Understanding Global Payroll for Malaysia

Global Payroll for Malaysia is a country extension of the core Global Payroll application. It provides the payroll rules and elements that are needed to run a Malaysian payroll.

This chapter discusses:

• Global Payroll for Malaysia business processes.

• Delivered elements for Malaysia.

• Naming conventions for delivered elements.

• How to view delivered elements.

• Data archiving.

Global Payroll for Malaysia Business Processes

Global Payroll for Malaysia supports the following business processes:

• Taxation.

  Global Payroll for Malaysia comes with all the elements that are required to correctly calculate a payee's tax. Whatever the scenario—tax exemptions, pretax benefits, dependent's rebates, contributions to Zakat, CP38 tax payment, multiple payments within a calendar period, annualized tax, previous year tax, mid-period hires or terminations, or multiple jobs—the system calculates the appropriate tax.

  The system also enables you to manage benefits in kind, such as automobile and housing benefits, to be used in CP8A reporting.

• Banking and recipient processing.

  This feature supports net payment (employee salary) direct deposits and recipient payments using an electronic file format. Global Payroll for Malaysia generates electronic file outputs to credit employee salaries, and it reports this data to the recipient.

  The banking process of Global Payroll combines payroll data, pay entity source bank data, and payee or recipient bank data. The file creation process for electronic funds transfer (EFT) extracts data that is compiled by the banking process according to the content that you specify for the EFT file, merges it with data that is provided by Global Payroll for Malaysia, and creates the file for transmission.

  With the banking and recipient processing functionality, you can:

  • Select from multiple options for the content of the EFT file.

  • Create an EFT file.

  • Create files for the submission of recipient payment data in the recipient's electronic file format.

• Payslip printing and viewing.

  Global Payroll for Malaysia comes with a generic payslip template, which you can use as a pattern when you create your own payslip templates.

  The payslip feature enables you to design payslips so that they use the proper format to display the data that you specify. You can override templates at lower levels, so you do not have to create multiple templates to cover every payslip scenario.

  The payslip feature enables you to:

  • Create payslip templates and payslip messages in which you can specify accumulator column headings (such as Gross, Tax, and Net), row labels for columns (such as Period to Date and Year to Date), sections for grouping earnings and deductions, earnings and deductions that appear on payslips, and delivery option overrides.

  • Specify the absence entitlement to appear on the payslip.

  • Attach payslip templates to pay groups.

• Payroll reporting.

  In addition to the reports that are delivered with Global Payroll, the country-specific extension for Malaysia provides a set of reports that support Malaysian business requirements.

  Reports included in Global Payroll for Malaysia are:

  • Payroll Results Register MYS report.

  • Reconciliation MYS report.

  • Pay Component Register MYS report.

• General Ledger interface.

  The General Ledger interface (GLI) functionality for Malaysia builds on the standard GLI functionality that is delivered with Global Payroll. Additional features for Malaysia include the Leave Liability report and the Absence History report.

  General Ledger functionality enables you to:

  • Cost employee leave entitlements.

  • Post accrual when pay periods do not match costing periods.

  • View General Ledger data on an online inquiry page.

  • Link journal types to General Ledger groupings so that you can create reports by journal type.

  • Calculate accrued salary and leave liability.

  • Report on leave liability and history.

  • Run the GLI processes.

• Absence processing.

  Global Payroll for Malaysia comes with predefined rules for processing absence payments, such as annual leave, sick leave, maternity leave, leave without pay, study leave, bereavement leave, and half pay suspension. It also comes with rules to calculate absence entitlements on termination, including rules for the payment of unused annual leave when leaves involve guaranteed termination payments.

  Absence requirements that are specific to Malaysia focus on the common business process and legislative requirements. Global Payroll for Malaysia comes with Malaysian accrual and take rules as customary data, and the rules are bound by Malaysian regulations. You can easily modify many of these rules to reflect absence policies that are specific to your organization.

  To demonstrate how Global Payroll can process typical absence requirements in Malaysia, the PeopleSoft system provides seven absence entitlements and eight absence take elements.

• Termination processing.

  The system enables you to manage the entire termination process, including the impact on the following functional areas: tax calculation, social security, Employee Provident Fund, absences, loans, festive advances, earnings and deductions, and General Ledger accrual calculations.

  The PeopleSoft terminations feature also enables you to:

  • Make a payment of deduction in lieu of notice period.

  • Freeze net pay payments that are linked to termination for retirement or to payees who leave Malaysia.

• Employee Provident Fund (EPF) contributions.

