This guide will assist you in creating a new allowance type and assigning it to an employee profile for payroll processing.
To create new allowance;
1. Go to Tools > General Maintenance > Allowance.
2. Click Add New located at the top right corner of the page.
3. Under the Setup section, enter the Allowance Code and Description.
You may select Assign to Employee to add the allowance as a fixed allowance in the employee’s profile for payroll processing.
The allowance will then appear under the Addition & Deduction section in the employee profile.
4. Under Settings section;
a. Set Proration and Validity
Decide whether the allowance should be prorated based on the employee’s joining date in their first month of employment.
Example: If the employee joined on 15/04/2025, the allowance will be prorated during payroll processing.
Formula example: (Days Worked / Calendar Days × Allowance Amount) = 16/30 × 200.
b. Define Start Period and End Period: If the allowance is period based, can set the start and end period accordingly.
c. Define Tax and Statutory Contributions:
If the allowance is tax-exempted, select the appropriate Tax Exemption Rule from the drop-down list.
Tick the relevant statutory contribution checkboxes (e.g., EPF, SOCSO & EIS, HRDF, Tax).
If the allowance is taxable, tick Pay Tax and select the corresponding EA Form field where the allowance should appear.
5.(Optional) Configure Formula or Fixed Amount.
You may create a custom formula based on your company’s policy to determine the allowance calculation.
If the allowance is a fixed amount, enter the value directly in the Formula box (e.g., 200).
6. Once all setup details are completed, click Save at the top-right corner of the page to save the new allowance.
By HanYang 251008, Azirah