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LHDN 2009 - Relief deduction handling in UBS Payroll
Author: Susan Lai Reference Number: AA-01147 Views: 9102 Created: 2014-05-12 08:07 Last Updated: 2014-05-12 08:07 0 Rating/ Voters

Scenario:

Introduction

UBS Payroll application is meant to provide a simple and easy- to-use function to generate monthly payroll for paying wages, taxes, accumulating and paying benefits, making corrections to the employe&s pay and/or benefits, generating mandatory/gazetted reports, and other miscellaneous
aspects of payroll.

This document is to illustrate the features and functions built in UBS Payroll application to meet the Malaysia Income Tax 2009 objective; which is:

To ensure STD paid is same or near to the actual tax amount (final tax)

The Malaysia Income Tax 2009 included the following proposals:

i.  To allow Employee to claim reduction or rebate allowed under Income Tax Act 1967 (Act) for the purpose to determine monthly STD amount.
ii.  Employer and Employee have the choice to remit STD for Benefit In Kind (BIK) and household benefit.

Prerequisite: -

• Successful installation of the UBS Payroll system

Solution:

1.  Settings

1.1.  Company Setting

1.  Go to [Housekeeping > Setup > Parameter Setup]


2.  Click on ‘Company Details’ tab, enter the company name and particulars in the ‘Company’ section.

3.  In the ‘Month’ section, set the correct month and year for:
     a. applying PCB 2009 function.
     b. this month and year payroll generation and report.

     Important notes on the introduction of this new setting for “PCB 2009 Start Apply Month”:

     3.1.  Conditions applicable for this new setting:
             a. This new setting is applicable for existing users who upgrade from previous UBS Payroll version. They are required to set which period to apply the PCB 2009 function.
             b. For new users, the default value will be “2” as the first version of UBS Payroll with PCB 2009 function was released in February 2009.
             c. The value set here cannot be more than the payroll month.
             d. This setting will automatically be nullified when the Payroll year is changed to 2010 onwards.

     3.2.  Function Objective
             This setting will make the required adjustment during PCB calculation for K value when employee has EPF contribution exceeding RM500.00. In the former PCB 2004, the K value is capped at RM500.00 per month.

4.  In the ‘Payroll Manager’ section, maintain the payroll manager’s information. This is important when generating EPF, SOCSO and Income Tax reports.

5.  Click on <Apply> button to save and store this information.


2.  Maintenances

2.1.  Employees file Maintenance

1.  Go to [Personnel > Add/Update Employees.

2.  At ‘Personal Details’ tab, click on <Add> button.


3.  Enter the employee’s information. Listed below are the important details required for the processing of monthly salary:
     a. Employee No.   b. Name.   c. Date of Birth.   d. I/C No.   e. Sex.   f. Marital Satus.   g. Child Relief Point.  h. Spouse Working.

     The "Child Relief Point" is now available in decimal point with increment / decrement of 0.5. With this new decimal setting, the system now allows the tax payer the flexibility to claim only 50% from the total child relief point's entitlement.

     Examples of “Child Relief Point” setting:

     Scenario 1 — Employee A and his spouse have 1 child below 18 years old. Both want to claim this 1 child relief deduction. Then, the setting in the “Child Relief Point” will be 0.5.
     Scenario 2 — Employee B and his spouse have 3 children below 18 years old. Both want to claim each child relief deduction. Then, the setting in the “Child Relief Point” will be 1.5 (0.5 x 3 children).

4.  At ‘Pay’ tab, enter the employee’s salary information; listed below are the important fields that must be filled up:
     a. JobTitle.
     b. Date Commence.
     c. Basic Rate.

5.  The tax exemption on allowances is extended to cover:
     a. Employees who are not owners and have no control of the company -> set value to “No”.
     b. Foreign workers -> set value to “Foreign”.

     Go to ‘Setting’ tab to set the value accordingly for each employee.

     The setting here will affect:
         a. PCB calculation with reference to Appendix 1: Tax Relief Table on Page 28.
         b. EA form — Part G reporting as per sample given on Page 23.

6.  Reinstate setting "1st Half PCB Directly” which is used to apply PCB deduction even on 1st half payroll generation.

7.  Click on <Save> button to save and store the employee’s information.


3.  Transactions

     During mid-month, the payroll personnel will normally enter that particular month payroll information such as attendance, claim, leave, allowance      and etc into UBS Payroll system. Listed below are the features that will be used to update Ali’s salary information for January 2009:

     3.1.  Update Pay

             1.  Go to [Payments > 2nd Half Payroll > Add / Update > Normal Pay.

             2.  Click at ‘Basic Pay & Overtime’ tab, enter Ali’s days work details. This information will be used in the monthly salary calculation, for example:
                  a. Working Days = 26.
                  b. Days Work (DW) = 24.
                  c. Public Holidays (PH) = 2.

