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Accounting Exam Note

1. Core Subject: The National Retirement Scheme (SPK)

The SPK is now the primary scheme. In an accounting context, staff must know the specific calculation rates as there is no longer a "cap" for higher salaries.

Contribution Rates (Mandatory)

Monthly Basic Salary (BND) Employer Contribution Employee (Member) Contribution
$500.00 and below Fixed $57.50 8.5% of Basic Salary
$500.01 – $1,500.00 10.5% (Min. $57.50) 8.5% of Basic Salary
$1,500.01 – $2,800.00 9.5% 8.5% of Basic Salary
$2,800.01 and above 8.5% 8.5% of Basic Salary

Accounting Rules to Note:

  • Rounding: Contributions must be rounded to two decimal points (unlike the old TAP which often rounded to the nearest dollar).

  • Wages Definition: Contributions are calculated based on the Basic Salary.

  • No Maximum Cap: Previously, contributions were capped at a certain salary level (e.g., $2,800). Under SPK, the percentage applies to the full basic salary amount.

2. Subject: Legacy TAP & SCP (Silver Generation)

While SPK is the new standard, your staff may still need to handle "Deferred Members" (Employees aged 50–59 who chose to remain in the old system until retirement).

  • TAP (Old Rate): 5% Employee / 5% Employer.

  • SCP (Old Rate): 3.5% Employee / 3.5% Employer (Min $17.50, Max $98.00).

  • Exam Tip: Ask staff to identify which employee belongs to which scheme based on their age and choice during the 2023 transition.

3. Subject: Statutory Deadlines & Compliance

For any accountant or HR staff in Brunei, missing deadlines results in "Dividend Loss Charges."

  • Payment Deadline: Mandatory contributions must be paid by the 15th day of the following month.

  • Platform: All submissions are done via the e-Amanah online portal.

  • New Employees: Must be registered within 30 days of their start date.

4. Subject: Minimum Wage Order 2025 (New)

Brunei recently introduced a Minimum Wage policy. Your staff should understand how this interacts with SPK.

  • Gross vs. Net: The minimum wage is the amount before deducting the 8.5% SPK employee contribution.

  • Calculation: Accountants must ensure that the basic salary meets the statutory minimum before calculating SPK.

Module 1: The Legal Framework (Employment Order 2009)

This module covers the "Rules of Engagement" for employees in Brunei.

  • Definition of Employee: Who is covered (Local/Foreign) and who is excluded (Managers/Executives/Seamen).

  • Contract of Service: Key requirements of a legal employment contract.

  • Working Hours: The statutory limit of 44 hours per week and a maximum of 12 hours per day (including OT).

  • Leave Entitlements: Statutory minimums for Annual Leave (usually 7-14 days depending on years of service), Sick Leave, and Maternity Leave.1

  • Termination: Required notice periods and final salary settlement rules.2

Module 2: Payroll Computation & Salary Standards

This is the "Math" module where staff learn how to calculate gross and net pay.

  • Minimum Wage Order 2025: As of April 2025, the mandatory minimum basic wage is BND 500/month (Full-time) or BND 2.62/hour (Part-time).3

  • The Hourly Basic Rate: The formula for converting monthly salary to hourly rates to calculate penalties or overtime.

  • Overtime (OT): Calculating the 1.5x rate for normal workdays and double pay for Rest Days/Public Holidays.4

  • Incomplete Month Calculation: Using the statutory formula for employees who start or resign mid-month.

  • Allowances vs. Basic: Identifying which payments are "SPK-deductible" (Basic Salary, Commissions) and which are not (OT, Bonuses, Travel Allowances).5

Module 3: Social Security & Pensions (SPK, TAP & SCP)

This is the most critical module for compliance accuracy.

  • SPK (National Retirement Scheme): The primary scheme since July 2023.6

    • Employee Rate: Fixed at 8.5%.7

    • Employer Rate: Tiered based on salary ($57.50 flat, 10.5%, 9.5%, or 8.5%).8

  • Legacy Schemes (TAP/SCP): Understanding "Deferred Members" (employees aged 50-59 who stayed in the old system).

  • Deadlines: Contributions must be paid by the 15th of the following month.9

  • Penalties: Understanding "Dividend Loss Charges" for late payments.

Module 4: Statutory Administration (e-Amanah & Reporting)

This module covers the "How-To" of the job.

  • e-Amanah Portal: Registering new employees, updating member details, and uploading CSV contribution files.10

  • Itemized Payslips: The legal requirement to provide employees with a breakdown of Gross Pay, Deductions, and Net Pay.11

  • Record Keeping: Maintaining payroll records for at least 6 years for Labour Department inspections.

Summary Table for Staff Quick Reference

Subject Key Focus Key Regulation
Labour Law Leave, Notice, Work Hours Employment Order 2009
Minimum Wage BND 500 Monthly Minimum Wage Order 2025
Social Security 8.5% Employee / Tiered Employer SPK Act (Chapter 273)
Overtime 1.5x Hourly Rate Section 65, Employment Order

In Brunei, financial reporting is governed by the Brunei Darussalam Accounting Standards Council (BDASC), which was established under the Accounting Standards Order (now Chapter 267).

