Understanding the payroll process is key to starting a business in Malaysia. You will need to understand the statutory deductions and contributions that not only each employee has to make, but the employer as well.
It can be quite tricky for a beginner, but once you get the basics of Malaysian payroll down, its fairly straightforward. Employee wage regulations are set by the Ministry of Human Resources and the Ministry of Finance. Most statutory requirements are set out in the Employment Act 1955, with income tax governed by the Income Tax Act 1967.
The most important thing to know before starting payroll is deciding on pay day. Salaries must be paid no later than the seventh day of the following month. Most companies typically have pay day on the last day of the month, but some do pay salaries slightly earlier, for example on the 26th to 28th of the month to avoid clashing with holidays and weekends.
Malaysia also mandates an eight-hour workday with an average working week of no longer than 48 hours and one day off per week. Employees are also entitled to 11 gazetted public holidays per year. Overtime pay is not mandated under Malaysian law if the employee’s salary exceeds RM2,000 a month, but is otherwise:
The statutory deductions and contributions are essential to running payroll in Malaysia. These items will typically appear on the employee’s payslip.
For employers, these deductions and contributions must be paid to each relevant statutory body not later than the 15th of the following month.
You will also need to know what category of employment your employees fall under. This will affect what statutory deductions they are required to make, as well as statutory contributions they are entitled to.
Of course, you will need to collect all relevant employee information in order to pay them accurately. This will normally include:
If you’re looking to automate payroll for your business, BrioHR helps you get started in a fuss-free, user-friendly way. BrioHR’s payroll function can even integrate seamlessly into your existing system, and is LHDN-approved.
BrioHR’s all-in-one, cloud-based solution with nine powerful modules automates repetitive tasks and empowers HR in a user-friendly interface. This enables business owners and HR teams to truly focus on what matters most – people.
Visit briohr.com and get a free demo now.
Understanding the payroll process is key to starting a business in Malaysia. You will need to understand the statutory deductions and contributions that not only each employee has to make, but the employer as well.
It can be quite tricky for a beginner, but once you get the basics of Malaysian payroll down, its fairly straightforward. Employee wage regulations are set by the Ministry of Human Resources and the Ministry of Finance. Most statutory requirements are set out in the Employment Act 1955, with income tax governed by the Income Tax Act 1967.
The most important thing to know before starting payroll is deciding on pay day. Salaries must be paid no later than the seventh day of the following month. Most companies typically have pay day on the last day of the month, but some do pay salaries slightly earlier, for example on the 26th to 28th of the month to avoid clashing with holidays and weekends.
Malaysia also mandates an eight-hour workday with an average working week of no longer than 48 hours and one day off per week. Employees are also entitled to 11 gazetted public holidays per year. Overtime pay is not mandated under Malaysian law if the employee’s salary exceeds RM2,000 a month, but is otherwise:
The statutory deductions and contributions are essential to running payroll in Malaysia. These items will typically appear on the employee’s payslip.
For employers, these deductions and contributions must be paid to each relevant statutory body not later than the 15th of the following month.
You will also need to know what category of employment your employees fall under. This will affect what statutory deductions they are required to make, as well as statutory contributions they are entitled to.
Of course, you will need to collect all relevant employee information in order to pay them accurately. This will normally include:
If you’re looking to automate payroll for your business, BrioHR helps you get started in a fuss-free, user-friendly way. BrioHR’s payroll function can even integrate seamlessly into your existing system.
BrioHR’s all-in-one, cloud-based solution with nine powerful modules automates repetitive tasks and empowers HR in a user-friendly interface. This enables business owners and HR teams to truly focus on what matters most – people. Visit briohr.com and get a free demo now.