Concur that it is a reimbursement, just like other usual reimbursement like out-of-town trip expenses or one-time relocation costs. Johnny should have also make a written claim, and present it for boss approval in the 1st week, instead of allowing it to be paid with his 1st month salary, hence the screw-up by Payroll mistaken it as special allowance or bonus.

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Added on August 24, 2012, 8:09 pmBut how to rectify it without embarrassing Payroll staff and maybe immediate boss? Maybe just let it be, and take it as a petty matter, and pretend to be too busy in new job to notice it... since the extra 12% EPF more or less offset the tax on this extra ‘income’.

But Johnny already "in the midst of challenging them on this." So the discussion is academic.

This post has been edited by j.passing.by: Aug 24 2012, 08:09 PM

Knowing the mindset of Accounts/Admin, Johnny shouldn't be too worry about his claim (and not show his concern about the tax deducted too much)... just let know to the right person ie. the HOD of that Dept, that he likes the generosity of company in paying EPF on reimbursements... bet the HOD will jump.

Rectifying the error, simple matter... Payroll will treat the mistake as advance salary, and deduct partially the next 2 months on the paid EPF and tax; and the balance of the reimbursement....