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> New Job agree to my expected salary, But xx amount is Allowance

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TStaufoo
post Apr 5 2021, 10:28 AM, updated 2 months ago

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Any HR/bosses/employees can clarify this for me?

I interview, got the offer. I ask for RM9k but they offer me RM8.5k+Rm500 allowance.
Any reason why they do that? Is it some hack in terms of EPF payable etc?

Good to hear some input.
Thanks!
Ya Rerd
post Apr 5 2021, 10:34 AM

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It's easier to cutback on the allowance than your base salary, if the need arises. Win-win, they have some insurance, you get the 9k you wanted
tishaban
post Apr 5 2021, 10:51 AM

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I suggest going back to the company and asking them for RM9k basic before allowances

Why do HR do this?
1. the salary range for that position maxes out at RM8,500 so the only thing they can do is add the allowance

2. they're being sneaky and assuming you're talking about RM9k all in, not RM9k basic before allowances

3. something else nobody can guess unless you go to talk to the hiring manager yourself

In short go talk to them, the worse the can say is no so it's status quo. The best is they agree to your requirements. Anything else in between is still a win

Allowances can be cut yes, but I've not experienced that across 15+ years and 5+ companies. No differences in terms of EPF or taxation, allowances are considered gross income and will be subject to both. You're above the limit for EIS so your allowances won't make a difference either

All the best

This post has been edited by tishaban: Apr 5 2021, 10:52 AM
klch87
post Apr 5 2021, 01:14 PM

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I encountered this many years ago.

One of the thing i found out is that your expected basic salary is higher than the company/ industry baseline hence they lowball your salary and added in allowance as a buffer.

This is normally the case EXCEPT if you are a cream of the crop. The swan among the ducks. If you are top class in your industry, normally HR/ hiring manager would consider higher expected basic salary. Otherwise you will just follow the baseline just like everyone else.

Also, some allowance like petrol allowance and handphone allowances are non epf deductible. So you might have some cash there too.
Topace111
post Apr 5 2021, 03:41 PM

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Your future benefits like Increment and bonus are based on your basic salary not allowance.

Not sure whether this is a material consideration to you
karteh
post Apr 5 2021, 04:23 PM

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like all said above, max offer for ur position is 8.5k so to make it up the 500 is allowance...in future jump or increment is based on ur basic
ben_ang
post Apr 5 2021, 04:41 PM

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i think its more beneficial to employer instead of employee as karteh and topace suggest,
increment based on basic, and not sure if this got any affect on employer's tax angle..
my company also do tat.
adamhzm90
post Apr 5 2021, 06:04 PM

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Bonus and epf follow basic
iastate
post Apr 8 2021, 11:48 AM

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Ask the company to convert the allowance to basic salary. There are a few reasons why you want to do that:
- increment and bonus are calculated based on basic salary.
- when you change job next time, the future employer may consider only the basic salary for your salary increment, for example, 20% increment on top of the basic salary. Each company has different compensation package with regard to allowance and other benefits.

 

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