The Travelling Allowances, Toll Allowances, and Petrol Allowances are tax exempted for RM6000 per annum. However, if the receipts pertaining to the expenses of travelling, toll, and petrol can be claimed up to RM6000 if the receipts are kept for period of 7 years for audit purposes.
Example :
( Adapted from PUBLIC RULING NO. 5/2019: PERQUISITES FROM EMPLOYMENT)
Azreena is an auditor employed by a petroleum company. Her company pays her travelling allowance and toll rate as follows:
Travelling Allowance => RM 7500
Toll Allowance => RM 2000
Tax Treatment :
Total Amount of Travelling & Toll Allowances: RM 9500
Tax Exempted Amount per annum: RM 6000
Taxable Amount: RM 3500
However, Azreena can claim the total amount of RM9500 if she keeps the receipts for the Travelling and Toll expenses that have occurred when carrying out official duties.
Settings in Worksy :
When choosing Tax Category in the Payroll Item, one should be aware of the different outcomes that will be reflected in the EA Form. So, choose the Tax Category based on the nature of the allowance that you are practicing in your company.
See below for each Tax Category explanation :
Standard : All the amount will be taxable
Petrol Card / Allowance : The first 6k is tax exempted while the rest is taxable
Toll Allowance : The first 6k is tax exempted while the rest is taxable
Traveling Allowance : The first 6k is tax exempted while the rest is taxable
Petrol Claims: All the amount is tax-exempted
Toll Claims: All the amount is tax-exempted
Traveling Claims: All the amount is tax-exempted
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