             3.  Click on <Save> button to save and store the records. The status of the record will change to ‘Update’.

             4.  Click at ‘Relief & Rebate’ tab, enter Ali’s relief details. This is a mandatory step set by LHDN that employees must fill up the form “TP1” (Tuntutan Perlepasan) for future reference purposes. Employer should take responsibility to enforce the employees to fill up the form with proper supporting documents attached.

             5.  Double click on the grid to add or include current month relief for worker Ali, i.e RM300.00 on book relief.

           6.  Click on the <Add> button for the ‘Relief Code’ combo box to be enabled.

           7.  Click on  icon to select from the list of available reliefs preset in the system. In this example, select TR0007 — Purchase of Books/Magazines/Journals/Similar Publications.

           8.  Enter the employee’s relief information, listed below are the important fields required to process of monthly salary:
                a. Company Name.
                b. Receipt No.
                c. Relief Date (Note : The date set here must be within the current payroll month).
                d. Relief Amount (Relief amount cannot be more than the current balance amount).

           9.  Click on the <Save> button to save and store the tax relief records.

          10. A dialog box is prompted when the record is successfully saved. Click <OK> button to confirm adding this relief item into the STD calculation

           11. Click <Cancel> button to exit from the screen. The saved relief record is listed onto the listing pane of the ‘Relief & Rebate” tab.

                 Note: A ‘Tax Relief Table’ is available in the UBS Payroll as shown in Appendix 1.
                           Alternatively, user may also refer to the tax relief table stored at [Housekeeping > Setup > Government Tables].

                 Note: If the UBS HRMS system is connected to UBS Payroll, the employee’s tax relief, leave, claim and loan information can be easily exported from UBS HRMS system instead of having to re-key the information into UBS Payroll.


4.  Process Pay

     1.  Go to [Payments > 2nd Half Payroll > Process Pay].

     2.  Click on the  button at ‘Employee No.’ field to filter the employee number for this month payroll processing.

     3.  Click <OK> button to run the payroll process.

     4.  A dialog box is prompted when the month’s payroll is successfully generated. Click <OK> button to confirm completion of payroll process.

          Note: If the current month salary calculation includes Bonus and Commission, it is important to follow the sequence / steps on ‘Process pay’ in order to calculate the current month STD accurately:

5.  View / Print Pay Slip

     5.1.  View Pay Slip

             1.  Go to [Payments > 2nd Half Payroll > View Pay Slip].

             2.  Click <View Calculation> button to view the STD calculation details.

            3.  In the “View Calculation” screen, the STD calculation details shown include different type of pays of STD calculation, such as Bonus,  Commission, Director Fee and Non-Fixed Income. The manual STD calculation on how UBS Payroll application processes the STD result is further explained in Appendix 3.

     5.2.  Print Pay Slip

             1.  Go to [Payments > 2nd Half Payroll > Print Pay Slip].

             2.  Select ‘X — Pay Slip’ option and click on <OK> button.

             3.  Click <Preview> button to view the pay slip which has been generated.                    

6.  Reports

     6.1.  “Tax Relief Transaction List” and “Compensation / Gratuity Report” are two new reports added into UBS Payroll application. These new reports are meant for STD related info sheet for each employee.
             a. Go to [Payments > 2nd Half Payroll > Add/Update > Normal Pay] and click on <More> button to set the “Gratuity” details.

             b. Go to [Payments > 2nd Half Payroll > Management Reports].

     6.2.  Income Tax Report

             Employer is required to prepare form CP39 for submission to LHDN before 10th of every month. This form CP39 comes with information on monthly income tax deduction of the employees. Penalties will be imposed for late submission. Listed below are simple steps on how UBS Payroll application generates the report:

             1.  Go to [Government > Income Tax Reports].

             2.  TP 1 report
                  a. select TP 1 (new addition to the list of reports),
                  b. fill in the details for “Disedia Oleh” section,
                  c. then click <OK> button to generate the new TP 1 report.

                  d. Click on the <Preview> button to view the form TP 1 which has been generated.

