Version 1.2.

2024
 TABLE OF CONTENTS
Introduction Employee Perspective

Why Choose SQL Payroll? 1 Necessary Employee Profile Information Required

34
Comparison Between Desktop Based & Cloud Based 3
Onboarding Tips for New Joiner
36
SQL E Leave/ HRMS App 4
Statutory Body (EPF)
37
Statutory Body (SOSCO)
38
Statutory Body (EIS)
Employer Perspective 39
Statutory Body (PCB)
40
Statutory Body (HRDF)
Necessary Information Required 9 42
Leave Entitlement & Public Holiday
Overview of Employer's Responsibilities On Statutory Contributions 11 43
Allowance Tax Exemption Rules
Frequently Asked Questions Regarding Statutory Contributions 13 47
Conclusion & Disclaimer
Overtime Information 17 49
Leave Entitlement Calculation 20

Salary Payment Date & Payslip 22

Monthly Government Report 24

Yearly Government Report 25

Benefits In Kind (BIK) 26

Credit Bank Report 33

Introduction
 QUICK AND EASY MONTHLY FLEXIBLE AMENDMENT
PAYROLL PROCESSING

1 Enjoy speedy payroll processing and

view each earning breakdown with an
2 Edit payroll processes anytime anywhere
with SQL Payroll software. Experience
accurate, real time recalculations of
intuitive screen display and virtually keep
unlimited payroll history. statutory contributions.

COMPLIANT TO ALL LOCAL BANK GIRO ELECTRONIC PAYMENT

LEGISLATION MORE THAN 25 MALAYSIA BANKS

3 4
SQL Payroll is compliant to all Malaysian
statutory bodies like KWSP, LHDN and SOCSO. Make salary payments via electronic
Our system saves you the trouble by auto submissions. More than 25 Malaysia banks
calculating EPF, SOCSO, EIS, HRDF and PCB including Maybank, Hong Leong Bank,
contribution. To ensure flawless calculations, CIMB Bank, Public Bank can be used to
our PCB calculator comes with the latest perform bank giro on SQL Payroll Malaysia
contributions rates. software.

1
 PENDING PAYROLL TRANSACTIONS UNLIMITED MONTH END PROCESS

5 Enter overtime, claims, allowances,

bonus, leaves, tax benefits, and other
deductions in advance and incorporate it
6 Process multi month ends by groups. You
can process separate month end for
different groups of employees
later on into the final payroll for that
particular month

COMPREHENSIVE MANAGEMENT
REPORT FORM EA AND BORANG E, CP 8D

7 Our wide variety of customizable reports and

payslips allow you to create the ideal report
that truly represents your corporate identity
8 Generate employee forms EA and
employer form E and also perform e-
submission with SQL Payroll
and business nature

NOTE : SQL Payroll is a compliance and certifIed payroll software by LHDN

https://www.hasil.gov.my/media/jj0amwog/payroll-vendor-and-employer-2024.pdf

2
 Comparison between Desktop Based & Cloud Based
SQL Payroll is a versatile payroll software that offers both desktop-based and cloud-based solutions to cater
to different client needs. Here is a breakdown of the options:

Offline Operation Accessibility

Payroll data can be accessed from
Ideal for businesses that prefer to
anywhere with an internet connection,
manage their payroll systems locally
making it suitable for remote work or
without relying on internet
businesses with multiple locations.
connectivity.

01 01
Automatic
Security Updates
Data is stored on the 02 02 Cloud versions often come
company’s servers, providing with automatic updates,
control over sensitive payroll ensuring that the software
information. is always up-to-date with
VS the latest features and
compliance requirements.

03 Desktop-Based Cloud-Based 03
Version Version
Customization
Often provides more
customizable features that can
04 04 Data Backup
be tailored to the specific needs Cloud solutions generally
of the organization. provide automatic data
backups, reducing the risk
of data loss.
Single-location Customization
Best suited for companies with Often provides more
a centralized workforce and customizable features that can
fewer remote operations needs. be tailored to the specific
needs of the organization.

By providing both options, SQL Payroll caters to a wide range of businesses, from those that need a more traditional, secure
desktop setup to those that benefit from the flexibility and accessibility of cloud-based solutions.
3
 SQL E Leave / HRMS App
Transform your HR management with SQL HRMS Mobile App

Improved Workflow
Effortless Team Management
Identify potential issues and
Manage time attendance, enhance workflow planning
clock in/out, leave status,
expense claims, payslips, Real-Time Updates
and EA forms.
Stay informed with real-time
Comprehensive Overview attendance records and insights.

