If you’re looking for a comprehensive guide to Malaysian payroll, you’ve come to the right place! In this article, we’ll explain how to calculate the net monthly salary for each employee by starting with the gross salary and then deducting tax, pension, and social security contributions. Here are the deductions that need to be made:
- PCB: monthly tax deductions based on provisional annual income and with a progressive tax rate up to 30%; payable to LHDN by 15th of the following month.
- EPF: retirement scheme contributions; employee contribution rate is 11% for Malaysians under 60; employers also contribute 12/13% depending on salary; payable to KWSP by 15th of the following month.
- SOCSO: social security protection in case of injury/invalidity; for the main scheme (Malaysians under 60) the employee contributes 0.5% and the employer 1.75%; payable to PERKESO by 15th of the following month.
- EIS: employment insurance scheme to provide financial assistance to retrenched employees; Malaysians aged 18 to 60 contribute 0.2% and the employer 0.2% as well; payable to PERKESO by 15th of the following month.
It’s important to note that every year, the following forms must be provided:
- Form EA to be given to each employee detailing their income and contributions during the year; by the end of February of the following year.
- Form E detailing income and contributions of all employees to be filed online with LHDN by 31 March of the following year.
To gain additional information or seek any help, contact us at Zentrusted.
This content is for informational purposes only and does not constitute professional advice. Always refer to the official websites/guidelines/regulations of the relevant authorities for detailed information and consult with a professional for personalized guidance.