How do I set up pay run inclusions via the Payroll platform?

Pay Run Inclusions comprise of additional pay items that are set up against an employee and then automatically included in the pay run. The specific items include:

• Additional earnings
• Statutory Contribution Adjustment
• Tax Adjustments
• Tax Relief
• Benefits in kind
• Deductions
• Expenses
• Employer Liabilities

These can be set up to include a specific start date and end date (otherwise it can repeat indefinitely). In order to set up a pay run inclusion for an employee, choose the relevant employee from the employee list and then select 'Pay Run Inclusions' from the left side menu. 

From there, refer to the following instructions below depending on what item you want to set up.

Setting up recurring Additional earnings

Add earnings which are to be processed on a regular basis. An example of when to use this could be a regular laundry or tool allowance.

1. Click on 'Add'.
2. Select the appropriate pay category from the drop down list.
3. Select the location the earnings are to be allocated to. If the employee's default location is to be used, there is no need to make a selection.
4. Enter the number of units to be paid in each pay run into the 'Earnings (per pay run)' field.
5. Enter the rate to be applied, this will apply to the number of units entered.
6. Enter any notes if you want the employee to see them on their pay slip.
7. Select which pay runs the earnings should apply to. Options are all future pay runs (there will be no end/expiry date), all pay runs where the pay period starts before (end date will be specified) or all pay runs until the maximum amount has been reached (expiry amount will be specified).
8. Click on 'Save'.

An example of an Additional earnings records is as follows:

Setting up a recurring Statutory contribution adjustment

1. Click on 'Add'.
2. Select the appropriate contribution type from the drop down list (i.e. EPF, SOCSO etc). If you select 'Employer EPF', you'll also need to enter the provident fund details;
3. Enter the adjustment amount to be applied per pay run. It can be a fixed amount or a percentage of gross.
4. Enter any notes if you want the employee to see them on their pay slip;
5. Enter the date this inclusion is to commence ('today' or 'the following date');
6. Choose when this inclusion should cease ('on the following date', 'never' or 'after the following amount has been reached');
7. Click on 'Save'.

An example of a Statutory contribution adjustment is as follows:

Setting up a recurring Tax adjustment

An example scenario of when to use this would be when an employee has requested additional tax be deducted from their pay.

1. Click on 'Add'.
2. Select the tax type (PCB, CP38, TP1 Zakat, TP1 Relief);
3. Enter the adjustment amount to be applied per pay run. It can be a fixed amount, a percentage of gross, or a percentage of taxable earnings;
4. Enter any notes if you want the employee to see them on their pay slip;
5. Enter the date this inclusion is to commence ('today' or 'the following date');
6. Choose when this inclusion should cease ('on the following date', 'never' or 'after the following amount has been reached');
7. Click on 'Save'.

An example of a Tax adjustment is as follows:

Setting up a recurring Tax relief

Before you start setting up recurring tax reliefs, it's important to make sure the correct year is selected by checking the drop down field to the right hand side:

The new tax relief items for 2022 are listed at the bottom of the list. These are:

• Vaccination expenses on self, spouse or child;
• Lifestyle - purchase of a personal computer, smartphone or tablet not for business use;
• Expenditure on payment of electric vehicle charging facilities.

Tax reliefs are set by LHDN, where you are able to deduct a certain amount for the current assessment year, from the total annual income. 

NB: Only optional tax reliefs are available to set up a recurring deduction for. 

1. Click on 'Add'.
2. Select the appropriate optional tax relief category from the drop down box. 
3. Enter the deduction amount to be applied per pay run. It can be a Fixed amount, a Percentage of gross, or a percentage of net. 
4. Enter any notes if you want the employee to see them on their pay slip.
5. Enter the date this inclusion is to commence.
6. Choose when this inclusion should cease ('on the following date', 'never' or 'after the following amount has been reached');
7. Click on 'Save'.

An example of a Tax relief is as follows:

Setting up Benefits in kind

1. Click on 'Add'.
2. Select the appropriate optional tax category from the drop down box;
3. Select the appropriate benefit in kind category;
4. Enter the deduction amount to be applied per pay run;
5. Enter any notes if you want the employee to see them on their pay slip;
6. Enter the date this inclusion is to commence;
7. Choose when this inclusion should cease ('on the following date', 'never' or 'after the following amount has been reached');
8. Click on 'Save'.

An example of a Benefit in kind is as follows:

Setting up a recurring Deduction

1. Click on 'Add'.
2. Select the appropriate deduction category from the drop down list. The business deduction categories (on the payroll settings > deductions page) will determine what the options are. There will be 5 system default deduction categories consisting of;
   • Zakat (deducted from payroll) - Post-tax
   • Religions trip (deducted from payroll) - Post-tax
   • PTPTN (Student loan) - Pre-tax
   • Recovery of advanced or overpayment of wages - Pre-tax
3. Enter the deduction amount to be applied per pay run. It can be a Fixed amount or a Percentage of gross earnings.
4. Choose a frequency option. You are able to select from:
   • Pay run earnings: The deduction will be included in every pay run for the specified amount
   • Total monthly earnings: The deduction will be calculated using the month to date earnings. The 'month to date' value used for the calculation is defined as any earnings that fall within the calendar month based on the pay period end date. The range of time used is from the first day of the month to the last day of the month.