Track and review employee

Future of Work Management
activities and attendance
records. Experience modern, efficient
HR management with SQL
HRMS.

Modules:

E TIME ATTENDANCE E LEAVE E CLAIM E PAYROLL

4
 E Time Attendance

Clock in / out with geofence Overview of team attendance

technology

Track own attendance and Track late in, early out, absent,
overtime pay rate and out of office employees

Multiple work schedules Receive notification of

employees leaving workplace
On-site clock in for during working hours
travellers with site photos
Customizable overtime rules
by clock time / by tier rate

Set up flexible lunch hour and

flexible allowance

5
 E Leave

Easy leave application and Approval and notification

status checking

Daily employees leave

Leave entitled and leave summary
balance
View all leave application at
Unlimited years salary records
one glance in calendar mode

Detailed payslip info

Apply leave on-behalf

Multiple years EA form

Leave application status

6
 E Claim

Easy claim submission in Manager approval

mobile app

Graphical display of six months

Upload image file as proof of claim analysis by employees
claim

View claim status progress View current month claims

tracking
Get overlimit claims info
View categorized monthly
and annual claim history
Individually approve or bulk
View summarized pending approve claim application
and approved claim apps

7
 E Payroll

Just click Sync Cloud and you will be able to link all leaves that have been applied through the app into your SQL
Payroll Software. If your manager hasn’t approved the application, you can approve it on the software too.

Real-Time Data Access

Enhanced Accuracy

Time Savings

Data Visualization

Financial Overview

Compliance and Reporting

Error Detection and Correction

Tax Preparation

Performance Analysis
8
 Employer
Perspective
 Employer Perspective

To facilitate a successful configuration of your SQL Payroll system, please ensure that you have the following crucial
details prepared and accessible:

COMPANY NAME TIN NUMBER *

Provide the full name of the company Input the Tax Identification Number (TIN) for
your company (* This feature will be available
in a future release)

COMPANY INDUSTRY CODE

REGISTRATION NUMBER Enter the industry code that
Provide the official registration corresponds to your company, also
number of your company known as MSIC Codes

ADDRESS ATTENTION
Provide the complete address Enter the attention name of the in-
associated with your company charge person

9
 Employer Perspective

EPF TAX SOSCO HRDF OTHERS

Enter the Enter the TAX Fill in the SOCSO If the company is Enter the Officer’s
Employer's EPF details of the details of the HRDF registered and name, IC, job title,
details. It is crucial employer, and the employer. required to phone no. and
to ensure the most important part contribute, enter 1% email address, as
accuracy of the EPF is that the TAX The SOCSO Employer or 0.5%; otherwise, these are crucial for
Employer Number Employer No. Number is especially enter 0%. the EA Form
for EPF Borang A important

10
An Overview of employer’s responsibilities on

Statutory Contributions Employer’s Responsibilities Link for Reference

EPF is a retirement savings Register your employees as EPF members

plan for employees who Provide salary statements to employees KWSP Portal
are required to pay into it. Submit yours and your employee’s share of contribution

There are two options: Register your employees as SOSCO members

i) Workplace Injury Report all work-related accidents that behalf of your workers ASSIST Portal
Compensation Program Maintain a monthly record of employees’ information
ii) Scheme of Invalidity Submit yours and your employees’ share contribution

Except in limited
circumstances, EIS covers
Submit yours and your employee’s share of contribution
employees aged 18 to 60
who have their lost jobs.

11
 Statutory Contributions Employer’s Responsibilities Link for Reference

PCB is a series of monthly

deductions that go towards Deducts PCB from your employee’s monthly pay according LHDN Portal
payment of employees’ taxes to the Schedule of Monthly Tax Deductions or the
in relation to their Computerized Calculation Method
employment income

HRDF has a provision for levy

Register with HRD Corp to get support for your employee’s
payments to be taxed as
training and skill development HRDF Portal
allowable expenses under the
Income Tax Act 1967

As your company expands, managing statutory contributions for your employees can become cumbersome. It is important to choose a
payroll service provider to handle your employee’s EPF and SOSCO registration, salary disbursement, payroll taxes, and other statutory
contributions. With SQL Payroll, you can transform complex compliance tasks into a smooth, hassle-free experience, letting you focus on
what truly matters - growing your business.

