Malaysia - Payslip

In this article, we will cover:

• Sample Payslip
• Earnings
• Employee Deductions 
• Employer Contributions 

SAMPLE PAYSLIP (This format will go live from September salary)

EARNINGS

1. Salary: This is the gross amount stated on your appointment letter before any deductions.
2. Bonus: Generally subject to taxation for employees in Malaysia. Bonuses are considered part of an employee's total income and are subject to individual income tax. The income tax rate for bonuses is determined based on the employee's total annual income, which includes both their regular salary and any bonuses received.
3. Traveling allowance: Allowance, transport, medical, etc are parts of the benefits.
4. Commission: Generally considered part of taxable income and are subject to individual income tax. Commissions are treated as income and are subject to taxation according to Malaysia's progressive tax rates.

EMPLOYEE DEDUCTIONS

1. PTPTN Repayment: Repayment of Perbadanan Tabung Pendidikan Tinggi Nasional, a government institution providing study loans for Malaysian students to fund their local higher education. Please see the Malaysia government page to read some more information.
2. EPF (Employees’ Provident Fund): Compulsory savings kept by the government for an employee’s retirement. 9% out of your salary will be deducted and contributed into your KWSP. Please visit the EPF official page for the full details.
3. SOCSO (Social Security Organisation. Pertubuhan Keselamatan Sosial, or Perkeso in Malay): The Malaysian employee insurance that covers all employees in the private sector in case of workplace injuries, emergencies, occupational illness, and death. Both the employer and employee contribute to Socso, and the employee contribution is 0.5% deducted from the salary. The money goes into the Employment Injury Insurance Scheme and the Invalidity Pension Scheme.
4. EIS (Employment Insurance Scheme): A financial policy aimed at helping employees who have lost their jobs. It will pay you a certain percentage of your last salary for up to 6 months if you were ever to lose your job or had to leave your job voluntarily for your own safety. Employees in the private sector have to pay 0.2% of their monthly salary. The capped salary that is being covered for this insurance is RM 4,000. Please see the Benefit Calculator to see the schedule and the calculation.
5. Income Tax: Monthly income tax deduction is called PCB (Potongan Cukai Bulanan). A certain amount of employees’ salaries are deducted every month depending on which tax bracket the employee is in and paid over to Inland Revenue Board (LHDN). This monthly deduction is more convenient and less ‘painful’ than having to pay a lump sum at the end of the year.Please visit the Malaysia government page to view the tax rate table.

EMPLOYER CONTRIBUTIONS

1. EPF (Employees’ Provident Fund): Customers have to contribute 12% to 13%.
2. SOCSO: Customer contribution is 1.75% to the insurance scheme.
3. EIS: Customer contribution is 0.2%
4. HRDF (Human Resources Development Fund): A special fund that all employers must pay for their employees’ training. The purpose is to enable employee training and skills upgrading of the Malaysian workforce.