COMPLETE PAYROLL SYSTEM GUIDE

Payroll System Setup with Automatic EPF, SOCSO, EIS & PCB Calculations

Complete guide to configuring your payroll system with automatic statutory calculations, tax deductions, compliance management, and salary processing for Malaysia.

System Setup Statutory Setup Calculations
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Introduction Payroll Setup Statutory Configuration Automatic Calculations Employee Setup Payroll Processing Reports & Compliance Best Practices

Payroll System Overview

BizCloud HRM provides a comprehensive payroll management system with automatic statutory calculations (EPF, SOCSO, EIS, PCB), tax compliance, and seamless integration with attendance and leave systems.

Key Features:
  • Automatic EPF, SOCSO, EIS, PCB calculations
  • Multiple income types and allowances configuration
  • Custom deductions and benefits management
  • Real-time payroll processing and preview
  • Bank file generation for salary transfers
  • Comprehensive payroll reports and analytics
  • Year-end tax reporting (EA Form, E Filing)
  • Multi-company and multi-branch payroll
Statutory Components:
EPF (KWSP) SOCSO (Perkeso) EIS PCB (LHDN) Tax Calculations Deductions

All statutory calculations are automatically updated when government rates change. System automatically applies the correct rates based on salary thresholds.

Payroll System Setup

1Initial Payroll Configuration

  1. Access Payroll Settings: Go to HR > Payroll Setting
  2. Configure Company Details: Enter company registration number, tax reference
  3. Set Pay Period: Define monthly, bi-weekly, or custom pay periods
  4. Configure Payment Methods: Bank transfer, cash, cheque options
  5. Set Default Salary Components: Basic salary, allowances, overtime rates
Recommended Settings:
• Pay Period: Monthly (1st to last day of month)
• Payment Date: Last working day of month
• Payment Method: Bank Transfer (default)
• Currency: MYR (Malaysian Ringgit)

Ensure your company registration details match EPF/SOCSO registrations to avoid compliance issues.

2Income Types Configuration

  1. Navigate to: HR > Payroll Setting > Income List
  2. View all income types and their statutory effects
  3. Configure each income type: Check/uncheck EPF, SOCSO, PCB, EIS boxes
  4. Common Income Types:
    • Basic Salary (affects all statutory)
    • Allowances (configure per type)
    • Overtime (usually affects EPF only)
    • Bonus (special rates may apply)
    • Backpay (configure statutory effects)
  5. Click Submit to save changes

Important: Some income types (like Backpay) may not affect statutory contributions by default. Configure based on your company policy and legal requirements.

3Bank & Payment Setup

  1. Configure Company Bank Account: For salary payments
  2. Set up Bank File Formats: CIMB, Maybank, Public Bank, etc.
  3. Configure Employee Bank Details: Bulk upload or individual entry
  4. Set Payment Approval Workflow: Single or multi-level approval
  5. Test Bank File Generation: Generate sample files for testing

System supports all major Malaysian bank formats. Automatic validation of bank account numbers to prevent payment errors.

Statutory Configuration

EPF (KWSP)

Employees' Provident Fund

Employee: 11% of salary

Employer: 12-13% of salary

SOCSO (Perkeso)

Social Security Organization

Categories: Employment Injury & Invalidity Scheme

Salary Cap: RM5,000 per month

EIS

Employment Insurance System

Employee: 0.2% of salary

Employer: 0.2% of salary

Salary Cap: RM5,000 per month

PCB (LHDN)

Monthly Tax Deductions

Threshold: RM2,500+ monthly

Calculation: Based on MTD tables

Annual Reconciliation: EA Form submission

1Add Government Legislation Tables

  1. Navigate to: HR > Company Setting > Gov. Legislation
  2. Click "Add More" button
  3. Fill in new table information:
    • Table Name (e.g., "EIS/SIP Table 2024")
    • Effective Date
    • Statutory Type (EPF, SOCSO, EIS, PCB)
    • Upload rate table file or enter manually
  4. Click "Add" button to save

Repeat for KWSP (EPF) or Perkeso (SOCSO) when new tables are released by government bodies. System will notify you when updates are available.

