Payroll Statutory
Payroll Statutory
Malaysia has its own set of labour laws and rules that companies need to comply with. Companies are required to keep up to date with all the labour regulations within the state.
It is also mandatory for companies to adhere to them. When a company is in non-compliant with these regulations, it can get into legal troubles such as incurring penalties and fines. That is why every company invests a huge amount of money, effort and time to meet compliance requirements from professional tax to minimum wages act.
To help with this, the company seeks expert advice from labour law and taxation law experts. In order to manage with the demanding regulatory environment, every company should be well-versed and take note of all regulations in the country’s labour laws.
- Ensures fair treatment towards the employee.
- Ensures they are paid fairly for the work they have done and their company complies with the minimum wage rate.
- Prevents employees from being forced to work for long hours or under inhumane conditions.
- Avoids penalty or fines because of their timely payments.
- Protects the organization from unreasonable wage or benefit demands from trade unions.
- Prevents legal troubles as the company is fully compliant.
- Mitigates risks and increases awareness about compliance.
- With compliance in place, there is a lower risk of an adverse incident.
InTune Outsourcing provides services on statutory compliance management; our consultants have a deep understanding of the regulatory settings and provide specialized services to organizations. The compliance process for different operations are streamlined, from the day-to-day maintenance of prescribed forms and registers to the filing along with reports.
Malaysia has its own set of labour laws and rules that companies need to comply with. Companies are required to keep up to date with all the labour regulations within the state.
It is also mandatory for companies to adhere to them. When a company is in non-compliant with these regulations, it can get into legal troubles such as incurring penalties and fines. That is why every company invests a huge amount of money, effort and time to meet compliance requirements from professional tax to minimum wages act.
To help with this, the company seeks expert advice from labour law and taxation law experts. In order to manage with the demanding regulatory environment, every company should be well-versed and take note of all regulations in the country’s labour laws.
- Ensures fair treatment towards the employee.
- Ensures they are paid fairly for the work they have done and their company complies with the minimum wage rate.
- Prevents employees from being forced to work for long hours or under inhumane conditions.
- Avoids penalty or fines because of their timely payments.
- Protects the organization from unreasonable wage or benefit demands from trade unions.
- Prevents legal troubles as the company is fully compliant.
- Mitigates risks and increases awareness about compliance.
- With compliance in place, there is a lower risk of an adverse incident.
InTune Outsourcing provides services on statutory compliance management; our consultants have a deep understanding of the regulatory settings and provide specialized services to organizations. The compliance process for different operations are streamlined, from the day-to-day maintenance of prescribed forms and registers to the filing along with reports.
Employees Provident Fund
Employees Provident Fund
This fund is intended to help employees from the private sector save a fraction of their salary in a lifetime banking scheme to be used primarily as a retirement fund. It may also be utilized in the event that the employee is temporarily or no longer fit to work. Furthermore, it provides a framework for employers to meet legal and moral obligations to their employees.
This fund may be used as investments by the employee for companies deemed profitable and permissible by the organization, from which dividends are banked to respective members' accounts. Additionally, workers may opt to utilize their EPF savings in their own investments, although such activities are not covered by the EPF and the members are to bear any losses made.
This fund is intended to help employees from the private sector save a fraction of their salary in a lifetime banking scheme to be used primarily as a retirement fund. It may also be utilized in the event that the employee is temporarily or no longer fit to work. Furthermore, it provides a framework for employers to meet legal and moral obligations to their employees.
This fund may be used as investments by the employee for companies deemed profitable and permissible by the organization, from which dividends are banked to respective members' accounts. Additionally, workers may opt to utilize their EPF savings in their own investments, although such activities are not covered by the EPF and the members are to bear any losses made.
Social Security Organization (SOCSO)
Social Security Organization (SOCSO)
The Social Security Organization regulates two social security schemes for workers earning salaries not exceeding RM 4,000 per month (with amendments effective 1 Jun 2016 under government guidance). If employees get covered once, they will remain covered irrespective of their wages. The maximum contribution, however, will remain to be based on wages of RM 4,000 per month.
The SOCSO Act has mainly two schemes:
- The Employment Injury Scheme which provides social insurance coverage against workplace accidents, occupational diseases and commuting accidents to and from place of work.
- The Invalidity Pension Scheme which provides 24-hour coverage against invalidity arising from any cause and not necessarily related to work environment.
These arrangements guarantee workers entitlement to medical benefits; temporary and permanent disablement benefits; constant attendance allowance; dependent’s benefit or survivors’ pension; funeral, rehabilitation, education benefits; invalidity pension and additional benefits.
All Malaysian employees including permanent residence who have been employed by an employer or a big entity under a contract of service or apprenticeship are liable under SOCSO’s act.
