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Payitem Guide: Leave Passage for Travel (Malaysia)

BrioHR provides two payitems for Leave Passage for Travel within Malaysia to ensure accurate payroll and tax compliance. Proper use of these payitems ensures statutory compliance, accurate payroll processing, and correct EA Form reporting.

In Malaysia, employers may provide leave passage—such as airfare, travel allowances, or reimbursements—for employees traveling home or within Malaysia. This is typically offered as part of employment benefits.

BrioHR provides two payitems to ensure accurate payroll processing and tax compliance:

  1. Leave Passage for Travel Malaysia Less Than Three Times

  2. Leave Passage for Travel Malaysia More Than Three Times

This article explains both payitems, how to use them, and scenarios for correct application.

Payitem Frequency of Travel Tax Treatment EA Form Reporting Scenario / When to Use
Leave Passage for Travel Malaysia Less Than Three Times Less than 3 times per calendar year Non-Taxable Item F (Non-Taxable Benefits) For infrequent travel, e.g., an employee traveling home during annual leave once or twice a year.
Leave Passage for Travel Malaysia More Than Three Times 3 or more times per calendar year Taxable Item B3 (Benefit in Kind)

For frequent travel, e.g., an employee traveling home every quarter or for business trips that qualify as benefits.

 

When to Use Each Payitem

1. Leave Passage for Travel Malaysia Less Than Three Times

Use this payitem when:

  • An employee travels within Malaysia fewer than three times in a calendar year.

  • Travel is part of annual leave, official leave, or infrequent company-sponsored trips.

  • The travel benefit is non-taxable under LHDN guidelines.

Example Scenario:

  • Ali travels home from Kuala Lumpur to Penang twice in a year during annual leave. This travel is non-taxable, so “Less Than Three Times” payitem is applied.

2. Leave Passage for Travel Malaysia More Than Three Times

Use this payitem when:

  • An employee travels three or more times in a calendar year.

  • Travel is considered a Benefit in Kind for tax purposes.

  • The payitem is taxable and should be recorded as Item B3 in the EA Form.

Example Scenario:

  • Siti travels home from Kuala Lumpur to Johor for leave four times in a year, or receives multiple company-sponsored trips exceeding two trips. This is considered a taxable benefit, so “More Than Three Times” payitem is applied.

NOTE:

Payitems categorized as Benefit in Kind does NOT show up in the payslip total amount as it is not a monetary amount however the correct amounts will show up in the EA form within Section B3 benefits in kind.

Key Points for HR/Admin Users

  1. Statutory Compliance

    • Only apply the correct payitem based on travel frequency.

    • Misapplication may result in incorrect tax reporting and non-compliance with LHDN.

  2. Payroll Treatment

    • “Less Than Three Times” – does not affect taxable income.

    • “More Than Three Times” – treated as Benefit in Kind (taxable), reported as B3 in the EA Form.

  3. Record-Keeping

    • Maintain travel dates, ticket receipts, and purpose of travel to substantiate tax treatment during audits.

    • If you wish to hide the Benefit in Kind payitem from the payslip, kindly refer to this guide. 

  4. System Configuration in BrioHR

    • Assign payitems correctly to employees.

    • Do not combine the two payitems.

 

To view the payitems within the Payroll module, please refer to the steps below:

  1. Go to HR Lounge > Payroll.
  2. Click into Settings > Payroll Items
  3. Search for Leave Passage For Travel (Malaysia) 

Need Assistance?

If you have any questions or require assistance, please reach out to our support team via live chat or email us at support@briohr.com.