How to Calculate Salary: A Simple Guide for Employees

Surprising fact: in Malaysia, over 70% of workers find their take-home pay lower than expected when deductions are applied.

You start with your gross salary and then see mandatory cuts like EPF, SOCSO, EIS, and monthly tax (PCB). These items shape the final amount that lands in your bank each month.

This short guide gives a simple, practical route for estimating your monthly salary. You’ll learn which deductions matter, where they show on a payslip, and when to use working days versus calendar days for prorations.

If you want a quick check or extra help, use a trusted payroll calculator or reach out via WhatsApp for guidance: +6019-3156508. For consulting support, see our payroll consultants.

• Begin with gross salary and subtract EPF, SOCSO, EIS, and PCB to find net pay.
• Payslip layout reveals monthly components that affect your final amount.
• Use working days for prorations when the contract or payroll requires it.
• Local payroll solutions approved by LHDN help ensure compliance and accuracy.
• Check official contribution rates before finalizing any estimate.
• Reach out for a quick review via WhatsApp if an offer looks unclear.

In Malaysia, a monthly pay arrangement usually means a fixed sum that isn’t tied to each hour you work.

Salary typically refers to steady monthly pay for employees who fulfil duties within agreed work patterns. Wages are hourly and often earn overtime when hours exceed a limit.

Employers must match offers with the Employment Act 1955 and the Minimum Wages Order 2022, which sets a common minimum monthly rate of RM1,500 for most workers.

Gross salary is the total before deductions. Net pay is the amount you actually receive after EPF, SOCSO, EIS, and tax. Confusing these can cause budgeting errors.

Your employment contract should list basic salary, allowances, and any performance components so you can check compliance with company and statutory rules.

Start by listing your monthly pay components, then remove statutory contributions and tax to see the net amount that arrives in your bank.

Quick formula: Net = gross salary minus mandatory deductions.

First, copy the basic pay and recurring allowances from your offer letter. This gives the gross salary number you will use in the calculation.

Next, subtract employee EPF, SOCSO and EIS. Use a Malaysia-focused calculator for precise rates; PayrollPanda is an LHDN-approved option that automates contributions and produces compliant payslips.

Then estimate monthly tax (PCB) based on your reliefs and bracket. If a tool lacks PCB, remove contributions first and use LHDN guidelines or past payslips to fill the gap.

Validate the result against your first payslip. If the salary calculated differs, check which allowances are EPF-subject and confirm employer vs employee portions.

Mandatory monthly deductions shape the final net amount you receive each payday. These contributions protect you now and in future events, but they also reduce the disposable amount from your gross salary.

EPF is a retirement fund where both employee and employer contribute. Your employee portion is deducted from your gross pay and lowers the net amount you see.

Employer contributions do not reduce your take-home pay but appear on your payslip. Rates vary by age and policy, so confirm the current rate before finalising any calculations.

SOCSO gives social security for workplace injuries and invalidity. EIS supports income loss when retrenched and funds re-employment programs.

Both require monthly contributions from employee and employer. Each small deduction still affects the final salary figure, and contribution ceilings or tiers can change the number as earnings rise.

PCB depends on taxable income, reliefs, and marital status. Some Malaysian calculator tools break down EPF, SOCSO and EIS automatically, while others are updating PCB logic.

Tip: use an LHDN-approved tool like PayrollPanda for compliant payslips and clearer visibility of each deduction and the net amount.

Prorating pay is about matching what you earn with the exact days you worked in a given month.

Decide the base before you start. Some employers use working days; others use calendar days. That choice changes the per day figure and affects unpaid leave deductions.

Use a clear formula: (monthly salary ÷ number days month) × days worked. For example, RM4,000 ÷ 31 × 17 = RM2,193.55. Many companies prefer calendar days for joining and resignation.

Unpaid leave is usually deducted per day using the agreed base. If your employer uses working days, the per day value will be higher than the calendar-day approach.

Quick checklist

• Confirm whether HR uses working days or calendar days before you calculate salary per day.
• Check if allowances are prorated or excluded from the daily base.
• Match the same base for joining, resignation, and unpaid leave for consistency.

Some companies count only working days while others divide by the full days month — the result is not the same for every worker. You should confirm which method your employer uses so you can check payslips and spot errors quickly.

If a firm uses the calendar base, the per-day rate will be lower than when using working days. That means unpaid leave or mid-month moves change net take differently, depending on the chosen base.

Company policies set the default for prorations and hours, but they must meet or exceed protections in the Employment Act 1955 and the Minimum Wages Order.

If a handbook is silent, HR should apply a consistent method across similar roles. If an internal rule undercuts the act 1955 or minimum rate, statutory terms prevail and you should raise the issue.

• Confirm whether your firm uses number working or number days for partial months.
• Ask for written rules on whether allowances are prorated using the same base.
• Document hours and shift rates so you can verify overtime and partial-month pay.

Overtime and extra allowances can lift your monthly gross while also changing the deductions that follow.

When you work extra hours, overtime adds directly to gross salary and can boost your pay that month.

Be aware: a bigger gross may push up contributions and monthly tax, so the net increase might be smaller than you expect.

Contributions like EPF, SOCSO, and EIS are deducted from employees each pay cycle. The employer portion does not reduce your take-home amount.

Practical tip: confirm which allowances are EPF-subject with HR, since some variable payments count and others do not.

• Overtime raises gross but can slightly increase deductions and tax.
• Keep basic salary separate from variable items when you model net pay.
• Use a Malaysia-focused calculator to test scenarios before payroll closes.
• Review your payslip line by line so deductions match the rules for your job.

A Malaysia-focused payroll tool gives a quick, line-by-line preview of contributions and net take-home amounts. It shows EPF, SOCSO and EIS deductions and highlights where larger changes may appear.

Use a local calculator that asks for your gross monthly figure and residential status. That input produces a clear split of EPF, SOCSO and EIS and the resulting net amount.

If a tool notes PCB updates are pending, treat results as an estimate and confirm tax lines with LHDN tables or HR. An LHDN-approved payroll solution such as PayrollPanda automates contributions and generates compliant payslips.

If numbers look odd, keep a record of your inputs and compare them with your payslip. You can model an example by adding an allowance or changing gross to see how EPF and EIS shift and how the net amount changes.

• Enter gross monthly figure and residential status for a fast split of contributions.
• Compare the calculator output with your payslip and note any variance.
• Use an approved payroll system for compliance and automated payslip generation.
• If uncertain, reach out on WhatsApp for a quick walkthrough and interpretation.

Try a simple online test with a trusted checker such as a paycheck calculator and then verify results with PayrollPanda or HR for the final amount.

Knowing per day rules and deduction flows helps you judge pay fairness and plan your budget. Start from gross salary, then deduct EPF, SOCSO, EIS and monthly tax (PCB) to reach the net figure you can expect.

confirm whether your company uses working days or calendar days for prorations. The number days month matters: it can change your salary per day and the size of unpaid leave deductions.

Use a Malaysia-focused calculator or an LHDN-approved payroll tool for clear splits of contributions and an accurate monthly salary estimate. Keep your employment contract and payslip handy, and if you need personal help, message us on WhatsApp: +6019-3156508.