It is mandatory for employers to comply with the minimum wage requirement which is applicable in the Peninsular Malaysia and East Malaysia, with different applicable rates. Employers also need to apply the relevant fixed rates to overtime entitlement when employees work beyond normal work hours, rest days, and on public holidays.
Statutory and Tax Deductions
It is the duty of the employer to make compulsory statutory deductions. This includes Employees Provident Fund, Social Security Organisation, Employment Insurance Scheme, and Monthly Tax Deduction. There are also other optional deductions, such as Human Resource Development Fund and the voluntary Zakat contribution.
Leave and Benefits Entitlement
Employees are granted different types of leave entitlement as part of their employment benefits. The Malaysia Employment Act offers guidelines on the various leave entitlements. Employers may use these guidelines to outline leave and benefit entitlements for their employees. Leave entitlement is also a key component in payroll when employees resign.
On top of annual leave are the other leave types, such as sick leave, hospitalisation leave, maternity leave, and public holidays, which are equally important.
This article serves as general information only.
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