     6.3.  CP 39 report
             a. Select CP 39, and then click on <OK> button.

             b. Click on the <Preview> button to view the form CP39 which has been generated.

     6.4.  CP 8A report (Borang EA)
             a. Additional fields and mechanism are incorporated into the system to cater for latest declaration requirement when generating EA Form.
             b. Go to [Government > Income Tax Reports] and select CP 8A report option.
             c. Click <Generate No. Siri> button to start the generating process.
             d. Click <Yes> button to confirm generating process.
             e. Click <OK> button after generating process is completed.
             f. Click <Generate> button to proceed with generating the EA Form figures.
             g. Click <OK> button to start the generating process and <OK> button again after generating process is completed.

             h. Click <Update> button to update the values generated in steps (c) and (g) above.
             i.  Click on “Taxable Income / Allowance / Benefit” tab to verify the calculated figures.

             Note: Gratuity is newly added to the list for EA Form update. The value updated here comes from value input in the Gratuity section via                    [Payments > 2nd Half Payroll > Add/Update > Normal Pay]; <More...> button and after payroll process is run.

             j. Click on “Non-Taxable Income / Allowance / Benefit” tab to edit taxable figure where necessary. Click <Save> button to save the                         values and then click <Exit> button to close the screen and back to the Income Tax Reports screen.

             k. Click <OK> button to generate the CP 8A report

             Sample report of form "CP8A" (also known as Borang EA):

     6.5.  CP 8 report (Borang E)

             The information set in the system can now be generated into the E Form report:
             a. Bilangan pekerja.      

             b. Potongan cukai pendapatan — submission to LHDN for declaration.

             c. Maklumat mengenai potongan cukai.

     6.6.  In the [Government > Income Tax Reports] -> CP 8 option, there is the “Disk” button on the right pane and it allows generation of report              into diskette for submission to LHDN.

             Please refer to Page 43 - 46 for the file specification on CP8D diskette submission.

     6.7.  New Report — “List Tax Exempted Allowance”.

             This new listing report provides traceability on individual employee’s claimed tax exemption in allowance and their balances.

     6.8.  Additional Information

             Additional columns, “EA and Relief Code”, are added into the Allowance Table for allowance calculation and positioning of the values to be              printed in Borang E (CP 8) and Borang EA (CP 8A) respectively.

             a. Go to [Housekeeping > Setup > Tables Maintenance] — Allowance Table.

             b. EA column — the effects on “Borang EA” depending on the line specified:

             c. Relief Code column — the effects on PCB calculation:

                 User needs to specify the correct relief code against the allowance set. This is to ensure the correct capping is referred and deducted                        when PCB calculation takes place during the monthly payroll processing. The effect will be reflected in both forms, Borang E and Borang                    EA accordingly.

                 The excess after capping will be subjected to tax and be reflected accordingly in the Borang EA as well.


7.  Month End Process

     Month end process will close the current month (January) transaction and move on to the next month (February).

     1.  Go to [Housekeeping > Month End].

     2.  Before running the month end process, user may decide to select their preferred option to close the current month transactions. The following options are available in UBS Payroll system:

     3.  Click <OK> to start running the month end process.

     4.  A dialog box will be prompted to alert user to take a backup before proceeding with the month end process. Click <Yes> button to continue with the process.

     5.  Another dialog box will be prompted upon completion of the month end process.

Appendixes

 Appendix 1: TAX RELIEF TABLE

* Employee EPF Contribution is included.

Listed below are the useful URIS for further details of the personal tax relief:

http://www.hasil.org.my/melayu/bm_N03_11.asp

http://www.gov.my/MyGov/Bl/Directory/Citizen/TaxationAndCollections/lncomeTax/lncomTaxes


Appendix 2: SPECIFICATION FOR STD CALCULATIONS USING COMPUTERIZED CALCULATION METHOD IN UBS PAYROLL SYSTEM

1.  Schedular Tax Deduction (STD) formula for computerised calculation method.

STD for current month = [(P — M) x R + B] — (Z + X)
                                                        n+1

Net STD = STD for current month — zakat and fee/levy for current month

Where P = [∑(Y – K*) + (Y1 – K1*) + [(Y2 – K2*) x n] + (Yt – Kt*)] – [D + S + 1000C + (∑LP + LP1)]