12
 e-PCB Plus will replace the current PCB system ((e-PCB/e-CP39/e-Data
PCB) by bringing everything together on the MyTax portal.
Phase 1 launches on September 24, 2024

Employer/ Employer Representative/ PCB Administrator Role

Registration in MyTax
Registration of the role of Admistrator Representative in e-PCB Plus
Update employer/ employee information on e-PCB Plus

Users must log in to the MyTax portal using their individual ID and
password, then select the appropriate role to access e-PCB Plus. For
more details, please refer to the User Guide on MyTax.

*Note: The current e-PCB system will continue to operate as normal until an official closure
announcement is made.
13
EPF sosco EIS PCB HRDF

14
What payments are included in EPF? What payments are included in SOSCO?

Salary Service charges Salary Travelling Allowance

Bonus Overtime payment Pay leave Special Expense

(Claims)
Allowance Gratuity Overtime Gratuity

Commission Retirement benefits Extra Work on Holiday Benefits In Kind/VOLA

Wages for maternity/ Travelling allowance Allowance Other Remunation

study/ half day leave or the value of any
travelling concession Commission EPF
Director’s fee

15
What payments are included in EIS? What payments are included in PCB?

Salary Travelling Allowance Wages Employee’s share

option scheme (ESOS)
Pay Leave Special Expenses Overtime Payment Tax borne by the
(Claims)
employer
Overtime Gratuity Commission
Gratuity
Extra Work on Holiday Bonus Allowance Compensation for loss
of employment
Allowance Benefits In Kind/VOLA Bonus/ Incentive
Any other payment in
Other Remunation Director Fees addition to normal
Commission
remuneration for
Perquisite current month

16
What payments are included in HRDF?

Salary

FIxed Allowances

Neglecting any of these

deductions could lead to a steep
penalty, and you will be held
accountable for it.

So, stay sharp and keep

everything on track !

17
 EMPLOYER PERSPECTIVE
Payroll Calculation
Here are specific payroll calculation formulas for monthly employees based on government rules.
Use these formulas as a reference :

No. Type Formula

1 Basic Salary Basic Salary =

( Monthly Wages

Days In Month ) x Protate Days

2 Unpaid Leave/Absent
Deduction =
( Monthly Wages

Days In Month ) x Unpaid or Absent Days

In Conclusion :
The calculation formulas given are in accordance with the 2022 amendments to the Employment Act,
particularly the new section 18A.
These formulas are designed to ensure precise payroll calculations as per the latest regulations.

18
No. Type Formula

( )
Monthly Wages
3 Paid Leave Paid Leave = x Number of Days With
Number of Working Days Paid Leave

4 Overtime Overtime Pay =

( Monthly Wages
Number of Working Days x Working Hours Per Day ) x
Overtime
Rate
x
Overtime
Hours

In Conclusion :
The calculation formulas are based on Section 60I of the Employment Act 1955. In this framework :
The “Ordinary Rate of Pay” is defined as the wages outlined in Section 2 of the Act.
For monthly employees, this rate should be divided by 26 days to determine the daily rate.
The “Hourly Rate of Pay” is calculated by dividing the ordinary rate of pay by the standard number od work hours
specified in the Act.
These definitions and methods ensure that payroll processing adheres to the standards set by the Employment Act 1955.

19
 NOTE :
In the context of the provided calculation formulas, the
figures 8.0 or 7.5 represent the employee's normal work
hours.

According to the Employment Act Amendment of 2022, the

employee's weekly working hours have been reduced from
48 hours to 45 hours.

In cases where employees work for 6 days a week, their

daily working hours should be adjusted to 7.5 hours

The minimum wage for employees in Malaysia is currently set at

RM1,500.00 per month. Please ensure that your existing employees
meet this minimum wage requirement follow the Malaysian
Employment Act

20
 SQL Payroll
Leave Entitlement Calculation
Examples of how to calculate annual leave using SQL queries

SCENARIO 1 First Date Join SCENARIO 2 Middle Date Month Join

Employee Information: Employee Information:

Join Date: January 1, 2024 Join Date: June 15, 2024
Leave Entitlement: 8 days per year Leave Entitlement: 8 days per year
Leave Year: Calendar year (January 1 to December Leave Year: Calendar year (January 1 to December
31) 31)

How many days of leave this employee will be entitled to How many days of leave this employee will be entitled to
for the remainder of 2024? for the remainder of 2024?

