Payroll Guide: What Do You Need to know about Malaysian Payroll (Part 2)

Updated: Jul 23

#NairenonTeam understands payroll calculation can be a bit tricky, especially with the constant updates during this fluctuating time. Hence, we are starting a Payroll Guide Series! This is the second article that provides an overlook of Malaysian Payroll. Check out part 1 of the article here.


Allowances or Other Pay Elements

Other than the statutory requirements, there are also other pay elements regulated by the EA 1955. And for the sake of your eye strains and our brain cells, we will only be touching a couple of them in this article (Subscribe to our newsletter to be the first to know about our future releases).


Overtime

Now, according to EA 1955, employees shall not be required to work more than ten (10) hours in a day or 48 hours within a week, with a minimum of one (1) rest day in a week. In the case that employees are required to work more than what was mentioned, employers then shall compensate them accordingly.


Similarly, employers are also required to provide compensation when employees are required to work on a Public Holiday. We have the details summarized in the table below.



Still find it confusing? Let us help you.

Other Deductions

There are also other types of payroll deductions that are not required by the law yet are Processed by Malaysian Employers, such as PerbadananTabung Pendidikan Tinggi Nasional, Zakat, Human Resources Development Fund, and many others. Most of these pay element is managed by Government Agencies or initiated by the Government, however, employers and employees have the options on whether to partake in it as well as the contributions. Here is a summary of what they are.




Other Common Allowances

Any other allowance or ad-hoc remuneration that are common in the Malaysian market are:-


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