This guide will explain the difference between normal remuneration and additional remuneration for Malaysia payroll. Kindly refer to the details below:

A. Normal remuneration refers to monthly fixed remuneration paid to an employee whether the amount is fixed or variable. 

B. Additional remuneration is any payment paid to an employee either in one lump sum, periodical, in arrears, non fixed payment or any additional payment to a current month’s normal remuneration. The additional remuneration includes:

  • Overtime allowance

  • Bonus/incentive

  • Arrears of salary or any other arrears paid to an employee

  • Employee’s share option scheme (if employee opts for MTD deduction)

  • Tax borne by employer

  • Gratuity

  • Compensation for loss of employment

  • Ex-gratia

  • Director’s fee (not paid monthly)

  • Commissions

  • Allowances (variable amount either paid every month or not)

  • Any other payment in addition to normal remuneration for current month


The main difference between normal and additional remuneration will be the EPF calculation

The EPF for additional remuneration are calculated separately from normal remuneration in the LHDN PCB calculator. For example:

Salary: RM5000
EPF: RM550

Bonus: RM400

In the calculator, the EPF will be included in its own respective columns based on the remuneration type:

When creating a new pay item, you can select the remuneration type in the pay item settings. 

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