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Malaysian Payroll Overview
Let’s have a go at describing Malaysian payroll in 200 words… For each employee, you start with gross salary for the month. Then you need to deduct tax, pension and social security contributions to get to the net monthly salary: PCB: monthly tax deductions based on provisional annual income and with a progressive tax rate […]
What is the difference between a foreigner and a non-resident for payroll purposes?
SOCSO From 1 July 2024, foreign employees contribute to SOCSO in the same way as Malaysian employees (Employment Injury Scheme and Invalidity Scheme for employees aged below 60, and Employment Injury Scheme only for employees aged 60 and above). EPF Foreign employees are not required to contribute, but may choose to do so. This is […]
How do I register as an employer?
As an employer – whether a company, sole proprietor, partnership, association or other – you must register with EPF, SOCSO, LHDN, and – for employers with at least 10 full-time Malaysian employees – HRDF. EPF According to Section 41(1) of the EPF Act 1991, an employer shall register with the EPF within 7 days from […]
How to pay an employee leaving my company?
Salary Payout After Termination When an employee resigns or is terminated, certain payments like Severance pay, Payment in lieu of notice and Leave pay may become payable. Severance pay When an employee is terminated, they may be paid severance pay. Severance pay is exempt from EPF and SOCSO/EIS. In addition any part of the severance pay which is […]
Employment Act Amendments from 1 January 2023
The Employment (Amendment) Act 2022 came into force on 1 January 2023. Here is a breakdown of the main changes which may affect your business. Who is now covered under the Employment Act? The most far-ranging changes to the Employment Act, which were actually enacted under the separate Employment (Amendment of First Schedule) Order 2022, concern the expansion […]
What is the difference between perquisites and benefits-in-kind?
Benefits-in-kind Benefits-in-kind are benefits provided by or on behalf of your employer that cannot be converted into money. This means that when the benefit is provided to the employee, that benefit cannot be sold, assigned or exchanged for cash either because of the employment contract or due to the nature of the benefit itself. For example, […]
How to determine the value of benefits-in-kind?
Benefits-in-kind (BIKs) are benefits provided to the employee by or on behalf of the employer that cannot be converted into money. When taxable, BIKs must be added to the payroll so they can be included in the PCB calculation. So how to determine the value to be added to the payroll? There are 2 methods specified […]
How to determine the value of living accommodation?
Definitions “Defined value”, in relation to living accommodation provided for an employee by his employer, means: Where the accommodation is not affected by any written law providing for the restriction or control of rents and the person so providing the accommodation holds the accommodation on lease the rent which is or would have been paid […]
What yearly payroll forms do companies need to prepare?
EPF and SOCSO There are no yearly EPF or SOCSO forms that need to be submitted. LHDN (Tax board) Form E – Statement of remuneration paid to employees and PCB deducted during the year. Must be submitted to LDHN by March 31st. Click on How do I submit form E? for more information. Form EA – Statement of total […]
Where can I find the numbers needed for setting up an employee?
PCB number The PCB number can be found on the second page of Form CP 39. Otherwise, your employee can directly check via https://mytax.hasil.gov.my/ under e-Daftar and fill in their details and click Search. Don’t have a PCB number yet? Please register Online (e-Daftar) which is accessible from MyTax by selecting Individual as the Type of […]
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