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26/05/2009 09:05:09
Re: Terms for salary


I have joined a new company recently. I am a bit confused of the terms gross and nett salary. In my opinion,

gross salary = basic salary (which then deduct Employee EPF and income tax) + other allowances. Normally Employer 12% EPF will not be calculated into a gross salary. Am i correct?

Nett Salary = take home pay (means Employer will cover both EPF and tax deduction)

For example, if I were to agree with my employer of RM5,000 take home pay, which does not include 11% Employee EPF and 12% Employer EPF. and Tax will be deducted from the RM5,000. What would be my basic salary?

RM5000 x 11% = RM5,550 (is this my basic salary?)
RM5,550 x 12% = RM6,216 (do you call this gross salary?)

Please advise.

Thank you.
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KL Siew
26/05/2009 09:52:22
I don't see why should there be confusion.

1. How much is your basic salary? Lets say RM5000
2. How much is your allowance? Lets say RM500
Your gross salary = 5000+500 = 5500
Gross salary is the amount your earn in the month before any deductions. Your earnings may be basic salary+allowance+commission(if any)+overtime(if any).

Gross salary 5500 less 11%EPF, income tax. SOCSO, loan(if any) = Nett salary
Your pay slips will show your gross and nett salary.
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26/05/2009 11:00:55

I think your explanation is clear. I haven't received my pay slips yet, so that is why I need to clarify, my boss is too busy and don't have the time to sit down to discuss on this matter.

The problem is my gross salary is RM5,550. But in the contract, the company has put my gross salary as RM6,150 (as he wants the whole cost, which includes the 12% Employer EPF to be in the amount). However, when the third party HR, who does the payroll see this, they pay me based on RM6,150, so I get extra for the past 3 months!

I told my boss that he pays extra, and waiting to clarify with the third party HR. We had a small argument on the term used in the contract to avoid the company ended up paying extra to the employees, which i don't mind, but I am just being nice!

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KL Siew
26/05/2009 13:51:02
From what you have described, you may not be getting extra after all. It could be that your boss is not going to pay 12% EPF contribution to EPF but instead lets you have the amount which he charged from the 3rd party. He just let the 3rd party bear the 12% EPF cost. Clarify with your boss. I could be wrong.
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