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How Payroll Works

Running payroll means working out how much each employee should be paid for a period (usually a month), after adding any extras and taking off any deductions and statutory contributions.

AI Payroll does the hard maths for you. Your job is mainly to make sure the right information goes in.

The big picture​

A typical month looks like this:

  1. Check your employees are up to date. New joiners added, leavers marked inactive, salaries correct.
  2. Add any payroll items. These are the one-off or recurring extras and deductions for the month — bonuses, allowances, overtime, loans, advances and so on. See Payroll Items.
  3. Run payroll. The system calculates each employee's pay, contributions and tax. See Running Payroll.
  4. Review and confirm. Check the results, then finalise the run.
  5. Produce payslips and reports. Print payslips for staff and the forms you submit to the authorities. See Reports.

What the system works out for you​

  • Gross pay — basic salary plus allowances, overtime, bonuses and other earnings.
  • Statutory contributions — EPF, SOCSO and EIS for both the employee and the employer.
  • Tax (PCB / MTD) — the monthly tax deduction.
  • Other deductions — loans, advances and anything else you have added.
  • Net pay — the final amount the employee takes home.
note

The contribution and tax rates are already built into the system and kept up to date under Payroll Setup. You normally do not need to change them — see Payroll Setup.

tip

Think of payroll as two stages: prepare (get all the numbers in) and process (let the system calculate). Most mistakes happen in the prepare stage, so it is worth checking your employee details and payroll items before you run.