Purpose
Annual Wage Supplement (AWS) is a common business practice in most companies in Malaysia, as well as other Asian countries. It is also known as the 13th month payment. It represents a single annual payment to employees that is supplementary to the total amount of annual wages.
AWS is treated similarly to a bonus payment that depends on an employee's basic pay.
Features
The following options are available:
You can determine whether the calculation of the AWS amount is based on an employee's basic pay in a given payroll period or average basic pay over several payroll periods.
The latter method can only be used if values for average basic pay were created during payroll processing.
You can determine a factor by which the calculation base is multiplied to provide the amount of the AWS payment.
You can determine whether AWS is to be paid in one period or over multiple periods. For each AWS payment, you can specify whether it is to be included in the regular payroll run of the respective period, or whether it is to be paid in a special, off-cycle payroll run. The latter enables you to create flexible payment models.
You want to pay 40% of an employee's AWS immediately on calculation, while the rest is to be paid in the regular payroll run. This means that 40% is paid outside the regular payroll interval, thus making an off-cycle run necessary.
You can define special calculation rules for employees who leave the company during the period for which AWS calculation is performed. Alternatively, you can exclude these employees from AWS.
If an employee has not worked in the company for the whole year, you can determine how the AWS payment is to be pro-rated.
Pro-rate according to the number of months or calendar days that the employee worked.
You can define calculation rules for employees whose probation period has not yet ended by the time AWS is calculated.
No AWS or AWS only paid on confirmation of employment.
You can specify a minimum and a maximum amount for the AWS payment. Alternatively, you can decide that a fixed amount is to be paid, overruling the calculation based on an employee's basic pay.