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Breakdown of Payroll & Tax Contribution Amounts

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Disclaimer: This calculator is offered for informational and reference purposes only. Calculations are not meant to supplant or serve as a substitute for professional guidance or official tax calculations provided by the Inland Revenue Board of Malaysia or other relevant authorities.

Understanding Salary Calculations in Malaysia

Managing payroll in Malaysia involves understanding various deductions and contributions mandated by law. Here’s a breakdown of the key components impacting your employee’s take-home pay:

 

    1. Gross Salary: This is the base salary you offer your employee before any deductions.
    2. Mandatory Deductions: These are required by law and deducted from the gross salary
      1. Employee Provident Fund (EPF)
      2. Social Security Organisation (SOCSO)
      3. Employment Insurance System (EIS)
    3. Income Tax: This is a tax levied by the government on an individual’s taxable income. The amount is calculated based on income brackets and marital status.
    4. Net Pay (Take-Home Pay): This is the final amount your employee receives after all deductions are subtracted from the gross salary.

 

If you need an EIS calculator, EPF calculator, or SOCSO calculator, we’ve got you covered!

 

How to Use a Malaysian Salary Calculator?

 

Using our salary calculator is quick and easy! Here’s a step-by-step guide:

    1. Enter your monthly salary: Input your gross monthly salary before any deductions.
    2. Select your residential status: Choose between “Malaysian”, “Permanent Resident” or “Non-malaysian”.
    3. Click Calculate: Once you’ve entered the details, click the “Calculate” button to see a detailed breakdown of your salary and contributions.

 

What is the Employee Provident Fund (EPF)? 

 

The Employees Provident Fund (EPF) is a mandatory retirement savings scheme in Malaysia. Employees and employers both contribute to the EPF, with contribution rates based on the employee’s age and residential status. EPF deductions are essential for building a retirement fund and ensuring financial security post-employment.

 

What is the Social Security Organisation (SOCSO)?

 

The Social Security Organization (SOCSO) provides social security protection and benefits to employees in Malaysia. SOCSO contributions are made by both employees and employers to fund various social security programs, including medical treatment, disability benefits, and financial assistance for work-related injuries or illnesses.

 

What is the Employment Insurance Scheme (EIS)?

 

The Employment Insurance System (EIS) is designed to provide income support to employees who have lost their jobs.EIS benefits include financial assistance for job loss, job search allowances, and training programs to enhance employability. Read more about payments subjected and exempted to SOCSO/EIS.

 

PayrollPanda: Your One-Stop Payroll Solution!

 

Streamline your payroll processes and ensure accuracy with PayrollPanda, an LHDN-approved payroll solution for all your needs. Whether you’re a small business, a growing startup, or an established enterprise, PayrollPanda offers a user-friendly platform to automate and manage your salary calculations effortlessly.

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Customizable Settings for Flexibility

 

Tailor EPF, SOCSO, and EIS calculations effortlessly to suit your specific requirements. Adjust contribution rates, salary components, and other variables with ease, ensuring they align perfectly with the needs of your organization.

 

Generate Payslips with a Click

 

With PayrollPanda, creating professional and detailed payslips for your employees is as simple as a click. Our platform stays updated with the latest Malaysian tax regulations and contribution requirements, guaranteeing that your payroll is always compliant. 

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Hassle-Free Payroll

 

Ready to revolutionise your payroll process? Sign up for a FREE trial of PayrollPanda today and experience the ease and efficiency of automated salary calculations firsthand.

 

 

FAQs

Some frequently asked questions...

Yes, EPF, SOCSO, and EIS contributions are mandatory for both employees and employers in Malaysia.

These contributions help employees build retirement savings, receive social security benefits, and get income support during job loss.

EPF, SOCSO and EIS contributions are typically made monthly, with both employees and employers sharing the contribution burden.

Malaysian salary calculators typically take your gross salary and residential status to estimate your net pay. They automatically calculate deductions like EPF, SOCSO and EIS which helps you understand your take-home pay and saves time on manual calculations.

The most effective way to automate salary calculations is by using a payroll software tailored for Malaysian businesses, such as PayrollPanda.

Not only is PayrollPanda LHDN-approved and completely FREE for 30 days, it also stays up-to-date with the latest Malaysian tax regulations and contribution requirements!

Absolutely! PayrollPanda is built specifically for Malaysian payroll. It handles everything from EPF, SOCSO, and EIS contributions to generating accurate payslips in minutes.

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