Compensation and Benefits Overview

All forms of pay or rewards received by employees for their work. It includes wages, incentives, bonuses, and benefits.

Direct financial payments are compensation that is paid directly to employees in cash. It includes wages, salaries, incentives, commissions, and bonuses.

Indirect financial payments are benefits offered by employers, like insurance or paid time off. These are not paid directly to employees but provide them with financial value.

Non-financial compensation is not paid in cash. It offers rewards that provide satisfaction, such as flexible work schedules, onsite gyms, or recognition programs.

Regular cash payments made to employees in exchange for their work. They are usually calculated based on time worked (hourly or salary) or by the amount of work produced (piece-rate).

Payment based on employee performance, often used for sales positions or individual targets. Employees earn more based on exceeding expectations.

Extra payments offered to employees as a reward for achieving goals or exceeding expectations. They are usually given on top of regular wages.

Working longer hours than normal. In Malaysia, overtime rates vary based on the day of the week, ranging from 1.5 times to 3 times the normal hourly rate.

A work schedule where employees work outside of traditional business hours, often in shifts. This allows for continuous operation of a business.

A system where employees can choose their own start and end times within a set range of hours.

A type of employment where employees work fewer hours per week than full-time workers. They can be temporary or permanent.

Legal benefits that all employees are entitled to, such as maternity leave, paternity leave, and a weekly rest day.

Paid time off for mothers, typically 98 days in Malaysia, after giving birth.

Paid time off for fathers, typically 7 days in Malaysia, to help care for a newborn child.

A day off every week for all employees, required by law in Malaysia.

Benefits that are not required by law, such as health insurance, paid time off, or bonuses.

Public holidays in Peninsular Malaysia are days off with pay specified by law, including National Day, Yang di Petuan Agong's Birthday, State Ruler's Birthday, Labour Day, and Malaysia Day.

Workers are entitled to paid annual leave, increasing with years of service: less than 2 years = 8 days, 2-5 years = 12 days, over 5 years = 16 days.

Employees are entitled to paid sick leave, increasing with years of service: less than 2 years = 14 days, 2-5 years = 18 days, over 5 years = 22 days; Hospitalization can extend to 60 days leave per year.

EPF (Employees Provident Fund) ensures retirement savings for workers, contributed by both employer and employee.

EPF contributions are mandatory for most workers, with employees contributing 11% and employers 12%.

EPF withdrawals are usually available at 55 even if working, but the target age for retirement benefits is 60.

EPF is not mandatory for specific groups: domestic servants, foreign workers, and government servants on a pension scheme.

Even self-employed people can contribute to EPF if they wish, paying a minimum of RM50 per month.

A system that allows employees to share in the company's profits, usually based on a percentage of the company's earnings.

A reward system applied especially to sales personnel where their pay is linked to their sales performance. Higher sales, higher pay.

Financial incentives aimed at encouraging employees to work harder and improve performance.

Rewards given to employees beyond financial compensation like recognition, flexible work schedules, health insurance, and training opportunities.

Offering scholarships to employees for further studies and educational development, encouraging them to advance their careers.

Employers may contribute to special retirement funds as an addition to the standard Employee Provident Fund (EPF), encouraging employees to plan for their future financially.

Providing additional support for employee well-being, such as covering fees for training courses, membership in relevant clubs, or accommodation at holiday resorts.

A government-mandated benefit that protects workers in case of workplace accidents, occupational diseases, or invalidity. It provides financial and medical assistance.

A type of non-statutory benefit where employers provide financial assistance to employees for various purposes, such as buying a house, car, or computer.

A common non-statutory benefit where employers buy group life and accident insurance policies for their employees, often combined with medical benefits.

This refers to paid time off for specific events like marriage, personal emergencies, pilgrimages, studies, or death of a relative.

Employers may offer various forms of educational assistance to employees, such as setting up libraries, providing computer resources, or subsidizing educational expenses.

Employers may offer subsidies and services to employees to improve their well-being and work-life balance, such as canteens, transportation, or childcare.

Some employers may choose to contribute more than the legal minimum to the EPF (Employee Provident Fund) for their employees, providing them with a higher retirement benefit.

Awards given to employees for outstanding performance, like 'Worker of the Month' or 'Most Promising Executive'.

A written or spoken expression of gratitude for an employee's contributions. It can be a simple 'thank you' or a more formal letter.

A reward given to employees who have worked for the company for a long period of time. This could be a gift like a watch, a trip, or a special event.

Paying employees based on the amount of time they work, regardless of how much work they actually get done.

Paying employees based on the quantity of goods they produce or the number of tasks they complete. This encourages employees to work faster and more efficiently.

A piece rate system where the employee is paid a higher rate for every product produced over a set standard.

A piece rate system where employees are paid the same set rate for every product they produce.