Managing payroll in Malaysia comes with its fair share of statutory deductions. One of the lesser-discussed but important ones is the Skim LINDUNG 24 Jam — a group personal accident insurance scheme that covers employees 24 hours a day. With the deduction rate now set at 0.75%, HR managers, payroll executives, and business owners need to understand exactly how to apply this calculation correctly.
This guide walks you through what Skim LINDUNG 24 Jam is, why the 0.75% rate matters, and how to calculate it step by step.
What Is Skim LINDUNG 24 Jam?
Skim LINDUNG 24 Jam, which translates to “24-Hour Protection Scheme,” is a group personal accident insurance plan offered to employees as part of their employment benefits. It covers accidental death and permanent disablement at any time of the day — whether the employee is at work, at home, or traveling.
In many Malaysian companies, particularly government-linked corporations and certain industries, participation in this scheme is mandatory. The cost may be shared between the employer and employee, or borne entirely by one party, depending on the company’s policy.
Why It Matters to Payroll Teams
For payroll professionals, the Skim LINDUNG 24 Jam deduction must be accurately computed and reflected in every employee’s payslip. Miscalculating this deduction can lead to discrepancies in net pay, disputes with employees, or complications during audits. With the current rate at 0.75%, ensuring your payroll is configured correctly is essential.
Understanding the 0.75% Deduction Rate
The 0.75% rate is applied to the employee’s gross salary or a defined insurable salary, depending on the scheme’s terms. This rate was set to reflect the cost of coverage and align with updated insurance premiums applicable to group personal accident policies in Malaysia.
Percentage-Based vs Fixed Premium
Some organisations previously applied a fixed monthly premium rather than a percentage-based deduction. The shift to a percentage-based model means the deduction scales with the employee’s salary, making it proportionate and easier to apply uniformly across the workforce.
Which Salary Component Is Used?
Typically, the 0.75% is applied to the employee’s gross monthly salary, which includes basic pay and fixed allowances. Variable components such as overtime, commissions, or bonuses may or may not be included depending on the specific scheme’s definition. Always refer to your policy document to confirm.
Step-by-Step Guide to Calculating the Deduction
Here is how to calculate the Skim LINDUNG 24 Jam deduction correctly for each payroll cycle:
Step 1: Identify the employee’s gross monthly salary
Include basic pay and all fixed allowances. Confirm whether variable components are included under your scheme.
Step 2: Apply the 0.75% rate
Multiply the gross salary by 0.0075.
Formula: Deduction = Gross Salary × 0.0075
Step 3: Round to the nearest sen
Round the calculated amount as instructed by the insurer — typically to the nearest 10 sen.
Step 4: Record and deduct in payroll
Enter this deduction in your payroll system. It reduces the employee’s net pay accordingly.
Step 5: Remit to the insurer
Compile all employee deductions along with any employer contribution and submit to the insurance provider by the stipulated due date.
Sample Calculation Table
| Gross Salary (RM) | Rate | Monthly Deduction (RM) |
|---|---|---|
| 2,000 | 0.75% | 15.00 |
| 2,500 | 0.75% | 18.75 |
| 3,000 | 0.75% | 22.50 |
| 4,000 | 0.75% | 30.00 |
| 5,000 | 0.75% | 37.50 |
Who Is Affected by This Deduction?
This deduction affects several groups within any organisation:
- Employers who manage payroll in-house and need to ensure their payroll configuration is up to date
- HR Managers who oversee employee deductions, compliance, and payslip accuracy
- Payroll Software Users who rely on automated systems — these must have the correct rate configured
- Employees who will see this deduction reflected in their monthly payslip
If your organisation uses payroll management software, verify that the deduction rate is properly set to avoid under or over-deductions during each payroll run.
Common Mistakes to Avoid
Even experienced payroll teams can make errors when handling deduction calculations. Here are the most common ones to watch out for:
- Applying to the wrong salary base — calculating from basic pay only when the scheme requires gross salary, or vice versa
- Using an outdated rate — not updating the deduction rate in payroll software when it changes
- Missing the effective date — applying the rate for the wrong payroll period
- Failing to notify employees — not informing staff of the deduction and how it is calculated
- Late remittance — missing the insurer’s submission deadline, which can affect coverage validity
Key Takeaways
- Skim LINDUNG 24 Jam is a 24-hour personal accident insurance scheme for employees in Malaysia
- The deduction rate is 0.75% of the employee’s gross monthly salary
- The formula is straightforward: Gross Salary × 0.0075 = Monthly Deduction
- Employers must ensure payroll systems are correctly configured
- Accurate record-keeping and timely remittance to the insurer is essential for maintaining coverage
Frequently Asked Questions
Is Skim LINDUNG 24 Jam mandatory for all Malaysian employees?
Not for all employees. Mandatory participation depends on the type of organisation, industry, and applicable regulations or collective agreements. Check with your HR department or the relevant industry guidelines for confirmation.
Can the employer absorb the full cost?
Yes. Employers can choose to absorb the full premium as part of their employee benefits package. In this case, no deduction appears on the employee’s payslip, but the employer still makes the full remittance to the insurer.
What happens if the deduction is not made correctly?
Incorrect deductions can result in a shortfall in the insurance premium payment, which may affect the validity of employee coverage. It can also create payroll discrepancies that require retroactive corrections, adding administrative burden for the HR team.
Does this deduction appear on the payslip?
Yes, when the deduction is borne by the employee (fully or partially), it should be clearly itemised on the payslip as “Skim LINDUNG 24 Jam” or a similar descriptor so employees understand what the deduction is for.
Conclusion
The 0.75% Skim LINDUNG 24 Jam deduction may appear to be a minor payroll item, but it has real implications for employee coverage and payroll compliance. Understanding the calculation, applying the correct salary base, and keeping your payroll system updated are all steps that protect both your employees and your organisation.
If your organisation handles multiple statutory deductions alongside EPF, SOCSO, EIS, and PCB, consider reviewing your entire payroll process to ensure every deduction is accurate, compliant, and clearly communicated to your workforce.
Smart Touch technology pte ltd , www.smartouch.com.sg +65-63964767, sales@smartouch.com.sg , www.smartouch.com.my +607-3889903 sales@smartouch.com.my