2Tax & Deduction Configuration

Add New Tax/Deduction:
  1. Navigate to: HR > Payroll Setting > Tax/Deduction List
  2. Click "New Tax/Deduction" button
  3. Enter Details:
    • Title (e.g., "EIS 2024")
    • Type: Deduction
    • On: Employee
    • Default: No (set to Yes after verification)
    • Choose appropriate Reference table
  4. Click "Add" to save
Set Default Deduction:
  1. Find the deduction in Tax/Deduction List
  2. Click Edit
  3. Change Default to Yes
  4. Click Update

When set as default, this table reference will be used for automatic calculations in payroll processing.

Current Statutory Rates (2024)

Component Employee Rate Employer Rate Salary Cap Notes
EPF 11% 12% (≤ RM5,000)
13% (> RM5,000)		 No cap First home withdrawal allowed
SOCSO 0.5% - 1.75% 1.0% - 2.25% RM5,000 Two schemes: Employment Injury & Invalidity
EIS 0.2% 0.2% RM5,000 Job loss protection
PCB Variable N/A No cap Based on MTD calculator tables

Automatic Calculations

Gross Salary

Basic + Allowances + Overtime

Statutory

EPF, SOCSO, EIS deductions

Tax

PCB calculations

Deductions

Loans, advances, other

Net Salary

Final payable amount

Sample Calculation

Basic Salary
RM 4,000.00
Allowances
RM 500.00
Gross Salary
RM 4,500.00
EPF Employee (11%)
- RM 495.00
SOCSO Employee
- RM 24.75
EIS Employee (0.2%)
- RM 9.00
PCB (MTD)
- RM 150.00
Net Salary
RM 3,821.25

Employer Contributions

EPF Employer (12%)
RM 540.00
SOCSO Employer
RM 49.50
EIS Employer (0.2%)
RM 9.00
Total Employer Cost
RM 4,598.50
Salary Payable
RM 3,821.25
Employer Contributions
RM 598.50
Total Cost to Company
RM 5,098.50

Automatic Calculation Features

  • Automatic Rate Application: System applies correct rates based on salary thresholds
  • Pro-rata Calculations: For incomplete months, new hires, resignations
  • Overtime Calculations: Automatic OT rates (1.5x, 2x, 3x) based on working days
  • Bonus Calculations: Special statutory treatment for bonuses
  • Backpay Calculations: With correct statutory deductions
  • Loan Deductions: Automatic installment calculations
  • Advance Salary: Pro-rated recovery
  • Leave Encashment: Automatic calculation with correct taxation
  • Final Settlement: Automatic calculations for resignations
  • Year-End Adjustments: Automatic tax adjustments

Employee Payroll Setup

1Configure Employee Details

  1. Navigate to: Employee > Employee List
  2. Select employee > Action > Edit
  3. Go to Employment tab:
    • Select appropriate EIS Table (e.g., EIS 2024)
    • Set salary and payment details
    • Configure bank account information
    • Set tax status and reliefs
  4. Go to Payroll tab:
    • Set basic salary amount
    • Configure allowances and benefits
    • Set fixed deductions
    • Configure overtime eligibility
  5. Click Save

2Employee Payroll Configuration

  1. Go to: Employee > Employee Payroll
  2. Under "Generate Income System", tick the box to enable
  3. Select appropriate income types for the employee
  4. Add employee income type and default rate
  5. Configure statutory options:
    • EPF category (standard, optional rate, etc.)
    • SOCSO category based on salary
    • EIS eligibility
    • PCB status (single, married, number of children)
  6. Save configuration

Bulk Employee Setup Options

Excel Import:
  1. Download employee template
  2. Fill in payroll details in Excel
  3. Upload to system
  4. System validates and imports
  5. Review and confirm imports
Group Configuration:
  1. Create employee groups (by department, location)
  2. Apply payroll settings to group
  3. Individual overrides allowed
  4. Bulk updates for salary revisions

Payroll Processing

1Generate Payroll

  1. Navigate to: Employee > Employee Payroll
  2. Click "Generate Employee Payroll"
  3. Select pay period: Beginning and end dates
  4. Create payroll and select staff income
  5. Select contribution deductions: System pre-selects based on setup
  6. Click "Recalc" for automatic calculations
  7. Review calculations and make adjustments if needed
  8. Click "Save" to finalize

The "Recalc" button automatically calculates all statutory contributions, taxes, and net pay based on the latest government rates and employee configurations.