2.  Additional remuneration formula for computerised calculation method Formula and calculation.

3.  Terms and Conditions.

     i. Calculations are limited to 2 decimal points, truncate the remaining figure:
        Example: 123.4567 = 123.45

     ii. Final amount of STD must be rounding up to the highest 5 cents:
         Example 1: 287.02 ≈ 287.05
         Example 2: 152.06 ≈ 152.10

     iii. Amount of STD less than RM10 before deductions of zakat/fee or levy is not required to deduct the STD payment. However, if the amount of            STD is less than RM10 after zakat/fee/levy, the employer is required to make the deduction.

         a) STD for Normal Remuneration Formula
             Example 1: STD for current month = RM 8.00 ≈ RM 0.00
                                Zakat for current month = RM 5.00
                                Net STD = RM 0.00 (zakat of RM5.00 carried forward to following month)

             Example 2: STD for current month = RM 8.00 ≈ RM 0.00
                                Zakat for current month = RM20.00
                                Net STD = RM 0.00 (zakat of RM20.00 carried forward to following month)

             Example 3: STD for current month = RM15.00
                                Zakat for current month = RM 8.00
                                Net STD = RM 7.00 (STD must be paid)

             Example 4: STD for current month = RM15.00
                                Zakat for current month = RM20.00
                                Net STD = RM 0.00 (zakat of RM5.00 carried forward to following month)

         b) STD for Additional Remuneration Formula
             Example 1: If STD for current month is less than RM10

               Step 1[C]  STD for current month = RM 8.00 ≈ RM 0.00
                                Zakat for current month = Nil
                                Net STD = STD for current month — zakat and fee/levy for current month
                                              = RM 0.00 — RM 0.00
                                              = RM 0.00

               Step 1[D]  Total STD for a year
                                              = Total paid accumulated STD + [STD for current month at Step 1[C] x remaining month in a year including current                                                          month]
                                              = Total paid accumulated STD + [RM 0.00 x (n + 1)]

               Step 5  STD for current month which shall be paid
                                              = Net STD + STD for current month on additional remuneration
                                              = Step 1[C] + Step 4
                                              = RM0.00 + Step 4

             Example 2: If STD for current month is less than RM1O and have zakat payment

               Step 1[C]  STD for current month = RM 8.00 ≈ RM 0.00
                                Zakat for current month = RM20.00
                                Net STD = STD for current month — zakat and fee/levy for current month
                                              = RM 0.00 — RM20.00
                                              = — RM20.00

               Step 1[D]  Total STD for a year
                                               = Total paid accumulated STD + [STD for current month at Step 1[C] x remaining month in a year including current                                                          month]
                                               = Total paid accumulated STD + [RM 0.00 x (n + 1)]

               Step 5  STD for current month which shall be paid
                                               = Net STD + STD for current month on additional remuneration
                                               = Step 1[C] + Step 4
                                               = RM20.00 + Step 4

             Example 3: If STD for current month is more than zakat payment

               Step 1[C]  STD for current month = RM15.00
                                Zakat for current month = RM 8.00
                                Net STD = STD for current month — zakat and fee/levy for current month
                                              = RM15.00 — RM 8.00
                                              = RM 7.00

               Step 1[D]  Total STD for a year
                                              = Total paid accumulated STD + [STD for current month at Step 1[C] x remaining month in a year including current                                                          month]
                                              = Total paid accumulated STD + [RM15.00 x (n + 1)]

               Step 5  STD for current month which shall be paid
                                              = Net STD + STD for current month on additional remuneration
                                              = Step 1[C] + Step 4
                                              = RM 7.00 ÷ Step 4

             Example 4: If STD for current month is less than zakat payment

               Step 1[C]  STD for current month = RM15.00
                                Zakat for current month = RM20.00
                                Net STD = STD for current month — zakat and fee/levy for current month
                                              = RM15.00—RM20.00
                                              = — RM 5.00

               Step 1[D]  Total STD for a year
                                              = Total paid accumulated STD + [STD for current month at Step 1[C] x remaining month in a year including current
                                                 month]
                                              = Total paid accumulated STD + [RM15.00 x (n + 1)]

               Step 5 STD for current month which shall be paid
                                              = Net STD + STD for current month on additional remuneration
                                              = Step 1[C] + Step 4
                                              = RM 5.00 + Step 4

     iv. In the situation where employees do not receive any normal remuneration but only additional remuneration, then value of Y1 is equal to 0.

     v. If additional remuneration paid before the monthly remuneration, value of Y1 shall refer to the monthly remuneration which will be paid for                that month.

     vi. STD is to be deducted from the employee’s taxable remuneration only. All the tax exemption on allowances, benefit-in-kind and perquisites               shall be excluded from the remuneration for STD purposes.