Categories of employees exempted from SOCSO’s coverage are:
- Federal and State Government Employees (except employees who are employed as temporary or contract employees. They are liable under the Act effective from 1 June 2013)
- Domestic servants
- Self-employed
- Spouse of a sole proprietor or partners
- Foreign workers (since 1 April 1993)
The Social Security Organization regulates two social security schemes for workers earning salaries not exceeding RM 4,000 per month (with amendments effective 1 Jun 2016 under government guidance). If employees get covered once, they will remain covered irrespective of their wages. The maximum contribution, however, will remain to be based on wages of RM 4,000 per month.
The SOCSO Act has mainly two schemes:
- The Employment Injury Scheme which provides social insurance coverage against workplace accidents, occupational diseases and commuting accidents to and from place of work.
- The Invalidity Pension Scheme which provides 24-hour coverage against invalidity arising from any cause and not necessarily related to work environment.
These arrangements guarantee workers entitlement to medical benefits; temporary and permanent disablement benefits; constant attendance allowance; dependent’s benefit or survivors’ pension; funeral, rehabilitation, education benefits; invalidity pension and additional benefits.
All Malaysian employees including permanent residence who have been employed by an employer or a big entity under a contract of service or apprenticeship are liable under SOCSO’s act.
Categories of employees exempted from SOCSO’s coverage are:
- Federal and State Government Employees (except employees who are employed as temporary or contract employees. They are liable under the Act effective from 1 June 2013)
- Domestic servants
- Self-employed
- Spouse of a sole proprietor or partners
- Foreign workers (since 1 April 1993)
Employment Insurance System (EIS)
Employment Insurance System (EIS)
EIS Coverage
- Private sector employers are required to pay monthly contributions for each of their employees. (Government employees, domestic workers and the self-employed are exempted).
- The definition of an employee is a person who is employed for wages under a contract of service or apprenticeship with an employer. The apprenticeship or contract of service may be expressed or implied and may be oral or in writing.
- All workers who are Malaysian citizens / permanent residents are covered by EIS.
- All workers aged 18 to 60 are required to contribute. However, workers aged 57 and above who have no prior contributions before the age of 57 are exempted.
- Rates of contribution are capped at insured salary of RM 4000.00.
There are Five Types of Monetary Benefits:
- Job Search Allowance (SE)
- Reduced Income Allowance (RIA)
- Training Fee (TF)
- Training Allowance (TA)
- Early Re-Employment Allowance (ERA)
EIS Coverage
- Private sector employers are required to pay monthly contributions for each of their employees. (Government employees, domestic workers and the self-employed are exempted).
- The definition of an employee is a person who is employed for wages under a contract of service or apprenticeship with an employer. The apprenticeship or contract of service may be expressed or implied and may be oral or in writing.
- All workers who are Malaysian citizens / permanent residents are covered by EIS.
- All workers aged 18 to 60 are required to contribute. However, workers aged 57 and above who have no prior contributions before the age of 57 are exempted.
- Rates of contribution are capped at insured salary of RM 4000.00.
There are Five Types of Monetary Benefits:
- Job Search Allowance (SE)
- Reduced Income Allowance (RIA)
- Training Fee (TF)
- Training Allowance (TA)
- Early Re-Employment Allowance (ERA)
Human Resources Development Fund (HRDF)
Human Resources Development Fund (HRDF)
There are few rules of DOs & DON’Ts for EPF/SOCSO/HRDF contributions and Monthly Tax Deductions (MTD) submissions
- Must be paid by 15th of the following month or the immediately preceding day if it falls on a weekend or Public Holiday.
- Advisable to include a reasonable time frame for payment clearance. Otherwise any subsequent payments after the deadline due to payment(s) returned (which is to be included in any form of financial reporting the company follows) will be subjected to late payment penalty.
If you’re looking for an accounting firm whose consultants are fully-trained to meet statutory compliance, call or email us today and find out how InTune can help you.
There are few rules of DOs & DON’Ts for EPF/SOCSO/HRDF contributions and Monthly Tax Deductions (MTD) submissions
- Must be paid by 15th of the following month or the immediately preceding day if it falls on a weekend or Public Holiday.
- Advisable to include a reasonable time frame for payment clearance. Otherwise any subsequent payments after the deadline due to payment(s) returned (which is to be included in any form of financial reporting the company follows) will be subjected to late payment penalty.
If you’re looking for an accounting firm whose consultants are fully-trained to meet statutory compliance, call or email us today and find out how InTune can help you.
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InTune Outsourcing was founded in 2007 as an outsourcing and business consultancy firm geared to the needs of small and medium sized enterprises.
About InTune Outsourcing Services
Quick Link
InTune Outsourcing was founded in 2007 as an outsourcing and business consultancy firm geared to the needs of small and medium sized enterprises.
Best SME Accounting & HR Consulting Firm
Social Media
About InTune Outsourcing Services
InTune Outsourcing was founded in 2007 as an outsourcing and business consultancy firm geared to the needs of small and medium sized enterprises.