  This feature enables you to calculate, record, and report contributions for the EPF that are collected by the EPF board. The PeopleSoft system supports the requirements of EPF administration, maintenance, and reporting and provides:

  • Support for employee and employer payments to the EPF in accordance with the calculation of eligibility rules for EPF legislation.

  • Calculation of voluntary employee and employer EPF contributions.

  • Functionality for splitting the employee contribution into pre-tax and post-tax deductions.

  • Identification and management of unique company and employee identifiers.

  • A process that completes the EPF Form A containing all EPF monthly contributions for submission to the EPF board.

  • Reports that support administrative reporting in accordance with EPF requirements.

  • The EPF Summary report.

• Social Security Organization (SOCSO) contributions.

  To manage contributions to the SOCSO, the PeopleSoft application contains numerous tables, fields, and pages to maintain contribution data.

  The system:

  • Collects employer and employee data that is needed for calculations and reports.

  • Determines SOCSO contribution eligibility and scheme type.

  • Defines wages that are used for SOCSO.

  • Calculates SOCSO contributions.

  • Prepares the SOCSO Summary Report.

  • Produces the following reports: SOCSO Form 2, the employee register report; SOCSO Form 8A, containing the details of all contributions for the given period that is associated with the employer's SOCSO number; SOCSO Form 8B, which lists SOCSO arrears contributions for employees with arrears contributions for a given period; SOCSO Form 3, containing the details of all payees who have been terminated in the given month.

• Inland Revenue reporting.

  This feature enables you to capture, generate, and maintain both employee and company identification and biographical data that supports the reporting requirements of the Inland Revenue Board (IRB).

  Reporting functionality for Malaysian Inland Revenue enables you to create the following reports as required by the IRB for reporting: annual tax statements (CP8A), notification of an employee's intention to leave Malaysia (CP21), new employees (CP22), employee termination (CP22A), monthly taxation deductions (CP39), the individual statement of tax deductions by month with tax receipt number (PCB2), and the annual report that identifies all payees and their total remuneration and total deductions for the year (Form E). You can also generate the annual statement of tax deductions (CP159 and CP159A).

• Loan processing.

  Many companies in Malaysia offer loans to their employees to meet short-term and long-term financial needs. The company recovers the loan over a period of time through equated monthly installments that are deducted from the payroll. This feature also includes straight-line loan interest calculation. Global Payroll for Malaysia enables you to maintain and track these loans by:

  • Defining different loan types such as home, car, and personal loans.

  • Defining the repayment span and the interest rate.

  • Calculating the repayment deduction by pay frequency or by mutual agreement.

  • Updating loan balances.

• Integration with the Administer Festive Advance business process of HR.

  This feature provides integration between HR and Global Payroll, which enables you to take the festive advance amounts that are calculated in HR and post them to Global Payroll. It also enables you to update the festive advance status in HR. Festive advance payments are made during the payroll period in which they are issued and are deducted from the following pay period.

Delivered Elements

Global Payroll defines each business process for Malaysia in terms of delivered elements and rules. Some of these elements and rules are specifically designed to meet legal requirements, while others support common or so-called customary payroll practices.

This section discusses:

• Creation of delivered elements.

• Element ownership and maintenance.

Creation of Delivered Elements

All elements and rules that are delivered with the country extension were created using the core application, the same application that you use both to create additional elements or rules and (in many cases) to configure existing elements that are part of the Global Payroll system. Because the tools that are needed to redefine or create new payroll elements are fully documented in the core application PeopleBook, the information does not appear here. Instead, this PeopleBook briefly reviews the relationship between the core application (which contains the tools that you need to define your own elements and rules) and the country extensions (which contain country-specific rules and elements that are predefined in the PeopleSoft system).

The core application has the following characteristics:

• It consists of a payroll rules engine, which is a flexible tool that enables users to define the rules and elements of their payroll system and run payroll and absence calculations.

  Global Payroll does not have payroll-specific logic or computations embedded in application code. Instead, all business application logic, such as earnings, deductions, absences, and accumulators, are specified in terms of payroll rules and elements. Global Payroll enables the user to enter and maintain payroll rules by using pages, and it offers a comprehensive set of features that enable users to work in their preferred language or currency.

• It provides a payroll processing framework, which is a flexible way to define and carry out payroll and absence processing flows, such as calendars, run types, pay periods, and process lists.

Country extensions have the following characteristics:

• They are built using the core application.

• They consist of statutory and customary objects (country-specific payroll rules, elements, payroll processes, reports, pages, and self-service applications).