          Example:
            Normal remuneration : RM5,000 per month
            Car allowance : RM 800 per month
            Meal allowance : RM 300 per month (Exempted)
            Childcare allowance : RM 300 per month (Exempted — limit to RM2,400 per year)
            Total                           RM6,400 per month

            To determine STD amount, taxable remuneration is as follow:

            Normal remuneration : RM5,000 per month
            Car allowance : RM 800 per month
            Total taxable remuneration RM5.800 per month

     vii. All allowable deductions are limited up to the maximum amount under the Income Tax Act 1967.

     viii. Total contribution to EPF or other Approved Scheme made on all remuneration (monthly remuneration, additional remuneration and                          remuneration from previous employer) and life insurance premium paid (including premium claimed under previous employment, if any) is not limited to RM500.00 per month but not exceeding RM6,000.00 per year.

     ix. Actual amount of STD (including the cents value) must be paid to LHDNM.


EXAMPLE OF CALCULATION

STD Calculation for January

Case Study: Employee (Married) and wife working
                    3 children entitle for education

                    Monthly normal remuneration for January = RM 5,500.00
                    EPF = RM 605.00
                    Additional deduction = Nil
                    STD paid = Nil
                    Additional remuneration — Bonus
                    received in month of April = RM 8,250.00      EPF = RM 913.00

[A] Determine category of employee

      Category 3 / KA3

[B] Determine chargeable income for a year [P]

       Firstly determine value K2
       K2 = Estimated balance of total contribution to EPF or other Approved Scheme and life insurance premium for the balance of the qualifying                        month
            = [[RM6,000.00 (limited) — (K + K1 + Kt)] /n] or K1 whichever is lower
            = [[RM6,000.00 — (RM0.00 + RM605.00 + RM0.00) /11]
            = RM 490.45

       *Total EPF = K + K1 + Kt + (K2 x n) ≤ RM6,000.00 (limit)
                         = RM0.00 + RM605.00 + RM0.00 + (RM490.45 x 11) ≤ RM6,000.00 (limit)
                         = RM605.00 + RM5,394.95 ≤ RM6,000.00 (limit)
                         = RM5,999.95 ≤ RM6,000.00 (limit)

                            where n= 11

        P = [∑(Y — K*) + (Y1 — K1*) + [(Y2 — K2*) x n] + (Yt — Kt*)] — [D+S+1000C + (∑LP + LP1)]
              where (Yt — Kt) = 0
           = [∑(RM0.00 — RM0.00) + (RM5,500.00 — RM605.00*) + [(RM5,500.00 — RM490.45*) x 11]
              + (RM0.00 — RM0.00)] — [RM8,000.00 + RM0.00 + RM1,000.00(3) + (RM0.00 + RM0.00)]
           = [[RM4,895.00] + [(RM5,009.55 x 11)] — [RM8,000.00 + RM0.00 + RM3,000.00]
           = RM4,895.00 + RM55,105.05 — RM11,000.00
           = RM49,000.05

 [C] Determine monthly STD for the net normal remuneration. Once value of P in Step [B] is determined, value of M, R and B are determined          based on Schedule 1 above.

       STD for current month
              = [(P — M) x R + B]—(Z + X)
                                 n+1
              = [RM49,000.05 — RM35000.001 x 12% + RM1,525.00 — (RM0.00 + RM0.00)
                                                                       11+1
              = RM267.08 ≈ RM267.10

STD Calculation for February

Case Study: Employee (Married) and wife working
                    3 children entitle for education

                    Monthly normal remuneration for February = RM 5,500.00
                    EPF = RM 605.00
                    Additional deduction = Nil
                    STD paid (January) = RM267.10

[A] Determine category of employee

      Category 3 / KA3

[B] Determine chargeable income for a year [P]

      Firstly determine value K2
      K2 = Estimated balance of total contribution to EPF or other Approved Scheme and life insurance premium for the qualifying monthly balance
           = [[RM6,000.00 (limited) — (K + K1 + Kt)] /n] or K1 whichever is lower
           = [[RM6,000.00 — (RM605.00 + RM605.00 + RM0.00) 1/10]
           = RM 479.00

      *Total EPF = K + K1 + Kt + (K2 x n) ≤ RM6,000.00 (limit)
                       = RM605.00 + RM605.00 + RM0.00 + (RM479.00 x 10) ≤ RM6,000.00 (limit)
                       = RM605.00 + RM605.00 + RM4,790.00 ≤ RM6,000.00 (limit)
                       = RM6,000.00 ≤ RM6,000.00 (limit)
                          where n = 10

