[Malaysia] FAQ: Handling Incorrect Statutory Contributions After Payroll Approval (Classic)

Occasionally, statutory contribution errors are identified after payroll has been approved and salaries have been disbursed. Follow the guidelines below to rectify these discrepancies based on your current filing status.

Scenario 1: Statutory contributions have NOT been paid to the government yet

If you caught the error before submitting the files and payments to the government portals, follow these steps to correct your reports and adjust the employee's next payout:

1. Note down the exact variance (the difference between the incorrect amount and the correct amount) before making any changes.

2. Revert the affected payroll back to Draft, adjust the contributions to the correct amounts. 

3. Approve the updated payroll report and generate the correct submission files for the government portals.

4. In the following month's payroll, create a non-taxable pay item to either deduct the overpaid amount or reimburse the underpaid amount to the employee.

Scenario 2: Statutory contributions HAVE been submitted to the government portal

If the incorrect funds have already been sent to the government:

• Contact the authorities: You must reach out directly to the respective government agencies (e.g., EPF, SOCSO, PCB/LHDN) to request an amendment or refund.

• Update your internal records: If the agency allows a refund or adjustment, follow the steps in Scenario 1 to correct your internal payroll reports and adjust the employee's next salary accordingly.