Element Ownership and Maintenance

The delivered elements and rules of the Global Payroll country extension for Malaysia are classified based on whether they are owned and maintained by the user or whether they are predefined in the PeopleSoft system. Some elements and rules are predefined in the PeopleSoft system and cannot be modified or reconfigured. Others can be configured to meet requirements that are unique to a particular organization.

Element Ownership in Global Payroll

Global Payroll has the following five categories of element ownership:

Element Ownership in Global Payroll for Malaysia

The elements in Global Payroll for Malaysia have only two of the preceding five categories:

• PeopleSoft-delivered and maintained.

• PeopleSoft-delivered but not maintained.

In general, Global Payroll for Malaysia mostly uses elements that are PeopleSoft-delivered and maintained, unless the modification of an element might interfere with calculations that satisfy legislative requirements. Elements that are PeopleSoft-delivered but not maintained enable you to modify, update, and reconfigure the delivered elements to meet needs that are specific to your organization.

The following table contains a feature-by-feature description of element ownership and maintenance in Global Payroll for Malaysia:

Note. Accumulators that contain custom elements may have an ownership status different from those listed here.

See Also

Defining Element Names

Naming Conventions for Delivered Elements

Understanding the naming conventions for PeopleSoft-delivered elements enables you to determine how an element is used, the element type, and even the functional area that it serves. Depending on whether the element is a primary element, a component of a primary element, or a supporting element, either the naming convention for the supporting element or the naming convention for the component-name (suffix) applies.

This section discusses:

• Differences between the naming conventions.

• Functional codes for Malaysia.

• Element type codes (PIN_TYPE).

Differences Between the Naming Conventions

This section describes the naming convention for supporting elements and the naming convention for component names.

Supporting Elements

Global Payroll for Malaysia uses the supporting element naming convention for arrays, brackets, counts, dates, durations, formulas, rate codes, variables, historical rules, fictitious calculation rules, proration rules, rounding rules, accumulators, sections, element groups, and generation control conditions.

The format for supporting element names is:

FFF TT NAME

where FFF is the functional area code, TT is the type of supporting element, and NAME is a descriptive name. For example, in the Social Insurance variable SOC VR CONTRIB ER, SOC represents the functional area (SOCSO), VR represents the element type (variable), and CONTRIB ER stands for employer contribution.

Component Names (Suffixes)

When you create an earning or deduction element in Global Payroll, you must define the components that make up the element, such as base, rate, unit, and percentage. The system generates the components and accumulators for the element based on the calculation rule or accumulator periods. The system also names the components and accumulators by appending a suffix to the element name. This table describes the component suffixes:

For example, you define the earning element EARN1 with the following calculation rule:

EARN1 = Rate × Unit

The system creates two additional elements for the components in the calculation rule: a rate element called EARN1_RATE and a unit element called EARN1_UNIT.

In Global Payroll for Malaysia, all suffixes are grouped into one of the following types:

• Separator.

• Earnings and deductions component suffixes.

• Earnings and deductions accumulator suffixes.

• Deduction arrears component suffixes.

The following table describes the accumulator suffixes:

The following table describes the arrears components suffixes:

The following table describes the arrears accumulator suffix:

The following table describes the component suffixes that are required for absences:

The following table describes the accumulator suffixes that are required for absences:

See Also

Defining Earning and Deduction Elements

Functional Codes

The following table contains the functional area codes that are used in the names of Malaysian elements:

Element Type Codes (PIN_TYPE)

The following table contains codes for all the element types. Because not all element types are delivered for Malaysia, not all of these codes appear in the names of Malaysian elements.

How to View Delivered Elements

The PeopleSoft system delivers a query that you can run to view the names of all delivered elements designed for Malaysia. Instructions for running the query are provided in the PeopleSoft Global Payroll PeopleBook.

See Also

Understanding How to View Delivered Elements

Data Archiving

Global Payroll for Malaysia generates a large amount of result data which you may need to maintain for auditing or regulatory purposes, and which should periodically be archived. To facilitate this requirement, PeopleSoft PeopleTools delivers an archiving tool called the Data Archive Manager. To aid in archiving your data, Global Payroll for Malaysia delivers a predefined archive object (GPMY_RSLT_ARCHIVE) and an archive template (GPMYRSLT) created using the Data Archive Manager. The archive template uses queries to select and store data by calendar group ID from calculation, banking, and other tables.

Note. Please use extreme caution when making changes to delivered archive objects, queries, or templates. Any modifications can result in the loss of important data.

See Also

Archiving Data