       P = [∑(Y — K*) + (Y1 — K1*) + [(Y2 — K2*) x n] + (Yt — Kt*)] — [D+S+1000C + (∑LP + LP1)]
             where (Yt — Kt) = 0
           = [(RM5,500.00 — RM0.00) + (RM5,500.00 — RM605.00*) + [(RM5,500.00 — RM479.00*) x 10] + (RM0.00 — RM0.00)] — [RM8,000.00 +                         RM0.00 + RM1,000.00(3) + (RM0.00 + RM0.00)]
           = [[RM4,895.00] + RM4,895.00 + [(RM5,021.00 x 10)] — [RM8,000.00 + RM0.00 + RM3,000.00]
           = RM4,895.00 + RM4,895.00 + RM50,210.00 — RM11,000.00
           = RM49,000.00

[C] Determine monthly STD for the net normal remuneration. Once value of P in Step [B] is determined, value of M, R and B are determined         based on Schedule 1 above.

      STD for current month
             = [(P — M) x R + B] — (Z + X)
                                n+1
             = [RM49.000.00 — RM35,000.00] x 12% + RM1.525.00 — (RM0.00 + RM267.10)
                                                                     10+1
             = RM267.08 ≈ RM267.10

STD Calculation for March

Case Study: Employee (Married) and wife working
                    3 children entitle for education

                    Monthly normal remuneration for March = RM 5,500.00
                    EPF = RM 605.00
                    Additional remuneration = Nil
                    Additional deduction i) Purchase of books                = RM 100.00
                                                    ii) Medical expenses for parent = RM 200.00
                                                                                                         RM 300.00
                    STD paid (January until February; RM267.10 + RM267.10) = RM 534.20

[A] Determine category of employee

      Category 3 / KA3

[B] Determine chargeable income for a year [P]

      Firstly determine value K2
      K2 = Estimated balance of total contribution to EPF or other Approved Scheme and life insurance premium for the qualifying monthly balance
           = [[RM6,000.00 (limited) — (K + K1 + Kt)] /n] or K1 whichever is lower
           = [[RM6,000.00 — ((RM605.00 x 2) + RM605.00 + RM0.00)] /9]
           = RM465.00

      *Total EPF = K + K1 + Kt + (K2 x n) ≤ RM6,000.00 (limit)
                       = (RM605.00 x 2) + RM605.00 + RM0.00 + (RM465.00 x 9) ≤ RM6,000.00 (limit)
                       = RM1,210.00 + RM605.00 + RM4,185.00 ≤ RM6,000.00 (limit)
                       = RM6,000.00 ≤ RM6,000.00 (limit)
                          where n = 9

      P = [∑(Y — K*) + (Y1 — K1*) + [(Y2 — K2*) x n] + (Yt — Kt*)] — [D+S+1000C + (∑LP + LP1)]
            where(Yt — Kt) = 0
         = [(RM11,000.00 — RM1,210.00) + (RM5,500.00 — RM605.00*) + [(RM5,500.00 — RM465.00*) x 9] + (RM0.00 — RM0.00)] — [RM8,000.00 +                 RM0.00 + RM1,000.00(3) + (RM0.00 + RM300.00)]
         = [RM9.790.00 + RM4,895.00 + [(RM5,035.00 x 9)]] — [RM8,000.00 + RM0.00 + RM3,000.00 + RM300.00]
         = RM60,000.00 — RM11,300.00
         = RM48,700.00

[C] Determine monthly STD for the net normal remuneration. Once value of P in Step [B] is determined, value of M, R and B are determined         based on Schedule 1 above.

      STD for current month
             = [(P — M) x R + B] — (Z + X)
                                n+1
             = [RM48.700.00 — RM35,000.00] x 12% + RM1.525.00 — (RM0.00 + RM534.20)
                                                                      9 +1
             = RM263.48 ≈ RM263.50
                       
STD Calculation for April
(receive additional remuneration — using Additional Remuneration Formula)

Case Study: Employee (Married) and wife working
                    3 children entitle for education

                    Monthly normal remuneration for April = RM 5,500.00
                    EPF = RM 605.00
                    Additional remuneration = Nil
                    Additional deduction i) Purchase of books                = RM 100.00
                                                    ii) Medical expenses for parent = RM 200.00
                                                                                                         RM 300.00
                    STD paid [January until March; (RM267.10 x 2) + RM263.50] = RM 797.70
                                       
