regulatory changes, helping businesses stay compliant while reducing administrative work and payroll errors.
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