Levy Calculation Guideline
Section 2 of the PSMB Act 2001
Employee
Any citizen of Malaysia who is employed for wages under a contract of service (under full-time employment whether contract or permanent staff) with an employer, but does not include any domestic servant. If the company director/owner/partner is paid a salary, he/she is regarded as an employee of the company, whereas a director who only accepts director fees is not considered an employee.
Wages
Basic salary and fixed allowance or other similar emoluments of a like
nature paid in cash by or on behalf of an employer to an employee (only for full-time employment whether contract or permanent staff) and includes
any leave pay and arrears of wages but DOES NOT INCLUDE : -
-any pension fund, retrenchment ..."
-any travelling allowance or the value of any travelling concession … ”
-any allowances paid under apprentice contract.
Example of wages Exempted from Levy Calculation:
-Bonuses and commissions
-Gratuity on discharge or retirements
-Fund/scheme contribution to employee benefits or welfare.
-Travel allowances including petrol and transport allowances
-Apprenticeship
-Special expenses
Example of non-fixed allowance Exempted from Levy Calculation:
-Overtime payment
-Night work allowance
-Shift allowance
-Attendance allowance (for which the amount changes from month-to=month)
-Production incentive
-Other similar types of allowances
Example : Current Levy
Levy month = Salary month
01/2022 = January 2022
-Payment before or on 15/2/2022, payment within 15 days of the following month;
-Payment made after 15 days of the following month becomes levy in arrears due to exceeding the stipulated period.
SAMPLE LEVY CALCULATION
LEVY = [(BASIC SALARY - UNPAID LEAVE) + FIXED ALLOWANCE] x 1%
**2 decimal place
Section 14 of the PSMB Act 2001
Every employer to whom this act applies shall be subject to human resources development levy at 1% of the monthly wage of the employee.
Section 15 of the PSMB Act 2001
An employer with less than the required minimum number of employees, may opt to be registered in the class specified in Part II of the First Schedule, and shall pay a levy for each of his employee at the rate of 0.5% of the monthly wages of the employee.