   For example, if there are 2 pay runs that have a pay period end date falling within March and there is a fixed amount deduction setup, the first pay run will deduct the specified RM amount, as expected and the second pay run will display the deduction record with a RM 0 value and note confirming the deduction has already been taken for the month, see below:

   

   If the above deduction was updated to 'Percentage of gross earnings' with the value set at 1.5%, the first pay run will deduct 1.5% of the employee's gross earnings for the pay run, in the second pay run, 1.5% of the gross earnings will also be deducted.

5. Select whether you want to pay the deduction manually, paid to a bank account, paid to the LHDN/IRB account, or paid to Zakat (this is the only option if the deduction category is Zakat).
6. If in Step 4, you have chosen a bank account, ensure you then select the relevant bank account which will need to have been created first on the'Employee file' > 'Bank accounts' page.
7. Enter any notes if you want the employee to see them on their pay slip
8. Enter the date this inclusion is to commence.
9. Choose when this inclusion should cease ('on the following date', 'never' or 'after the following amount has been reached')
10. Click on 'Save'.

An example of a deduction is as follows:

NB; System deduction categories will populate both scheduled pay runs and adhoc pay runs if there is a recurring deduction created for the employee.

Setting up a recurring Expense

An example scenario of when to use this would be when an agreement has been reached with an employee that the company will reimburse mobile phone expenses and will not form part of their gross wage.

To add a new recurring employee expense, click the 'Add' button on the right of 'Expenses' and complete the following details: 

1. Select the appropriate expense category from the drop down list. The list here will reflect the expense categories that have been added at a business level on the payroll settings > expenses page. 
2. Select the location the expense should be costed against. This will default to the employee's default location however you can change this to another location that the employee is attached to.
3. Enter the expense reimbursement amount to be applied per pay run.
4. Enter any notes if you want the employee to see them on their pay slip.
5. Enter the date this inclusion is to commence.
6. Choose when this inclusion should cease ('on the following date', 'never' or 'after the following amount has been reached');
7. Click on 'Save'.

An example of an Expense is as follows:

Setting up a recurring Employer liability   

1. Click on 'Add'.
2. Select the appropriate liability category from the drop down list.
3. Enter the liability amount to be applied per pay run. You can choose to enter a fixed dollar amount, or a percentage of gross pay.
4. Enter any notes if you want the employee to see them on their pay slip.
5. Enter the date this inclusion is to commence.
6. Choose when this inclusion should cease (a specific end date, never or once a particular dollar amount has been reached).
7. Click on 'Save'.

An example of an Employer liability is as follows:

Setting up Preserved Earnings

Preserved earnings is defined as the minimum net earnings an employee MUST be paid before a deduction amount can be applied in the pay run. For example, an employee could have a garnishee order but part of the order includes that the employee's net pay cannot be reduced to less than RM300 per week as a result of the garnishee order. To set this up of example, you would:

(a) Preserved earnings: select 'Once a minimum net earnings limit has been reached';

(b) Preserved earnings amount: enter 350;

(c) If the amount is not reached: here you can choose to have none or only part of the deduction amount processed in the pay run;

(d) Carry forward unpaid deduction amounts: here you can choose whether or not you want any unpaid deduction amounts to be carried over to following pay runs. For example, say an employee’s recurring deduction amount was fixed at RM100 per pay run but only RM50 was deducted in the pay run. If you choose to carry forward the unpaid deduction amount, the unpaid RM50 will be carried over and a total of RM150 will be deducted in the following pay run. If you choose not to carry it over, the unpaid RM50 deduction amount will be disregarded and in the following pay run only the recurring RM100 will be deducted.

(e) Carry forward unused preserved earnings: here you can choose whether or not you want any preserved earnings that are paid below the preserved earnings carried forward. For example, an employee has preserved earnings set at RM300. In one pay run the employee is only paid RM200 in net earnings. If this setting is ticked, the difference of RM100 will be carried over so that the preserved earnings for the next pay run will be RM400. 

Additional Notes:

1. Within the employee's Pay Run Inclusions page, you will see updates on any inclusions:

• that are set to expire once a certain dollar amount has been reached 
• that are set to expire after a particular date

2. To edit an existing pay run inclusion, simply click on the name and the settings will appear. Make the relevant changes and click on 'Save'.

3. To delete an existing pay run inclusion, hover your mouse over the inclusion so that the 'x' appears. Click on this icon and then click on 'OK'.

4. A note that has been added to a pay run inclusion will no longer appear on the employee's pay slip once the inclusion has expired. The YTD amount will still appear on the pay slip but any associated notes won't. The notes WILL still appear on any of the previous pay slips where the pay run inclusion was still active, as long as the 'show line notes' option on the 'Payroll settings' > 'Pay slips' page has been ticked.   

5. In order to set up recurring employee deductions, employer liabilities and expenses, the categories initially need to be created in Payroll Settings.