                    Additional Remuneration — Bonus = RM8,250.00      EPF = RM913.00

Step 1 - Determine STD on net remuneration for a year (not including current month’s additional remuneration)

[A] Determine category of employee

      Category 3 / KA3 

[B] Determine chargeable income for a year [P]

      Firstly determine value K2
      K2 = Estimated balance of total contribution to EPF or other Approved Scheme and life insurance premium for the qualifying monthly balance
           = [[RM6,000.00 (limited) — (K + K1 + Kt)] /n] or K1 whichever is lower
           = [[RM6,000.00 — ((RM605.00 x 3) + RM605.00 + RM0.00)] /8]
           = RM447.50

      *Total EPF = K + K1 + Kt + (K2 x n) ≤ RM6,000.00 (limit)
                       = (RM605.00 x 3) + RM605.00 + RM0.00 + (RM447.50 x 8) ≤ RM6,000.00 (limit)
                       = RM1,815.00 + RM605.00 + RM3,580.00 ≤ RM6,000.00 (limit)
                       = RM6,000.00 ≤ RM6,000.00 (limit)
                          where n = 8

      P = [∑(Y — K*) + (Y1 — K1*) + [(Y2 — K2*) x n] + (Yt — Kt*)] — [D+S+1000C + (∑LP + LP1)]
             where (Yt — Kt) = 0
         = [(RM16,500.00 — RM1,815.00*) + (RM5,500.00 — RM605.00*) + [(RM5,500.00 - RM447.50*) x 8] + (RM0.00 — RM0.00)] — [RM8,000.00 +                 RM0.00 + RM1,000.00(3) + (RM300.00 + RM300.00)]
         = [RM14,685.00 + RM4,895.00 + [RM5,052.50 x 8]] — [RM8,000.00 + RM0.00 + RM3,000.00 + RM300.00 + RM300.00]
         = RM60,000.00 — RM11,600.00
         = RM48,400.00

[C] Determine monthly STD for the net normal remuneration. Once value of P in Step [B] is determined, value of M, R and B are determined         based on Schedule 1 above.

      STD for current month
             = [(P — M) x R + B] — (Z + X)
                                   n+1
             = [RM48,400.00 — RM35,000.00] x 12% + RM1,525.00 — (RM0.00 + RM797.70)
                                                                         8+1
             = RM259.47

      Net STD = STD for current month — zakat and fee/levy for current month
                    = RM259.47 — RM0.00
                    = RM259.47 

[D] Determine total STD for a year

       Total STD for a year = Total paid accumulated STD + [STD for current month at Step [C] x remaining month in a year including current month]
                                       = X + [(STD for current month at Step [C] x (n + 1)]
                                       = RM797.70 + [(RM259.47 x (8 + 1))]
                                       = RM797.70 + RM2,335.23
                                       = RM3,132.93

Step 2 - Determine chargeable income for a year [P] (including additional remuneration for current month) and additional remuneration                       which has been paid

[A] Determine category of employee

      Category 3 / KA3

[B] Determine chargeable income for a year [P]

      Firstly determine value K2
      K2 = Estimated balance of total contribution to EPF or other Approved Scheme and life insurance premium for the qualifying monthly balance
           = [[RM6,000.00 (limited) — (K + K1 + Kt)] /n] or K1 whichever is lower
           = [[RM6,000.00 — ((RM605.00 x 3) + RM605.00 + RM913.00)] /8]
           = RM 333.37

      *Total EPF = K + K1 + Kt + (K2 x n) ≤ RM6,000.00 (limit)
                        = (RM605.00 x 3) + RM605.00 + RM913.00 + (RM333.37 x 8) ≤ RM6,000.00 (limit)
                        = RM1,815.00 + RM605.00 + RM913.00 + RM2,666.96 ≤ RM6,000.00 (limit)
                        = RM5,999.96 ≤ RM6,000.00 (limit)
                           where n = 8

      P = [∑(Y — K*) + (Y1 — K1*) + [(Y2 — K2*) x n] + (Yt — Kt*)] — [D+S+1000C + (∑LP + LP1)]
            where (Yt — Kt) = 0
         = [(RM16,500.00 — RM1,815.00*) + (RM5,500.00 — RM605.00*) + [(RM5,500.00 — RM333.37*) x 8] + (RM8,250.00 — RM913.00)] —                             [RM8,000.00 + RM0.00 + RM1,000.00(3) + (RM300.00 + RM300.00)]
         = [RM14,685.00 + RM4,895.00 + [RM5,166.63 x 8] + RM7,337.00] — [RM8,000.00 + RM0.00 + RM3,000.00 + RM300.00 + RM300.00]
         = RM68,250.04 — RM11,600.00
         = RM56,650.04

