Payroll documentation serves as sources for the figures used in payroll calculations. Even if you were to outsource your payroll processing, you still need to maintain payroll documentation for each employee, and provide them to your payroll services vendor for their reference in calculating monthly pay.
The most common documentation kept by companies in Malaysia are the following:
Other than for payroll purposes, you need to retain these records for at least seven (7) years for tax purposes.
Employment Letters
Employment letters are basically contracts that outline the terms and conditions for employment when hiring an individual into your company.
For payroll purposes, details that are most relevant include:
If the employee has received a raise in salary, please attached the letter confirming the raise to the employment letter, so that processors could know the employee’s latest basic salary figure.
From time to time, it is advisable for you to carry out a review of current active employee files against actual employees who are presently working. This is to ensure that only present employees continue their earned wages, with terminated employees receiving their earned wages up to the last working day.
Commission Slips
Commission slips states the amount of commission that an employee is entitled to because of a sales made. The important thing to remember is to have commission slips verified for authenticity and accuracy by the employee’s direct superior, and also double-checked by the payroll staff and finance staff. This is to ensure that no fake commission slips gets used in payroll calculations.
Expense Claim Slip
Expense claim slips states the amount of spending that employees incurred while on duty. Expense claims must be backed by receipts or invoices. Please ensure that all expense claim slips are enclosed with supporting documents, and then validated by the employee’s diret superior as well as HR.
Other Documents
Other documents are one-off but are still important. They include the following:
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