Why SOCSO Regarded As Relief in The EA Form?

The relief amount in the EA Form captures the SOCSO amount paid by the employee for the whole year as their employee profile has been ticked to auto-include SOCSO/EIS deduction to calculate MTD as you can see below.

How does the SOCSO amount affect the MTD calculation?

Below is the breakdown of the MTD Calculation retrieved from the LHDN Calculator. Once the SOCSO is included in the Calculation, the final amount of MTD will be reduced.

ELP = Accumulated relief amount from previous months
LP1 = Relief amount from the current month

What is TP1 Form?

• The TP1 Form is an income tax form that is given by the employee to the employer to ensure that the MTD (monthly tax deductions) have taken into account the necessary rebates and deductions in order to reduce the MTD amount during the whole year.
  
  
• It can be said that it is a type of internal form that will be kept as a reference by the employer of what kind of relief amount they can use to reduce the MTD calculation with employee acknowledgment and this TP1 form is not needed to be sent to any authority.
  
  
• As we have ticked the SOCSO/EIS to be auto-included in the tax deduction, thus the SOCSO is regarded as a relief amount that is reflected under D5(a) of the EA Form. So by right, this procedure is correct as the SOCSO contribution can be claimed as relief during the year of assessment.

( Adapted from https://www.hasil.gov.my/individu/kitaran-cukai-individu/lapor-pendapatan/pelepasan-cukai/) 

• You may find the articles on how to update the employee TP 1 form: https://worksy.freshdesk.com/support/solutions/articles/63000274208-how-to-update-employee-tp-1-form-