There is a range of salary in Malaysia where one should never give an increment in December. This will lead to a substantial loss of income for the staff and a wasted expense for the company.
The following is based on a single staff with RM4,000 salary with a salary increment of RM400 in December. The result is as follows.
| Month | Salary | Net Pay | PCB |
| September | 4,000.00 | 3,515.70 | 16.65 |
| October | 4,000.00 | 3,515.70 | 16.65 |
| November | 4,000.00 | 3,515.70 | 16.65 |
| December | 4,400.00 | 3,444.90 | 440.65 |
Note that income and PCB are the same for every month up to December. On applying a RM400 increment in December, the net pay actually drops below the previous income by RM70.80. This is due to the increase in PCB from RM16.65 to RM440.65.
Below is the same scenario with RM200 increment. Net Salary drops more than RM200.
| Month | Salary | Net Pay | PCB |
| September | 4,000.00 | 3,515.70 | 16.65 |
| October | 4,000.00 | 3,515.70 | 16.65 |
| November | 4,000.00 | 3,515.70 | 16.65 |
| December | 4,200.00 | 3,280.30 | 428.65 |
For December, a pay increase of RM200 will in a decrease in salary of RM 235.40. The increment is completely wasted.
This happens because PCB calculation is based on annual income. The increase in PCB is paid in one month instead of being divided over 12 months. It is recommended that the increment be deferred to January to overcome this problem.
Following is a table showing what the net pay and PCB will be if the increment was done on earlier months. One can see the steady increase in PCB as the increment is given in later months.
| Month | Salary | Net Pay | PCB | Difference |
| Before Increment | 4,000.00 | 3,515.70 | 16.65 | |
| June | 4,400.00 | 3,787.75 | 97.80 | 272.05 |
| October | 4,400.00 | 3,711.55 | 174.00 | 195.85 |
| November | 4,400.00 | 3,644.90 | 240.65 | 129.20 |
| December | 4,400.00 | 3,444.90 | 440.65 | -70.80 |
For an increment of RM400, the increase in Net pay gets lower and lower as it is paid later. For December, a pay increase of RM400 actually results in a decrease in the salary of RM 70.80. The increment is completely wasted.
If the salary increment is differed to January, the rate will be as follows :
In January :
PCB for 4,200 will be RM62.
PCB for 4,400 will be RM74.
This is because the jump in PCB is divided over 12 months. Although there is no net saving, the net salary will increase.
The trigger salary for single staff is RM4,000+.
For married and Spouse not working with or without children the losses are even greater, but the trigger point is also higher.
Following calculations are for married and spouse not working without children.
| Month | Salary | Net Pay | PCB |
| September | 4,333.00 | 3,824.55 | – |
| October | 4,333.00 | 3,824.55 | – |
| November | 4,333.00 | 3,824.55 | – |
| December | 4,600.00 | 3,446.35 | 615.80 |
Income drops from 3,824 to 3446 with and increment of 267. PCB increases from zero to 615.80 resulting in a net decrease in salary of 378.20.
Following calculations are for married and spouse not working with 1 Child.
| Month | Salary | Net Pay | PCB |
| September | 4,500.00 | 3,973.85 | – |
| October | 4,500.00 | 3,973.85 | – |
| November | 4,500.00 | 3,973.85 | – |
| December | 5,000.00 | 3,785.35 | 630.00 |
Income drops from 3,973.85 to 3,785.35 with and increment of 500. PCB increases from zero to 630 resulting in a net decrease in salary of 188.50.
Following is a table of the the trigger points for married and spouse not working with zero to 3 children.
| No. of Children | SALARY | NET SALARY |
| 1. Married and Spouse not working without children | 4,333.00 | 3,824.55 |
| 2. Married and Spouse not working with 1 child | 4,500.00 | 3,973.85 |
| 3. Married and Spouse not working with 2 children | 4,666.00 | 4,118.45 |
| 4. Married and Spouse not working with 3 children | 4,833.00 | 4,266.05 |
From the above calculations it can be confirmed that giving an increment in the end of the year will result in a loss to both the employee and employer. It is recommended that the increment be carried forward to the next year and any salary loss due the deferment be paid as an allowance or bonus in January.
Note :
The above calculations are based on a theoretical assumption of a fixed wage through the year. This PCB is increase is triggered when the year to date gross salary increases to 12 x the monthly salary used in the examples above.
For example for the scenario based on 4000 salary, the PCB increase will be triggered when the gross income for the year increases above 4000 x 12 = 48,000. Note that the above calculations take into account the EPF deduction for PCB calculations.