Date of Resignation: 13 April 2024
Notice period as per Employment Contract: 3 months
Last Day in Payroll: 31 May 2024
Annual Leave Balance as of 31 May 2024: 10 days
Monthly Wages: Basic Salary RM5,000.00 + Fixed Allowances RM500.00
1. When you tender on 13 April 2024 with 3 months notice, your last day on payroll should be 12 July 2024.
2. Since you are only serving notice till 31 May 2024, the period from 1 June to 12 July 2024 counts as your notice in lieu, which is 1 month and 12 days.
3. Notice in Lieu Calculation: 1 month’s wages in June + 12 days’ wages in July = RM5,500.00 + RM2,129.03 = RM7,629.03. This should be the buyout amount to be paid by your new company.
4. However, there is also leave encashment from your annual leave balance. If the company decides to encash everything, then the value will be calculated as follows: ROUND(Monthly Wages / 26,2) * No. of Days Encashed = ROUND(RM5,500/26,2)*10 = RM2,115.40
5. It’s quite common for companies to offset this amount with your last pay. Therefore, your pay in May will look like this:
May 2024 Wages: RM5,500.00
Plus (+) Leave Encashment: RM2,115.40
Minus (-) Notice in Lieu: (RM7,629.03)
Final Amount: (RM13.63)
This is one of the ways we tabulate buyout amounts and notice in lieu. Hope it helps and all the best with your offboarding.
xoxoxo, AuntyHR
