More than 50% will get this wrong!

While developing and supporting Actpay over the past 7 years we have came across some common errors faced by many payroll admin.

Calculation based on monthly rated worker, Normal OT (1.5), Work on one Sunday for 6 hours and January salary.

Want to double-check if your payroll calculations are correct? Here’s a simple test. Calculate Netpay, EPF and SOCSO based on EA and 9% EPF. See if you can get the correct answer.

Answer is :

Netpay = 5,887.77

Employer EPF = 794.00

Employer SOCSO = 30.65

Parameters : Monthly rated worker, Normal OT (1.5), Work on one Sunday for 6 hours and August salary.

Answer is :

Basis of calculation.

Overtime Calculation

Attendance Allowance = Wages for work done.

Travelling Allowance : Exempted from Overtime, EPF and SOCSO

Overtime rate = ( Basic Salary + Other wages ) / 26 / 8 = (1500 +160) / 26 / 8 = 7.981

Overtime for 10 hours at 1.5 rate = 7.981 x 1.5 x 10 = 119.72

Rest Day for overtime = ( Basic Salary + Other wages ) / 26 = (1500 +160) / 26 = 63.85

No pay leave deduction = Wages / No. of days in month = 1660 / 31 = 53.55

SOCSO calculation

Wages = Basic – No pay leave + Overtime + Allowance = 1500 – 53.55 + 119.72 + 63.85 + 160 = 1790.02

Employer SOCSO for 1790.02 = 30.65

EPF Calculation

Wages = Basic – No pay leave + Allowance + Bonus = 1500 -53.55 + 160 + 4500 = 6106.45

Employer EPF rate for Salary below 5000 is 13% and above 5000 is 12%.

But bonus is treated differently for EPF. If Basic salary is below 5000 and the total amount with bonus is over 5000, Employer EPF is calculated based on 13% not 12%

EPF for Basic + Bonus = 6106.45 x 13% = 793.83

EPF for Basic + Bonus = 794 (Rounded to the next ringgit)

Netpay = 6503.57 – 550 -8.75 -3.50 – 53.55 = 5,887.77