Example 4.1: Salaries and Wages
Assuming an employee earns a wage of RM2000 a month, the rate of EPF contribution is
11% for the employee’s share and 13% for the employer’s share payable (payable to EPF
in the following month).
Solution:
In the Statement of Profit or Loss, the entity charges the contribution payable of RM260
(RM2000 x 13% x 12) for January, whereas the contributions paid by the employee of
RM220 (RM2000 x 11% x 12) will be part of the wages and salaries cost, and when paid,
will reduce cash because it is consider as expenses to the company.
Example 4.2: Paid Annual Leave
A car manufacturer paid wages and salaries of RM500,000 in the year to 31 December
2015.There were 80 days of annual leave that were not taken in this period. The financial
cost of this is estimated to be RM30,000.
