What is the Maximum Salary Deduction Allowed by Law in Malaysia?
Learn about the maximum salary deduction limits in Malaysia, including rules on EPF, tax, and employer loan repayments.
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In Malaysia, the maximum salary deduction permitted by law varies based on the nature of the deduction. For ordinary deductions like social security (EPF) and tax (PCB), specific percentages apply. However, for other deductions like absence from work, it cannot exceed 50% of the monthly wages. For loan repayments or advances given by the employer, combined deductions also should not exceed 50% of the monthly wages. This ensures workers retain at least half of their salary for other living expenses.
FAQs & Answers
- What is the maximum percentage an employer can deduct from my salary in Malaysia? In Malaysia, deductions for loan repayments or advances by the employer cannot exceed 50% of your monthly wages to ensure you retain sufficient income for living expenses.
- Are statutory deductions like EPF and tax included in the 50% salary deduction limit? No, statutory deductions such as Employees Provident Fund (EPF) and tax (PCB) have specific separate percentage limits set by law and are not included in the 50% deduction cap for other types of deductions.
- Can my employer deduct my salary for days I am absent from work? Yes, employers may deduct salary for absences; however, these deductions along with loan repayments should not exceed 50% of your monthly wages.