For your staff textbook, you should divide this subject into two main categories: IFRS (for large/public entities) and BDAS (for smaller/private entities).

Chapter 6: Financial Reporting Standards

Subject Overview: IFRS vs. BDAS

What is this subject about?

This chapter explains which set of accounting "rules" a company must follow when preparing its year-end financial statements. In Brunei, we do not have one single rule for everyone; instead, the rules depend on whether the company is "Publicly Accountable" or a "Private Entity."

1. International Financial Reporting Standards (IFRS)

Who must use this?

Any entity with Public Accountability (Public Interest Entities - PIEs). This includes:

  • Banks and Finance Companies.

  • Insurance and Takaful Companies.

  • Companies that trade debt or equity in public markets.

Key Requirement:

  • These entities must adopt Full IFRS as issued by the International Accounting Standards Board (IASB).

  • Compliance must be stated explicitly in the audit report.

2. Brunei Darussalam Accounting Standards (BDAS)

Who must use this?

Non-Public Interest Entities (Non-PIEs). This covers the vast majority of private limited companies (Sdn Bhd) and SMEs in Brunei.

Key Features of BDAS:

  • Simplified Reporting: BDAS is less complex than IFRS. It was designed specifically to facilitate consistency for local businesses without the heavy "disclosure" burden of international standards.

  • Effective Date: Mandatory for non-PIEs for financial periods beginning on or after 1st January 2018.

  • Flexibility: While BDAS is the standard for private companies, they are still encouraged and permitted to adopt Full IFRS if they choose (for example, if they have foreign investors).

3. Key Comparison for Staff Exams

Feature IFRS (Public Entities) BDAS (Private Entities)
Complexity High (Detailed disclosures) Lower (Simplified for local use)
Primary User Investors, Regulators, Banks Business Owners, Lenders, Tax Dept
Authority IASB (International) BDASC (Brunei Council)
Mandatory For Financial Institutions Private Sdn Bhd / SMEs

4. Why must an Accountant know this?

  • Audit Compliance: If a staff member prepares accounts for a private company using old, random formats instead of the BDAS format, the auditor will "qualify" the report (mark it as incorrect).

  • Consistency: Using BDAS ensures that when a bank looks at our financial statements, they are in a standard format that they recognize and trust for loan approvals.

Summary for the Textbook:

"In Brunei, we follow a dual-tier system. Large financial institutions use IFRS, while all other private companies use BDAS. As an accountant, your first step is to identify the company's status to ensure you use the correct reporting framework."

Here’s a clear summary of the Record Keeping (Business) Act, Chapter 249 under the laws of Brunei Darussalam — useful for business owners, accountants, students, or anyone needing an overview of this legislation: (agc.gov.bn)

📘 Record Keeping (Business) Act — Chapter 249 (Brunei Darussalam)

🔎 Purpose of the Act

The Record Keeping (Business) Act is enacted to require all businesses operating in Brunei to maintain proper records of their business transactions and related documents. Its aim is to ensure transparency, accountability and to support business regulation, tax compliance, and financial planning. (agc.gov.bn)

📌 Key Definitions

  • Business: Any form of trade, commerce, craft, profession, vocation or activity carried on for gain. (agc.gov.bn)

  • Competent Authority: The official appointed by the Minister of Finance and Economy to administer and supervise the Act’s application. (agc.gov.bn)

  • Minister: The Minister of Finance and Economy. (agc.gov.bn)

📝 Core Requirements

📂 Record Keeping Duty

  • Every person carrying on a business must:

    • Keep and maintain records of every business transaction.

    • Issue printed receipts that are serially numbered for all sums received from sales or services, and retain a duplicate copy of each receipt. (agc.gov.bn)

📅 Retention Period

  • Businesses are generally required to keep their records in an orderly manner for at least five (5) years from the date of the transaction. (bruneinewsgazette.com)

📑 What Counts as Records

Although the Act itself emphasizes “every transaction”, typical records covered include (based on the Order and practices under the Act):

  • Books of account (e.g., sales, purchases, cash, payments, receipts)

  • Invoices, vouchers and supporting documents

  • Receipts issued for payments

  • Any other records necessary to verify business entries

  • Records may be maintained in English or Malay. (agc.gov.bn)

🧑‍💼 Oversight and Compliance

  • A Competent Authority is appointed to administer the Act and supervise compliance. (agc.gov.bn)

  • Businesses must be able to produce records if required by authorities, auditors, tax officials, or other regulatory bodies.

⚖️ Why This Matters

  • Following this Act helps businesses:

    • Meet legal compliance requirements in Brunei.

    • Aid in tax reporting, audits, and financial transparency.

    • Maintain organized bookkeeping and financial planning for growth and investment decisions. (mofe.gov.bn)

📌 Summary (in Simple Terms)

✔ All businesses must keep organized records of transactions.
✔ Receipts must be issued and duplicates kept.
✔ Records must be kept for at least five years.
✔ Records help authorities verify business activities and support financial accountability.

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