Pro-rated leave =
( Days worked in partial year

Total Days in a Year ) x Annual Leave Entitlement

Pro-rated leave =
( Days worked in partial year

Total Days in a Year ) x Annual Leave Entitlement

( )
Days Work in Partial Year = 15(jun) + 31(July)+ 31(Aug)+30(Sept)+31(Oct)+30(Nov)+31(Dec) = 199
365
Pro-rated leave = x 8 days

( )
365 199
Pro-rated leave = x 8 days
365
= 8 days

= 4.36 days

Therefore, the employee is entitled to approximately 8 days of leave for the

Therefore, the employee is entitled to approximately 4.36 days of leave for
period from January 1 to December 31, 2024.
the period from June 15 to December 31, 2024.

* This calculation assumes a 365-day year and does not account for leap years or other adjustments.
21
 Payroll Calculation
OVERTIME RATE INFORMATION
This is an essential reference as it is defined in the Employment Act 1955, ensuring compliance
with legal standards for overtime pay.

No. Type Overtime Rate Note

1 Normal Working Days 1.5 Working more than normal hours

Where work does not exceed half his normal

0.5
hours of work

Where work is more than half but does not

2 Rest day 1.0 exceed normal work hours

2.0 Working more than normal working hours

Follow normal working hours

2.0
3 Public Holiday

3.0 Excess of normal hours

22
 Employer Perspective
SALARY PAYMENT DATE & PAYSLIP

NOTE :
For regular terminations,
employers are required to pay the
Timely salary payments are essential for employee's salary on the
employers, as mandated by the Employment termination date, ensuring
Act 1955, Part III, which governs the Payment compliance with legal standards
of Wages. This act stipulates that wages must for fair and prompt compensation.
be disbursed no later than the seventh day
after the end of the payroll period. Many
companies adhere to a payroll schedule that
aligns with the calendar month, typically
ensuring that salaries are paid by the 7th of
the subsequent month.

23
 BENEFITS OF DISTRUBUTING PAYSLIPS

EMPLOYEE EMPLOYER

Clarity on Earnings : Record-Keeping :

Payslips give employees a clear breakdown of their Payslips provide a detailed record of wages, deductions,
earnings, including basic salary, bonuses, deductions, and other financial information, which is essential for
and net pay, ensuring they understand how their pay is accurate bookkeeping and audits.
calculated. Employers are required to maintain employee records for
at least six years (though PERKESO and LHDN specify
Proof of Income : seven years). This is crucial for record-keeping and
Payslips serve as official proof of income, which can be compliance purposes.
used for loan applications, rental agreements, and other
financial matters. Trust and Communication :
Regularly distributing payslips fosters transparency and
Security and Peace of Mind : trust between employers and employees, promoting a
Regularly receiving payslips reassures employees that positive workplace culture.
their employer is transparent and adheres to legal
standards, contributing to job satisfaction and security.

24
 Monthly Government Report
DOCUMENT DESCRIPTION DEADLINE

On or before the 15th of the wages month 9

Upload to EPF portal or pay through bank (if the 15th is a public holiday, then the
EPF Borang A
submission deadline is extended to the next working
day)

Upload to SOCSO ASSIST portal or pay

No later than 15th day of the month for the
SOCSO Borang 8A through bank submission.
previous month’s contribution

(In 2023, PERKESO has introduced SOCSO

and SIP text file submissions, and both can
No later than the 15th day of the previous
EIS be combined into a single file for upload to
month’s contribution
the SOCSO ASSIST portal.)

On or before the 15th day of the subsequent

Use the e-PCB, e-Data PCB or e-CP39
Income tax cp 39 month (if the 15th is a holiday the deadline
applications on the IRBM’s Official Portal.
will be the last working day before the 15th)

Login e-Tris system through HRD Corp portal No later than the 15th day of the following
HRDF Form
and key in payment information month

*Take Note: SQL Payroll able to generate the txt file direct submit to kwsp/ though bank
25
 Yearly Government Report

DOCUMENT DESCRIPTION DEADLINE

By the 28th of February of the assessment

EA form A summary of the employee’s earning form
year.

Remuneration Statement for Government

EC form No later than 31st March
Employees.

For employers to check whether the sent

pre-filled data follows the specification set
e-Data Praisi by LHDNM or not. If the data fulfils the No later than 31st March every year
specification, employer can upload the data
to LHDNM.

No later than 3oth June every year

A form that allows the employer to all staff
Income tax CP8D (*grace period given 15th July for e-Filing )
particulars to LHDN

*Take Note: SQL Payroll able to generate the txt file to submit e-filling!