Step 3 - Determine total tax for a year based on value of [P] in Step 2[B]. Value of M, R and B are based on value as per Schedule 1 below:

      Total tax for a year = (P — M) x R + B
                                     = (RM56,650.04 — RM50,000.00) x 19% + RM3,325.00
                                     = RM4,588.50


Step 4 - Determine STD for current month additional remuneration where total tax (Step 3) less total STD for a year (Step 1[D]). zakat                        and fee/levy which has been paid

      STD for additional remuneration = Step 3 — [Step 1[D] + zakat and fee/levy which has been paid]
                                                         = RM4,588.50 — [RM3,132.93 + RM0.00]
                                                         = RM1,455.57

Step 5 - STD for current month which shall be paid

      = Net STD + STD for current month on additional remuneration
      = Step 1[C] + Step 4
      = RM259.47 + RM1,455.57
      = RM1,715.04 ≈ RM1,715.05


NOTE:

STD Calculations for the month of May until December are as per example above. Total remuneration, STD paid and the deductions/rebates will be accumulated and brought forward from month to month until month of December in a current year.


Appendix 3: Manual STD working of Worker Ali (sample used in calculation above)

STD Calculation for January

Case Study: Employee “Ali” (Married) and wife not working
                    4 children under 18 years old

                    Monthly normal remuneration for April = RM 4,900.00
                    EPF = RM 539.00
                    Additional remuneration = Nil
                    Additional deduction  i) Purchase of books = RM 300.00

[A] Determine category of employee

      K2KA4 = K2 : Wife not working
      KA4 : 4 kids under 18 years old

[B] Determine chargeable income for a year [P]

       Firstly determine value K2
       K2 = Estimated balance of total contribution to EPF or other Approved Scheme and life insurance premium for the balance of the qualifying                        month
            = [[RM6,000.00 (limited) — (K + K1 + Kt)] /n] or K1 whichever is lower
            = [[RM6,000.00 — (RM0.00 + RM539.00 + RM0.00)] /11]
            = RM 496.45

       *Total EPF = K + K1 + Kt + (K2 x n) ≤ RM6,000.00 (limit)
                         = RM0.00 + RM539.00 + RM0.00 + (RM496.45 x 11) ≤ RM6,000.00 (limit)
                         = RM539.00 + RM5,460.95 ≤ RM6,000.00 (limit)
                         = RM5,999.95 ≤ RM6,000.00 (limit)
                            where n = 11

       P = [∑(Y — K*) + (Y1 — K1*) + [(Y2 — K2*) x n] + (Yt — Kt*)] — [D+S+1000C + (∑LP + LP1)]
             where (Yt — Kt) = 0
          = [∑(RM0.00 — RM0.00) + (RM4,900.00 — RM539.00*) + [(RM4,900.00 — RM496.45*) x 11] + (RM0.00 — RM0.00)] — [RM8,000.00 +                              RM3,000.00 + RM1,000.00(4) + (RM0.00 + RM300.00)]
          = [[RM4,361.00] + [(RM4,403.55 x 11)] — [RM8,000.00 + RM3,000.00 + RM4,000.00]] + RM300.00
          = RM4,361.00 + RM48,439.05 — RM15,000.00 — RM300.00
          = RM37,500.05

[C] Determine monthly STD for the net normal remuneration. Once value of P in Step [B] is determined, value of M, R and B are determined         based on Schedule 1 above.

      STD for current month
               = [(P — M) x R + B] — (Z + X)
                                  n+1
               = [RM37,500.05 — RM35,000.00] x 12% + RM1,525.00 — (RM0.00 + RM0.00)
                                                                         11 + 1
               = RM152.08

      Current Period STD without Bonus = STD — Current Period Zakat
                                                             = RM152.08 — RM0.00
                                                             = RM152.08 ≈ RM152.10


Note: Please also refer to the URL provided below for more details on the STD (Schedular Tax Deductions) information.
          http://www.hasil.org. my/melayu/pdf/NOTA%20PENERANGAN%20KPD%20JADUAL%20STD%202009.PDF


                                                                     *** The End ***

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