Last updated: February 2026
Manual Payroll Risks: The High Cost of 'Free' Methods
Why Manual Calculations Are the Most Expensive Way to Run Payroll
Secure & Compliant
One fine costs more than software
Why Malaysian SMEs Choose HavaHR Payroll
Reduce compliance risk
Audit-ready payroll records
Protect employee payroll data
Learn More About Manual Payroll Risks
Manual payroll carries significant risks for Malaysian employers. The most common issues are: 1) Incorrect statutory calculations (EPF/SOCSO/PCB), leading to fines. 2) Late payments due to manual processing time. 3) Human error in data entry. 4) Lack of secure data storage. The cost of one penalty often exceeds years of software subscription fees.
Identify the financial and legal risks of manual payroll. From LHDN audits to Labour Court disputes, understand why automation is a safety necessity.
Frequently Asked Questions
What is the penalty for late EPF payment?
Late contributions are subject to dividend charges and late payment interest. KWSP can also impose fines.
What happens if I calculate PCB incorrectly?
Under-deduction of PCB can lead to penalties from LHDN. The employer may be liable to pay the difference plus a fine.
Is manual payroll illegal?
No, it is not illegal, but it is highly discouraged due to the complexity of calculations (Third Schedule EPF, MTD Formula). The risk of errors increases over time.
Can I be sued for wrong payroll?
Yes, employees can file complaints with the Labour Department (JTK) for incorrect wages or deductions, leading to costly disputes.