Fixed Deductions (Installment)

Recurring Deductions can be divided into two types:

1. Monthly deductions:

   1. Payment Schedule: Once a Month

      The full deduction amount stated in the Employment Contract will be deducted once per month.  Therefore, when processing the payroll, the salary details will show the deduction amount as shown in the employment contract.

      1. Example:

         Parking Fee Deduction: RM 150

         

         Payroll Parking Fee Deduction: RM 150

         

   2. Payment Schedule: Twice a Month

      The deduction amount stated in the Employment Contract will be split into 2 Deductions. In Payroll, the salary details will show the deduction amount per period equal to the deduction amount shown in the employment contract divided by 2.

      1. Example:

         Loan: RM 8,000

         

         Payroll Loan Deduction: RM 8,000/2= RM 4,000

         

   3. Payment Schedule: Weekly

      The deduction will follow the Weekly payroll cycle. In the Payroll, the salary details will show the deduction amount as shown in the employment contract.

      1. Example:

         Loan Amount: RM 500

         

         Payroll Loan Deduction: RM 500

         

         
         
2. Installment deductions:

   1. Payment Schedule: Once a Month

      Deduction= Total Recurring Deduction Amount/Number of months

      1. For example,

         Loan Amount: RM 10,000

         Repayment: 10 months

         

         Monthly Deduction= RM 10,000/10 = RM 1,000

         Month 1: Deduction RM 1,000; Remaining Balance: RM 9,000

         

         The employment contract will show the remaining recurring deduction for the loan as RM 9,000  and the number of repayment months as 9 months.

         

         
         

         Month 2: Deduction RM 1,000; Remaining Balance: RM 8,000

         The employment contract will show the remaining recurring deduction for the loan as RM 8,000  and the number of repayment months as 8 months. 

         
         

         Month 3: Deduction RM 1,000; Remaining Balance: RM 7,000

         The employment contract will show the remaining recurring deduction for the loan as RM  7,000 and the number of repayment months as 7 months.

   2. Payment Schedule: Twice a Month

      Deduction= (Total Recurring Deduction Amount/Months)/2

      1. Example:

         Loan Amount: RM 8,000

         Repayment: 4 months

         

         Monthly: RM 8,000/4 = RM 2,000

         Per Payroll: RM2,000/2 = RM 1,000

         
         

         Month 1

         First Installment:: Deduction:  RM 8,000 / 4 / 2 = RM 1,000

         

         The employment contract will show the remaining loan deduction as RM  7,000 and the repayment period as 3.5 months.

         

         
         

         Second Instalment: Deduction: RM  7,000 / 3.5 / 2 = RM 1,000.

         The employment contract will show the remaining loan deduction as RM 6,000 and the repayment period as 3 months.

         
         

         Month 2

         First Installment: The system calculates the deduction as RM 6,000 / 3 / 2 = RM 1,000.

         The employment contract will show the remaining loan deduction as RMM5,000 and the repayment period as 2.5 months.

         
         

         Second Installment: he system calculates the deduction as RM 5,000/ 2.5 / 2 = RM 1000.

         The employment contract will show the remaining loan deduction as RMM 3,000and the repayment period as 2.0 months.

   3. Payment Schedule: Weekly

      Deduction= Total Recurring Deduction Amount/Number of weeks

      1. For example,

         Loan Amount: RM 3,000

         Repayment: 3 weeks

         

         Week 1:Deduction: RM 3,000 / 3 = RM 1,000.

         

         The employment contract will show the remaining loan deduction as RM 2,000 and the repayment period as 2 weeks.

         

         
         

         Week 2: Deduction: RM  2,000 / 2 = RM 1,000.

         The employment contract will show the remaining loan deduction as RM 1,000 and the repayment period as 1 week.

         
         

3. However, this will change if the recurring deduction in the payroll details is modified. The recurring deduction amount in the employment contract will show the updated balance.

   For example,

   Loan Amount: RM 10,000

   Repayment 8 months

   

   Month 1:Deduction as RM 10,000 / 8 = RM 1,250.

   

   There has been a change in the loan amount in the salary details of Payroll from RM 1,250 to RM 3,500.

   

   The employment contract will then show the remaining recurring deduction for the loan as RM 6,500 (RM 10,000 - RM 3,500) and the repayment period as 7 months.

   

   
   

   Month 2: Deduction: RM 6,500 / 7 = RM 928.58.

   There has been a change in the loan amount in the salary details of Payroll from RM 928.58 to RM 2,900.

   The employment contract will then show the remaining recurring deduction for the loan as RM 3,600 and the repayment period as 6 months.