Director Fee vs Director Remuneration in Malaysia.
In Sdn Bhd, directors may receive payment from the company. However, payments to directors are generally separated into two categories: director fees and director remuneration. Although both are paid to a director, they are not the same in purpose, approval process, and payroll treatment.
1) Director Fee
Director's fee refers to payment made to a person for acting as a director, meaning for their duties as part of the Board of Directors.
This includes:
· Attending board meetings
· Reviewing company matters and giving approvals
· Providing oversight on management decisions, and participating in strategic planning
Key characteristics of director fees
· Usually paid to non-executive directors (directors who are not employed by the company)
· Normally paid monthly, quarterly, or annually
· Required shareholders' approval at the general meeting
Payroll & statutory contribution
Director fees are usually:
· Taxable to the director
· Subject to PCB (monthly tax deduction) where applicable
· Not subject to EPF/SOCSO/EIS, because it is not an employment salary
2) Director Remuneration
Director remuneration is a broader term and usually refers to payments made to a director for working in the company, similar to a normal employee. This is common when the director is also a manager or runs the business daily.
This includes:
· Monthly salary
· Bonus / incentive
· Allowances (e.g., petrol, mobile, entertainment)
· Benefits-in-kind (e.g., company car, accommodation)
Key characteristics of director remuneration
· Usually paid to executive directors
· Paid based on an employment contract or management agreement
· Treated like normal payroll because the director is performing operational duties
Payroll & statutory contribution
Director remuneration is usually:
· Taxable as employment income
· Subject to PCB
· Usually subject to EPF + SOCSO + EIS, because it is treated as salary/wages
Conclusion
In summary, director's fee is for serving as a director on the board, while director remuneration is for directors who also work in the company as executives or employees. For an Sdn Bhd, both can be paid, but they should be clearly separated and properly documented for compliance and payroll purposes.
𝐕𝐢𝐬𝐢𝐭 𝐮𝐬
Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
𝐓𝐇𝐊 (𝐒𝐞𝐜𝐫𝐞𝐭𝐚𝐫𝐢𝐚𝐥, 𝐀𝐜𝐜𝐨𝐮𝐧𝐭/𝐏𝐚𝐲𝐫𝐨𝐥𝐥, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsource booking, accounting and payroll services to clients
Website www.thks.com.my
Facebook https://bit.ly/42XKWsk
Instagram https://bit.ly/42Uqf0e
Linkedin https://bit.ly/3EH885M
𝐊𝐓𝐏 (𝐀𝐮𝐝𝐢𝐭,𝐓𝐚𝐱, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients
Website www.ktp.com.my
Instagram https://bit.ly/3Rko5kN
Linkedin https://bit.ly/3sapf4l
Telegram http://bit.ly/3ptmlpn
𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞
An internal community for our colleagues on work and leisure.
Tiktok http://bit.ly/3u9LR6Q
Youtube http://bit.ly/3ppmjyE
Facebook http://bit.ly/3ateoMz
Instagram https://bit.ly/3jZpKLo
KTP 𝐂𝐚𝐫𝐞𝐞𝐫
An external job community on vacancy in Johor Bahru for interns, graduates & experienced candidates.
Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o
#KTP #Thk
#Myktp
#ktplifestyle
#ktpcareer
#24years
Indonesia