Managed Payroll Services in Malaysia

  • Payroll Processing Malaysia

  • Fund Management Malaysia

Our Malaysia Managed Payroll Service provides businesses a convenient way to manage their payroll within both Mainland Malaysia, Sabah and Sarawak.

Our services in Malaysia include:

  • Full end to end payroll including adjustments, overtime, expenses etc
  • Range of payslips including both electronic and carbon based
  • Compliance with Ministry of Human Resources, (Kementerian Sumber Manusia)
  • Range of monthly and annual reports, including EPF and Socso
  • Mandatory Social Security Deductions (SocSo) where applicable
  • Mandatory Monthly Tax Deduction (MTD) where applicable
  • Mandatory Employees Provident Fund (EPF) where applicable
  • End of year tax consolidation and submission
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Social Security Scheme

Employees Provident Fund Act 1991 (Act 452), known as the EPF is a social security institution that provides retirement funding. The fund requires contribution from both the employer and the employee. The employee’s portion of the EPF will be deducted from their salary. Expatriates or foreign citizens are not required to contribute to the EPF.


Malaysia Tax

Inland Revenue Board of Malaysia is one of the main revenue collecting agencies of the Ministry of Finance.


Corporate Income Tax

If the company’s management and control are in Malaysia, the company is regarded as a tax resident. The company’s paid up capital of less than RM2.5 million, including the capital from all its related group of companies are taxed at the following different two-tiered rates for Year of Assessment (YA) 2016 and 2017. Companies with more than RM2.5 million paid up capital will be taxed at 24%.


Resident Company Tax Rates

Chargeable Income Tax Rate (%)
YA 2016 YA 2017
Paid up capital of not more than RM2.5 million On first RM500,000 19% 18%
Subsequent Balance 24% 24%
Company with paid up capital more than RM2.5 million 24% 24%

Non-Resident Companies’ income accruing in or derived from Malaysia is taxable if it carries on its business through a permanent establishment in Malaysia.


Non-resident Company Tax Rates w.e.f YA 2017

Type of income Tax rate (%)
Business or rental income 24%
Royalties 10%
Rental of moveable properties 10%
Technical or management service fees 10%
Interest 15%
Dividends 0%
Other income 10%


Personal Income Tax

The individual is regarded as a tax resident in that YA if the following conditions apply:

  • The individual is in Malaysia for 182 days or more in the YA.
  • The individual is in Malaysia for less than 182 days in that particular YA, but the individual is in Malaysia for 182 or more consecutive days in the following or preceding year to that YA.
    • Temporary absences due to business trips, treatment for ill-health or social visits for 14 days or less, are included in the consecutive days if the individual is in Malaysia before and after each temporary absence.
  • The individual is in Malaysia for 90 days or more during the YA and, in any three of the four immediately preceding years to the YA, he was in Malaysia for at least 90 days or was a resident in Malaysia.
  • The individual is a resident for the year immediately following that year and for each of the three immediately preceding years.

Resident Personal Income Tax Rates

Chargeable Income in Ringgit Rate % Tax ($) in Ringgit
5,001 – 20,000 On the First 5,000 0
Next 15,000 1 150
20,001 – 35,000 On the First 20,000 150
Next 15,000 5 750
35,001 – 50,000 On the First 35,000 900
Next 15,000 10 1,500
50,001 – 70,000 On the First 50,000 2,400
Next 20,000 16 3,200
70,001 – 100,000 On the First 70,000 5,600
Next 30,000 21 6,300
100,001 – 250,000 On the First 100,000 11,900
Next 150,000 24 36,000
250,001 – 400,000 On the First 250,000 47,900
Next 150,000 24.5 36,750
400,001 – 600,000 On the First 400,000 84,650
Next 200,000 25 50,000
600,001 – 1,000,000 On the First 600,000 134,650
Next 400,000 26 104,000
Above 1,000,000 On the First 1,000,000 238,650
Above 1,000,000 28

The individual is regarded as a non-resident if the individual stays in Malaysia for less than 182 days in a year, regardless of citizenship or nationality.


Non-Resident Personal Income Tax Rates

Types Of Income Rate (%)
Business, trade or profession
Employment
Dividends
Rents
28
Public Entertainer
Interest
15
Royalty;
Payments for services in connection with the use of property or installation, operation of any plant or machinery purchased from a non-resident;
Payments for technical advice, assistance or services rendered in connection with technical management or administration of any scientific, industrial or commercial undertaking, venture, project or scheme;
Rent or other payments for the use of any movable property
10

Individuals are not taxable if their employment in Malaysia is less than 60 days, are employed on board a Malaysian ship, aged 55 years old who are receiving interest from banks, pension, or tax exempt dividends.


Other Taxes

  • 6% Goods and Services Tax (GST) is chargeable on the standard rated supply of goods and services made in the course of a business in Malaysia by a taxable person, as well as on the imports of goods and services to Malaysia. Certain zero-rated goods and services supplies are subjected to a GST of 0% where GST paid on their inputs can be claimed as credits. Certain exempt supply of goods and services do not attract GST.
  • Goods imported into Malaysia that are subjected to import duties, are generally levied on an ad valorem basis between 2% to 60%, or may also be imposed on a specific basis in terms of a specific amount per unit.
  • There are export duties on main commodities such as crude petroleum and palm oil, and excise duties on a selected range of goods.
  • Stamp Duty is chargeable on instruments and not on transactions. Consequently, no duty is charged on transaction without creating an instrument of transfer.
  • Residents and non-residents are chargeable for Real Property Gains Tax (RPGT) on gains arising from the disposal of real property such as land in Malaysia, and shares in real property company (RPC). RPC is a controlled company owned by a maximum of 50 members and controlled by 5 persons or less, with 75% or more total tangible assets in real property and/or shares in another RPC.
Managed Payroll Services