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Saturday, January 5, 2013

Another PCB or Scheduled Tax Deduction (STD) for Bonus Calculation

We are now in another new year, or financial year and many of us are just 2-3 months for tax submission. However, there are just still so many of us who are questioning how our scheduled tax deduction (STD) or PCB is calculated as most of the time we are getting different deduction.

It is not a surprise as majority working class are having fixed monthly salary, but at the same time on and off we are getting bonuses from our employers. These bonuses are the reason why we are getting different scheduled tax deduction on certain month when we have bonus.

I posted twice on how these are calculated on
Calculating PCB or  Schedular Tax Deduction (STD) for Salary and Bonus and
How to Calculate PCB or Scheduled Tax Deduction (STD) for Salary and Bonus

Anyway, since I'm still getting emails on the calculation, I will use the example from the email so that the reader can understand it based on his or her salary and bonuses.
Assuming A is getting a salary of RM3,000 and have RM24 deducted monthly for tax.
One of the month A is getting RM10,000 and RM1,100 will be deducted for EPF.
Based on this, we can have 2 conclusion, either the bonus is RM10,000 and another is RM7,000 (from RM10,000 - RM3, 000)

In this case, I will take bonus as RM10,000.

Monthly Salary = RM3,000
Monthly EPF = RM330
Net Salary = RM2,670 (Monthly Salary - Monthly EPF)
PCB from the PCB table = RM24

Next we have another RM10,000 which is the bonus.
Bonus = RM10,000
EPF = RM1,100
Annual EPF deduction allowable is RM6,000; thus each month EPF allowable is RM500 (RM6,000 / 12)
EPF remaining for bonus deduction = RM500 - RM330  = RM170
Gross Bonus for PCB = RM10,000 - RM170 = RM9,830
The amount for bonus PCB calculation has a formula like the following:-
= (1/12 x net_bonus) + net_salary
= (1/12 x RM9,830) + RM2,670
= RM3,489.17

PCB from the PCB table for RM 3,49.17 = RM80
PCB for bonus = (RM80 - RM24) x 12 = RM672

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