Payroll Malaysia And It’s Calculations

Malaysia has specific rules for taxation and payroll, depending on whether your company employs local Malaysian or foreign nationals employees. The main concerns for a company that must comply with tax laws are social security costs, sales and services tax (SST), personal income tax for employees in Malaysia, business tax, payroll tax, withholding tax, and problems with the permanent establishment.

Payroll Cycle: If you are covered by the Employment Act 1955, your employer must pay you a wage at least once a month. They can also pay at shorter intervals if they wish. Salaries must be paid:

• Within 7 days after the end of the pay period
• Overtime work within 14 days after the end of the pay period.

Payroll Calculator Malaysia is an online application that provides the user with information about the payroll calculator in accordance with the laws applicable to the payroll system. It can also be called a “monthly salary calculator” for company employees in Malaysia. The payroll calculator can be applied to long-term or newly hired employees in a company.

Monthly Payroll Calculation

Total monthly wages and deductions are divided into EPF-eligible and non-EPF-eligible income. The employee and employer EPF is calculated based on the gross income subject to EPF taxation. EPF can be based on government defaults or set to individual rates as needed. The EPF Calculator automatically calculates the correct values based on the preset EPF rates.

Overtime Payroll Calculations

The Overtime Payroll Calculation is used to calculate income based on overtime rates for work performed after normal working hours, holidays and weekends. Legal overtime rates are 1.5, 2.0 and 3.0 on normal days, holidays, rest days, respectively. These payroll rates apply to all employees who fall within the definition of the Malaysian Employment Act.

These rates are legally binding for all employees with a base salary of up to RM2,000 and for specific categories of employees. For employees with higher wages, hourly wages are negotiable. For negotiated hourly rates, 1.0 rates will be applied.

Other Salary Calculations

There are other less used payroll calculations such as bonus and unpaid leave, or annual leaves. Other salary calculations are infrequent but are still a significant component of monthly payroll calculations. These calculations are also fully automated for error-free payroll management. This easy-to-use payroll calculation makes it accurate and easy to process monthly payrolls, saving you time and stress.