Payroll Processing Workflow

Step 1: Data Collection

Automatic import of attendance, overtime, leaves, claims

Step 2: Salary Calculation

Calculate basic salary, allowances, overtime, bonuses

Step 3: Statutory Deductions

Automatic EPF, SOCSO, EIS, PCB calculations

Step 4: Other Deductions

Loans, advances, voluntary deductions

Step 5: Net Pay Calculation

Final net salary calculation

Step 6: Approval Process

HR Manager > Finance > Director approval chain

Step 7: Bank File Generation

Generate bank transfer files

Step 8: Payment & Reporting

Process payments and generate reports

Approval Workflow Configuration

Single Level Approval:
  • HR Manager approves payroll
  • Direct payment processing
  • Suitable for small organizations
Multi-Level Approval:
  • HR Executive > HR Manager > Finance > Director
  • Each level can review and approve
  • Audit trail of all approvals
  • Email notifications at each stage

Reports & Compliance

Payroll Register

Detailed employee-wise payroll with all components and deductions.

EPF Forms (A & 8A)

Monthly EPF contribution statements ready for submission to KWSP.

SOCSO Forms

Monthly SOCSO contribution reports for Perkeso submission.

PCB Reports

Monthly tax deduction reports for LHDN submission (CP39, CP8A).

Bank Transfer Report

Bank-wise salary transfer summary and transaction details.

Compliance Report

Statutory compliance status and pending submissions.

1Year-End Tax Processing

  1. EA Form Generation: Automatic generation for all employees
  2. Tax Reconciliation: Compare PCB deducted vs tax payable
  3. E-Filing Preparation: Prepare data for LHDN e-filing
  4. Employee Statements: Provide employees with tax statements
  5. Annual Returns: Prepare annual returns for EPF/SOCSO

System provides year-end checklist and timeline to ensure all statutory submissions are completed on time.

Compliance Dashboard

EPF Compliance
Compliant

Last submission: 28 Feb 2024

Next due: 15 Mar 2024

SOCSO Compliance
Compliant

Last submission: 30 Jan 2024

Next due: 15 Mar 2024

PCB Compliance
Due Soon

Last submission: 31 Jan 2024

Next due: 10 Mar 2024

Best Practices

Implementation Best Practices
  • Conduct parallel run for first 3 months with old system
  • Verify all statutory rates are current and accurate
  • Train payroll staff on system features and reports
  • Establish clear approval workflows and backup approvers
  • Regularly backup payroll data
Data Management
  • Maintain updated employee records
  • Regularly review and update statutory tables
  • Keep audit trail of all payroll changes
  • Archive old payroll data annually
  • Implement data validation rules
Compliance Best Practices
  • Submit statutory payments before due dates
  • Keep copies of all submission receipts
  • Regularly audit payroll calculations
  • Stay updated on legislative changes
  • Conduct internal compliance reviews quarterly
For Management
  • Review payroll cost analysis monthly
  • Analyze overtime trends and costs
  • Benchmark payroll costs against industry
  • Use payroll data for budgeting
  • Review compliance status quarterly
Monthly Payroll Checklist
Before Processing:
  • Verify attendance and overtime data
  • Update new hires and resignations
  • Check statutory rate updates
  • Review employee changes
After Processing:
  • Generate and review payroll reports
  • Submit statutory contributions
  • Process salary payments
  • Archive payroll data
  • Provide payslips to employees

Need Help With Payroll System Setup?

Our payroll specialists can help you configure statutory calculations, set up automatic payroll processing, ensure compliance with Malaysian regulations, and train your staff on payroll management.

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