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Retention Bonus Formula:
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Retention bonus is a financial incentive offered to employees to encourage them to remain with a company for a specified period. In Malaysia, retention bonuses are commonly used to retain key talent and reduce employee turnover.
The calculator uses the retention bonus formula:
Where:
Explanation: The formula calculates the total retention bonus amount based on the employee's salary, bonus rate, and the retention period.
Details: Accurate retention bonus calculation helps companies budget appropriately for employee retention programs and ensures fair compensation for employees who commit to staying with the organization.
Tips: Enter monthly salary in MYR, bonus rate as decimal (e.g., 0.15 for 15%), and retention period in months. All values must be valid positive numbers.
Q1: Is retention bonus taxable in Malaysia?
A: Yes, retention bonuses are generally considered taxable income under Malaysian tax laws and are subject to income tax.
Q2: How is retention bonus different from performance bonus?
A: Retention bonus is paid for staying with the company for a specified period, while performance bonus is based on achieving specific performance targets.
Q3: Can retention bonus be paid in installments?
A: Yes, companies may choose to pay retention bonuses in installments or as a lump sum, depending on the agreement with the employee.
Q4: What is a typical retention bonus rate in Malaysia?
A: Retention bonus rates vary by industry and position, but typically range from 10% to 30% of monthly salary.
Q5: Are there legal requirements for retention bonuses in Malaysia?
A: Retention bonuses should be clearly specified in employment contracts or bonus agreements to avoid disputes. Companies should comply with Malaysian employment laws.