Statutory contributions are payable when a payment is made. Therefore, if you are giving a salary advance to an employee via payroll, that payment should be subject to applicable statutory contributions.
In PayrollPanda, you can use the preset item Advance Payment to pay an advance to your employees. Advance Payment is subject to all statutory deductions.
Advance deduction (if advance was made via payroll)
You have given an advance to your employee via payroll and wish to deduct the amount during a subsequent payroll month. Since the statutory contributions have already been deducted from the advance payment, the advance repayment deduction should now reduce the wages subject to statutory contributions.
So for example, if you gave an advance of RM500 to your employee in May and their monthly salary is RM2,000 and you are now deducting the payment from their June salary, your employee should pay statutory contributions on wages amounting to RM2,500 (2,000 + 500) in May and RM1,500 (2,000 – 500) in June.
In PayrollPanda, you can use the preset deduction Advance (Payment Made via Payroll) to deduct the amount of advance previously paid to your employee via payroll. Advance (Payment Made via Payroll) affects all statutory contributions by reducing the wages subject to contributions.
Advance deduction (cash advance)
If the advance was paid cash outside of payroll, whether in any previous month or in the current month, and no statutory contributions were deducted from the advance, and you are now making the advance repayment deduction via payroll, the deduction should be a net salary deduction which does not reduce the statutory contributions (as no contributions were previously deducted from the payment).
So to reuse the previous example, if you gave RM500 cash to your employee in May and you want to deduct the amount in June payroll, your employee should pay statutory contributions on their normal RM2,000 salary.
In PayrollPanda, you can use the preset deductions Net Salary Deduction or Loan to deduct the amount of advance previously paid in cash to your employees.