Use this checklist when creating deduction items in Tools > Payroll Item > Deduction. Proper deduction setup ensures payroll deductions are calculated accurately and reported correctly according to company policies and statutory requirements.
Checklist for Deduction Item Setup:
Code
A unique identifier used to identify the deduction type (e.g., LATE – Lateness Deduction).
Description
The full name or description of the deduction. This description will be displayed in payroll transactions, reports, and employee records.
Start Period & End Period
Defines the validity period of the deduction.
Statutory (Pay EPF, SOCSO & EIS, Tax, HRDF)
Determine whether the deduction is included in statutory contribution calculations.
Pay EPF – Include the deduction amount in EPF contribution calculations.
Pay SOCSO & EIS – Include the deduction amount in SOCSO and EIS contribution calculations.
Pay Tax – Include the deduction amount in PCB (Monthly Tax Deduction) calculations.
Pay HRDF – Include the deduction amount in HRDF levy calculations.
EA Form Selection Field
Determines where the deduction should appear in the employee's EA Form for annual tax reporting purposes.
ℹ️ Note: For a deduction to appear in the EA Form, Pay Tax must be enabled. If Pay Tax is not selected, the deduction will not be included in EA Form reporting.