Difference between revisions of "Compensation Loss of Employment"
From eStream Software
|Line 2:||Line 2:|
For year of assessment in 2020 and 2021, the income tax exemption limit has increased from RM10,000 to RM20,000'''</big>
Latest revision as of 09:40, 26 March 2021
Update: For year of assessment in 2020 and 2021, the income tax exemption limit has increased from RM10,000 to RM20,000.
- 1. Compensation exempted from income tax is RM10,000 x no of years of service.
- 2. Determine the number of completed year of service. For example, employee has served for 5 completed year of service
- 1/5/2004 - 30/4/2005 (year 1)
- 1/5/2005 - 30/4/2006 (year 2)
- 1/5/2006 - 30/4/2007 (year 3)
- 1/5/2007 - 30/4/2008 (year 4)
- 1/5/2008 - 30/4/2009 (year 5)
- 1/5/2009 - 25/3/2010 (n/a, less than one completed year of service)
- 3. Tax exemption on compensation
- RM10,000 x 5 years of service = RM50,000
- Compensation paid (key in Pending Compensation) = RM75,0000
- Less: Amount of exemption RM50,000.00
- Balance of compensation subject to MTD RM25,000.00
- Balance of compensation of RM25,000.00 after deducting the qualifying exemption will be subject to MTD and the MTD shall be calculated using Additional Remuneration PCB (A) Formula and report in EA form (B6).
Menu : Payroll | Open Pending Payroll...
Menu : Payroll | New Payroll...
Menu : Payroll | Government Reports | Print Income Tax EA Form...
- Compensation paid = RM75,0000
- Less: Amount of exemption = RM50,000.00
- Balance of compensation taxable will be shown in EA (B6) = RM25,000.00