Understanding Your Payslip

Decoding salary, deductions, and net pay

What is a payslip?

A payslip is a document from your employer showing how much you earned and what was deducted. You should get one every month.

Main parts of a payslip:

💰 Gross Salary: Your total salary before deductions
📉 Deductions: EPF, SOCSO, EIS, tax
✅ Net Pay: What you actually receive

Common deductions:

EPF: 11% of salary (retirement savings)
SOCSO: 0.5% (employment injury protection)
EIS: 0.2% (job loss insurance)
PCB/MTD: Monthly tax deduction (if applicable)

Simple formula:

Gross Salary - Deductions = Net Pay

Important:

✅ Check your payslip every month
✅ Keep all payslips (needed for loans, EPF claims)
✅ Tell HR if there are mistakes

Overview

A payslip (salary statement) is a legal document that details your earnings and deductions for a specific pay period. Under the Employment Act, employers must provide payslips to all employees.

Anatomy of a Malaysian Payslip

1. Earnings (What You Earn)

Basic Salary: Fixed monthly salary
Allowances: Housing, transport, phone, meal
Overtime (OT): Hours × OT rate
Commission: Sales-based earnings
Bonus: Performance or annual bonus

2. Deductions (What's Taken Out)

EPF (KWSP): 11% of gross salary (or 9% if opted)
SOCSO (PERKESO): 0.5% of insurable wages
EIS (SIP): 0.2% of insurable wages
PCB/MTD: Monthly tax deduction (if salary > threshold)
Unpaid Leave: Deduction for absent days

3. Employer Contributions (Not Deducted from You)

EPF: 12-13% of your salary
SOCSO: 1.25-1.75% of insurable wages
EIS: 0.2% of insurable wages

Calculation Example

Item	Amount (RM)
Basic Salary	4,000.00
Housing Allowance	500.00
Gross Salary	4,500.00
EPF (11%)	-495.00
SOCSO	-19.75
EIS	-9.00
NET PAY	3,976.25

Important Tips

✅ Verify EPF deduction matches 11% of gross
✅ Check OT calculation (1.5× hourly rate for normal days)
✅ Keep payslips for at least 7 years
✅ Report discrepancies to HR immediately

Legal Requirements

Under the Employment Act 1955, employers MUST:

Provide payslips on or before pay day
Itemize all earnings and deductions
Keep records for 7 years
Not make unauthorized deductions

Frequently Asked Questions

My employer doesn't give payslips. Is this legal?

No, it's illegal. Under the Employment Act, employers must provide itemized payslips. Report to JTK if your employer refuses.

How do I calculate my hourly rate for OT?

Hourly rate = (Monthly salary × 12) ÷ (52 weeks × 44 hours). OT on normal day = 1.5× hourly rate.

Can my employer deduct salary for mistakes or damages?

No, not without your written consent. Deductions for negligence require investigation and your agreement. Report to JTK if forced.

What if my net pay doesn't match my contract salary?

Check the deductions. EPF, SOCSO, EIS, and PCB are legal. If there are unauthorized deductions, ask HR for explanation or report to JTK.

Last updated: March 2026

Disclaimer: This guide provides general information only. Always verify with official sources for the most current information.