26
What is Benefits The Formula Method :

In Kind (BIK)? Annual Value of

=
Cost of the asset that is provided as
benefit/ amenity
the benefit
BIK are non-cash benefits provided by
Prescribed average life span of the asset
employers to their employees and are
treated as income of the employees
Here, cost means the actual cost incurred by the employer.
BIK are benefits not convertible into
money, even though they have The Prescribed Value Method:
monetary value The schedules for the standard values of commonly provided
employee benefits are shown in the table in page (next page )
“Non convertible into money” means
the benefit cannot be turned into cash, The value of BIK given to the employee can be reduced if it
either due to contract or the nature of meets certain conditions set by the employee:
the benefit itself. Provided for less than a year
Shared with another employee

27
 Prescribed Average Life Span (Years)

Prescribed Average Life Span

Asset Type of Assets
(Years)

1 Motorcar 8

Furniture and Fittings:

Curtains and carpets 5
2 Furniture, sewing machine 15
Air conditioner 8
Refrigerator 10

Kitchen equipment (e.g. crockery, rice cooker, electric kettle, toaster,

3 coffee maker, gas cooker, cooker hood, oven, dish washer, washing 6
machine, dryer, food processor etc.)

Entertainment:
Piano 20
4 Organ 10
TV, video recorder, CD/DVD player, stereo set 7
Swimming pool (detachable), sauna 15

5 Miscellaneous 5

28
 Prescribed Value Of
Household Furnishing, Apparatus and Appliances

Annual Prescribed Value Of BIK

Category Type of Benefit Provided
(RM)

Semi-furnished with furniture in the lounge, dining room or

1 840
bedroom

Semi-furnished with furniture as in Column 1 and one or two

of the following:
2 Air conditioners 1,680
Curtains and alike
Carpets

Fully furnished with benefits as in Column 1 and 2 as above

3 plus one or more of kitchen equipment, crockery, utensils and 3,360
appliances.

Service charges and bills paid by the

4 Services charges and other bills such as water and electricity
employer

29
 Prescribed Value Of Other Benefits

Item Type of Benefit Value of BIK Per Year

a) Hardware: RM300 per telephone

b) Bills:
i. Telephone is subscribed and paid by the employer
The benefit is taxed under paragraph 13(1)(b) of the ITA 1967.
a) Before the year The prescribed value is RM300 per telephone.
of assessment When the formula method is used, the value of the benefit is the
2008 actual cost of the private bills paid by the employer.

1 Telephone (including ii. Telephone is subscribed by the employee and by employee

mobile phone) The benefit is taxed under paragraph 13(1)(a) of the ITA 1967.
The benefit to be taxed is the amount of the actual bills paid by
the employer.

b) From the year

i. Hardware - fully exempt
of assessment
ii. Bills - fully exempt
2008

30
 Prescribed Value Of Other Benefits

Item Type of Benefit Value of BIK Per Year

2 Gardener RM3,600 per gardener

3 Household servant RM4,800 per servant

Tax treatment on the benefit received on the employee as follows:

i. Entrance fee for club membership - taxed under paragraph 13(1)(a)
a) Individual membership - of the ITA 1967.
Membership subscription ii. Monthly/annual membership subscription fees for club
paid or reimbursed by membership - taxed under paragraph 13(1)(a) of the ITA 1967.
employer iii. Term membership - is taxed on the amount of payment made
under paragraph 13(1)(a) of the ITA 1967.
Recreational club
4
membership

Tax treatment on the benefit received on the employee as follows:

i. Entrance fee - not taxable
b) Corporate membership
ii. Monthly/annual membership subscription fees for club
- Membership subscription
membership - taxed on the prescribed value under paragraph on the
paid by employer
prescribed value under paragraph 13(1)(a) of the ITA 1967.

31
 3 4
Dental Benefit Child-care benefit

I O N
P T
Discounted price for M
2 5

E
consumable business Insurance premiums

EX
products of the which are obligatory for
employer and foreign workers as a

TAX
discounted price for replacement to SOSCO
services provided by the contributions
employer

ON
Food and drink 1 K
BI 6 Free transportation
between pick-up
provided free of points or home and
charge place of work (to and
from)

Group insurance premium 8 7 Provision of necessary

work equipment, such
to cover workers in the
as computers or tools
event of an accident

32
 (Value of Living Accommodation)

When an employer provides free housing to an employee, this is considered a taxable benefit. The value of
this benefit, which is the worth of the free housing, must be included in the employee's gross income for tax
purposes. This applies to any living accommodation provided in Malaysia, including housing in buildings
owned by the employer.

