Malaysian Payroll System-Which Payroll Software is The Best in Malaysia?

Malaysian Payroll System

Malaysian payroll systems are the processes and procedures that Malaysian businesses use to manage the payment of salaries and wages to their employees. It entails determining the amount of pay owed to each employee based on parameters such as salary, working hours, deductions, and regulatory obligations.

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Here’s a quick rundown of Malaysia’s payroll system:

Employee Details

Employers keep detailed data on each employee, including their personal information, employment contract, salary, allowances, and benefits.

Salary Calculation

Employees’ pay are calculated by employers using criteria such as their base salary, overtime, bonuses, and allowances. Income tax, EPF (Employees Provident Fund) contributions, SOCSO (Social Security Organization) contributions, and other statutory deductions are also included.


Employers are responsible for deducting and remitting income tax from employees’ pay to the Inland Revenue Board (LHDN). The amount of tax deducted is determined by the employee’s earnings, tax rate, and tax breaks.

EPF Contributions

Employers remove a percentage of employees’ wages for payments to the EPF, a social security fund that provides employees with retirement savings. The employer also makes a matching contribution.

SOCSO Contributions

Employers contribute to SOCSO, which provides employees with social security protection against work-related injuries, impairments, and death. The contribution is calculated as a percentage of the employee’s annual wage.

Statutory Obligation

Employers must meet a variety of statutory obligations, including completing monthly tax reports, paying EPF and SOCSO contributions, and providing employees with statutory benefits such as annual leave, medical leave, and public holidays.

Payslips and Payroll Reports

Employers provide employees with payslips that contain their salary, allowances, deductions, and net pay. Payroll reports are prepared to track and record salary payments and deductions for the purposes of auditing and reporting.

Year-End Processes

Employers give annual tax statements (EA Form) to employees at the end of each year, outlining their earnings and tax deductions for the year. Employers must also submit supporting documentation to regulatory agencies for year-end reporting and compliance.

Which Payroll Software is The Best in Malaysia?

Choosing the best payroll software in Malaysia is dependent on a number of things, including your company’s specific demands and requirements. Here are some of the most popular payroll software alternatives in Malaysia:


PayrollPanda is a cloud-based payroll software tailored to Malaysian enterprises. It includes functions like automated salary computations, EPF and SOCSO calculations, tax calculations, leave management, and payslip production. It is well-known for its user-friendly interface and low cost, making it ideal for small and medium-sized businesses (SMEs).


Talenox is yet another cloud-based payroll software provider that serves Malaysian enterprises. Employee self-service, leave management, tax computations, and legislative compliance are all available. It connects with other HR management systems and has a user-friendly interface.

SQL Payroll

SQL Payroll is a complete payroll software solution utilized by Malaysian businesses of all kinds. Salary calculations, required contributions, leave management, tax computations, and reporting are all available. It offers customized modules to meet the needs of various industries.

Ramco Payroll

Ramco Payroll is a payroll and human resources software package that includes modules for payroll processing, time and attendance tracking, leave management, and tax compliance. It is appropriate for companies with sophisticated payroll needs and larger employee counts.

AutoCount Payroll

AutoCount Payroll is a Malaysian payroll software that provides features such as salary calculations, EPF and SOCSO contributions, tax calculations, and leave management. It works in tandem with AutoCount Accounting software to provide streamlined financial management.

MYOB Payroll

In Malaysia, MYOB Payroll is a popular payroll software. It offers features like salary calculations, leave management, statutory compliance, and tax calculations. It works with MYOB accounting software to simplify financial processes.

When selecting the finest payroll software for your corporation, consider your business needs, budget, scalability, user-friendliness, and customer support. Consider your company’s size, industry-specific regulations, and the complexity of your payroll processes. Additionally, before making a selection, you can investigate trial versions or request demos from software vendors to assess their fit for your organization.

Employers in Malaysia must stay current on labor laws, tax rules, and changes in statutory requirements to ensure correct payroll management and compliance.

It should be noted that the Malaysian payroll system is complex and can vary depending on factors such as firm size, industry, and particular requirements. To ensure accuracy and compliance with relevant requirements, it is advised that you speak with professionals or use dedicated payroll software.

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