Why the final payment is a separate calculation
A routine month’s payroll and a final settlement aren’t worked out the same way. The dedicated guide on ongoing payroll covers what a normal payment record should contain and which statutory contributions apply month to month; a separate guide covers the day-to-day rule on what an employer may lawfully deduct and the 50%-of-month ceiling that ordinarily applies to it. Neither of those covers what happens at the close of the relationship itself, which is a distinct moment with its own rule.
Section 24(8) of the Employment Act caps total deductions in any one month at 50% of that month’s wages, and that’s the figure households usually plan around. Section 24(9) then sets out two things this cap doesn’t reach: the s.13(1) indemnity, and a deduction from an employee’s final wage payment for an amount actually due to the employer and still unpaid at termination. Both sit outside the routine ceiling because both are, by definition, one-off events tied to the relationship ending, not a recurring monthly deduction.
What actually goes into the number
The starting point is simple: any wages she has earned but not yet been paid must be included in the final settlement. That part isn’t conditional on anything — it’s money already owed for work already done, regardless of how or why the employment is ending.
The indemnity is different, and conditional. It’s only owed if she is the one who ends the contract without giving the notice it requires — fourteen days, payable to the employer in that specific circumstance, under s.13(1). Where that applies, the indemnity can be set against the final settlement directly, without being held back by the 50% ceiling that would apply to an ordinary month’s deduction. Where she isn’t the one who broke the contract without notice, no indemnity is owed at all, and the final payment is simply the unpaid wages.
- Unpaid wages owed to her — included regardless of how the employment ends.
- The s.13(1) indemnity — owed only if she broke the contract without proper notice.
- Neither is limited by the usual 50%-of-month deduction ceiling.
Keeping a record once the relationship ends
A written, dated record of the final settlement matters even more than a routine month’s payslip, for a straightforward reason: it’s the one document that answers any later question about what was actually paid out when the employment closed. The same basics apply as they do to any ongoing payment record — the amount, the date, the period it covers, and, if paid in cash, a signed or acknowledged receipt.
This specific carve-out is drawn from the Employment Act, which applies to a domestic employee’s wages in Peninsular Malaysia and Labuan. Sabah and Sarawak run their own separate labour ordinances, and this particular figure hasn’t been independently confirmed for either state — a household there is better off confirming final-settlement rules directly with its own state labour department rather than assuming this Peninsular rule carries over unchanged.