Category 1:
Living accommodation provided
for employee or service director Service Director represents director who is employed
in the service of the company in a managerial or
technical capacity and does not hold more than 5% of
the ordinary share capital of the company.

The computation for VOLA is either the below

whichever lesser:
i. Defined value of VOLA or
ii. 30% of the gross income from employment under
Para 13(1)(a) of the ITA (exclude ESOS)

33
 Category 2:
Living accommodation provided for
directors of controlled companies
Director includes:
a. A manager of the company
b. Remunerated out of the funds of that business
c. A beneficial owner of 20% or more of the ordinary share
capital of the company

The computation of VOLA will be the defined value of

the living accommodation

Category 3:
Hostel living accommodation for
employee or service director Where the living accommodation provided for
employee or service director, is:
a. in a hotel, hostel or similar premises
b. any premises in plantation or in a forest
c. any premises which although in rateable area are not
subject to rates

The amount to be taken into account as VOLA is:

An amount equal to 3% of the gross income under Para
13(1)(a) of the ITA (Exclude ESOS)

34
 Credit Bank
Report
Make salary payments via electronic
submissions. More than 25 Malaysia banks
including Maybank, Hong Leong Bank, CIMB
Bank, Public Bank can be used to perform
bank giro on SQL Payroll Malaysia software.

35
 Employee
Perspective
 Employee Perspective

In order to ensure precise payroll processing and adherence to regulations, employers

should gather the following key information from employees:

EMERGENCY BANK
CONTACT ACCOUNT
INFORMATION DETAILS
PERSONAL
Name MARITAL STATUS AND Bank Name STATUTORY BODY
IDENTIFICATION Relationships
Contact details FAMILY INFORMATION Bank Account Number
INFORMATION Routing number MEMBERSHIP
Legal marital status
Full Name Spouse/ Dependent information:
NUMBERS
Birth of Date - Full Name Income tax number
NRIC/ Passport - NRIC EPF number
Work Permit - Employment status SOSCO number
Current Address - Health status EIS number
Contact Number - Number of tax deductible
Email Address person
36
 Employee are encouraged to proactively gather and input essential employees’
details into SQL Payroll system. This proactive mesure guarantees precise and
compliant payroll management, optimizes worksflow efficiency, and migitates risks
related to missing or outdated data.

By taking these steps, employers can ensure smooth payroll operations and
prevent potential issues before they arise.

37
 ONBOARDING TIPS FOR NEW JOINER
Access setup:
HR needs to ensure that all
necessary systems, software, and
accounts are set up and accessible.
1
Workspace preparation:
HR needs to ensure that all
necessary equipment or company
Employment Pre-start assets are prepared.
Documentation Preparation
2
3
HR ensures that offer letter and employment
contract outline compensation details,
including salary, pay frequency, and any Orientation session:
bonuses or benefits. HR conducts a structured orientation to Governmental
familiarize the new employee with company’s Requirements
HR prepares and sends necessary tax forms to culture, values, and procedures.
be completed by the new employee.
New employee shall submit TP3
Support and resources: Form to his/her employer to notify
HR sets up the new employee’s profile in HR ensures new employee knows where to find information relating to his
payroll system. additional resources such as HR contacts, employment with previous
internal knowledge bases, and training employer in the current year.
materials.

38
 EPF - Employees Provident Fund Contribution

Employee’s EPF Employer’s EPF

Employee’s Status
Contribution Rate Contribution Rate

RM 5,000 More than RM 5,000 More than

Monthly Salary Rate
and below RM 5,000 and below RM 5,000

Malaysian 11 % 13 % 12 %
Below Age 60
Malaysian Age 60
0% 4%
and Above
Permanent Resident
5.5 % 6.5 % 6%
Age 60 and Above
Permanent Resident
11 % 13 % 12 %
Below Age 60
Non-Malaysian Age
5.5 % RM 5.00
60 and Above
Non-Malaysian
11 % RM 5.00
Below Age 60

39
 SOSCO - Social Security Organization

Employee’s Status SOCSO Category

Age Below 60 Employment Injury Scheme and Invalidity (Category 1)

Age 60 and Above Employment Injury Scheme (Category 2)

Foreign Workers Employment Injury Scheme (Category 2)

Malaysian employee’s SOCSO account number is the same as their NRIC.

Non-Malaysians need assistance from employers to obtain a 12-digit SOCSO account number.

As of October 1, 2024, the salary cap for SOSCO contributions has been increased from RM5,000 to RM6,000. The
contribution rates for the scheme are based on an employee’ monthly wages. An employee only contributes 0.5% of
their monthly salary, whereas an employer contributes 1.25% of the employee’s monthly wage.

https://perkeso.gov.my/en/our-services/employer-employee/kadar-caruman.html
40
 EIS- Employment Insurance System

Employee’s EIS Employer’s EIS

Employee’s Status
Contribution Rate Contribution Rate

Age Below 60 0.2 % 0.2 %

Age 60 and Above 0% 0%

All legal foreign workers will be covered by Employment Injury (EI)

Scheme under Act 4 and not Employment Insurance System (EIS)
Foreign Workers
under the Employment Insurance System Act 2017 (Act 800)

The contribution rate for Employment Insurance System (EIS) is 0.2% for the employer and 0.2% for employee based on the
employee’s monthly salary. To view the full contribution rate, may visit https://www.kwsp.gov.my/documents/d/guest/jadual-
ketiga-bi-pdf-1?preview
41
 PCB - Potongan Cukai Bulanan (Income Tax)

Tax Residence Status :

Based on time spent in Malaysia, not nationality.

A Malaysian living and working overseas can be a non-resident.

No Tax If : Exceptions :
You spend 60 days or less in Malaysia
Your stay is a continuous period (≤ 60 days) overlapping two Non-resident directors of Malaysian companies
years Public entertainers
The continuous period (≤ 60 days) overlaps two years with
additional periods totaling ≤ 60 days

Tax Rate :
Residents: Non-Residents:
Graduated rates: 0% to 30% based on income Flat rate of 30%
Eligible for personal and familty tax reliefs No tax reliefs, available but exemptions on certain allowances
apply

42
 PCB (Monthly Tax Deductions) :

Applicable to both residents and non-residents

Deducted if income exceeds the PCB minimum threshold

Return Expert Program :

Offers tax incentives for Malaysian professionals returning from abroad.

Knowledge Worker (Iskandar) :

Incentives for knowledge workers in the Iskandar Malaysia region.

Position of C Suite :

Taxed at the rate of 15% on income from employment with a company that has been granted a relocation tax incentive under the
PENJANA incentive.

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 HRDF - Human Resources Development Fund

Employee’s HRDF Employer’s HRDF

Employee’s Status
Contribution Rate Contribution Rate

1%
Malaysian 0% (Compulsory if have more than
10 Malaysian employees)

0.5%
(Optional if have 5-9 Malaysian
employees)

Non-Malaysian 0% 0.2 %

Failure of payment before the stipulated time will result in:

Fine not exceeding RM20, 000.00 (Ringgit Malaysia Twenty Thousand) or imprisonment for a term not exceeding two (2) years
or both (on conviction).
Yearly interest of 10 per cent in respect of each day of default or delay in payment.

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 Leave Entitlement & Public Holiday

The Employment Act 1955 outlines mandatory leave types that employers must adhere to under
Malaysian law to prevent legal issues. Additionally, there are optional leave types that many
organizations provide to enhance employee well-being and satisfaction.

compulsory leave

Category Full-Time Employee Part-Time Employee

1 rest day
Rest Day 1 rest day
(if work > 5 days, or <= 20 hours per week)

8 days for < 2 years 6 days for 1-2 years

Annual Leave 12 days for 2-5 years 8 days for 2-5 years
16 days for 5+ years 11 days for 5+ years

14 days for < 2 years 10 days for 1-2 years

Sick Leave 18 days for 2-5 years 13 days for 2-5 years
22 days for 5+ years 15 days for 5+ years

Hospitalization
60 days Not Entitled
Leave

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 Leave Entitlement & Public Holiday

Category Full-Time Employee Part-Time Employee

Maternity
98 consecutive days Not Entitled
Leave

Paternity Leave 7 consecutive days Not Entitled

Entitle 11 public holidays, and include 5 gazetted

public holidays Entitle 7 public holidays, and include 4 gazetted public
National Day holidays
Yang di-Pertuan Agong’s Birthday National Day
Public Holidays
State Ruler’s or Yang di-Pertua Negeri’s Birthday Birthday of the Yang di-Pertuan Agong
or Federal Territory Day Birthday of the state Ruler or Federal Territory Day
Workers’ Day Worker’s Day
Malaysia Day

46
 Leave Entitlement & Public Holiday

Category Full-Time Employee Part-Time Employee

Unpaid Leave Optional Optional

Emergency Leave Optional (2 - 3 days) Optional (2 - 3 days)

Compassionate Leave Optional (2 - 5 days) Optional (2 - 5 days)

Marriage Leave Optional Optional

Replacement Leave Optional Optional

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 Working Hours

To classify employment as full-time or part-time, refer to the Employment Act 1955. The Act sets the
criteria for standard working hours, overtime, and entitlements, ensuring both employees and
employers adhere to legal standards.

CATEGORY FULL-TIME EMPLOYEE PART-TIME EMPLOYEE

Max 8 hours/day
<30 hours/week
Working Hours Max 45 hours/week
<70% full-time hours
Total daily work including breaks: max 10 hours

Overtime paid at normal hourly rate if less than

Overtime beyond 8 hours/day or 45 hours/week
Overtime full-time hours.
Must be paid at least 1.5 times the hourly wage.
1.5 times hourly rate if exceeding full-time hours

Maximum Up to 104 hours/month, max 12 hours/day Up to 104 hours/month, max 12 hours/day

Overtime including overtime. including overtime.

Break 30-min unpaid break after 5 hrs. 30-min unpaid break after 5 hrs.

Entitled to a rest day if working 5 days or more,

Weekly Rest Day Entitled to 1 rest day per week
or at least 20 hours per week.

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 Allowance Tax Exemption Rules

PETROL (DUTIES) PARKING MEAL CHILDCARE

If an employee receives more Parking rate and parking Meal allowances for The tax exemption for child
than RM6000 a year for allowance. This includes overtime, outstation, or care allowances for children
petrol, travel, or toll expenses, parking rate paid by the overseas trips are only up to 12 years old is now
they can deduct the amount employer directly to the exempt if they follow the RM3000 per year, whether
spent on official duties. parking operator. rates specified in the received by the employee or
Records of these expenses employer's internal circular or paid directly to the child care
and deductions must be kept written instructions. center by the employer.
for 7 years for audit purposes.

Max Value: RM6,000 Max Value: No limit Max Value: No limit Max Value: RM3,000

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 Allowance Tax Exemption Rules

PHONE PHONE BILLS AWARD LOAN INTEREST EDUCATIONAL

LOAN

Gift of fixed line telephone, Monthly bills for subscription Perquisites given to an Subsidised interest for Educational loan of the
mobile phone, pager or of broadband, fixed line employee, such as past housing, education or car loan Perbadanan Tabung
Personal Digital Assistant telephone, mobile phone, achievement awards, service is fully exempted from tax if Pendidikan Tinggi Nasional
(PDA) registered in the name pager and PDA registered in excellence awards, innovation the total amount of loan taken (PTPTN) paid by an
of the employee or employer the name of employee or awards, productivity awards, in aggregate does not exceed employee who is a Malaysian
including cost of registration employer including cost of or long service awards, are RM300,000. citizen, works full-time and
and installation registration and installation considered taxable if the not his relative, from the
year of assessment 2019
employee has worked for the
until 2021
same employer for over 10
years.

Max Value: No limit Max Value: No limit Max Value: RM2,000 Max Value: No Limit Max Value: No Limit

For more detailed information visit the link : http://lampiran1.hasil.gov.my/pdf/pdfam/Notes_PartF_2.pdf

50
 Conclusion
We hope this guide has equipped you with the essential insights and tools to efficiently manage your payroll
processes using SQL Payroll software. By offering a robust platform that simplifies payroll management,
streamlines statutory compliance, and automates critical HR tasks, SQL Payroll empowers businesses to
focus on growth rather than administrative burdens.

With its user-friendly interface, real-time reporting, and integration capabilities, SQL Payroll ensures
accuracy and efficiency in managing employee compensation and statutory obligations. As you continue to
leverage this software, we encourage you to explore its full potential to enhance your payroll operations.

Thank you for choosing SQL Payroll as your trusted payroll management solution. We believe it will greatly
contribute to the success of your HR and payroll strategies, ensuring that your business stays compliant,
efficient, and forward-looking.

Disclaimer
The information provided in this guide is for general informational purposes only and may be subject to
change without prior notice. While every effort has been made to ensure the accuracy and completeness
of the content, users are encouraged to verify details and consult with professionals or relevant
authorities for the most current information. The software features described may vary depending on the
version and implementation.

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Last update : 09/10/2024 51