Employer

Employer Responsibilities
Termination of Service
Employer Responsibilities

Responsibility of Employer:

1.Register an employer’s number (E).

2. Make a monthly tax deduction (MTD) from an employee’s compensation using either the MTD Schedule or the computerized calculation technique, and return the MTD to the IRBM by the 15th day of the following month. For submission of the statement of MTD or employees’ MTD data, employers may only utilise the IRBM’s Official Portal’s e-PCB, e-Data PCB, or e-CP39 programmed.

3. File an Employer Return Form (Form E) with C.P.8D by March 31 of the following year.

    • Employers (Labuan companies and companies) are required to submit form E via eFiling (eE) as of 2016 remuneration.
    • Form E will only be considered complete if the C.P.8D is filed ahead of time. Employers who have submitted information via eData Praisi are not required to complete and provide C.P.8D.

4. Prepare and send the employee a Statement of Indemnity (Form EA/EC) to the employee no later than the last day of February of the following year.

5. Prepare and send a copy of the Cash and Non-monetary Incentive Payment Statement to each agent, agent or distributor (Form CP58) by March 31 of the following year.

6. Maintain and preserve records for 7 years and provide them to IRBM if requested.

7. Prepare and submit the following form (if applicable):

Form Due Date Method of Submission
Form CP22
Notification of new employee		 Within 30 days after commencement of employment Form can be submitted at any IRBM office
Form CP22A
Notification of cessation of employment or cessation by reason of death for an employee in private sector		 Not less than 30 days before cessation of employment; or
Not more than 30 days after being informed of death		 Form can be submitted either:

  • online via e-SPC; or
  • at IRBM office which handles the employee income tax number
Form CP22B
Notification of cessation of employment or cessation by reason of death for an employee in public sector
Form CP21
Notification of employee leaving Malaysia for more than 3 months		 Not less than 30 days before expected date of departure

8. Withhold any money owed by the employee for 90 days or until the Tax Notice is received in the event of termination, termination of employment due to death or leaving Malaysia for more than 3 months with no intention of returning. come back.

Termination of Service

Cessation of employment / termination of employment / cessation by reason of death:

  • When an employer is about to discontinue an employee who is or is likely to be subject to tax on employment income or an employee dies from his or her employment, the employer must provide Form CP22A / CP22B at least 30 days before termination or no later than 30 days after being notified of death.
  • The CP22A/CP22B form can be submitted online via eSPC or at an IRBM office that processes employee income tax numbers.
  • However, the employer is not required to provide this form when the employee’s income has been withheld from monthly taxes (MTD) or when the employee’s monthly remuneration is less than the minimum income. subject to MTD, provided that the employee will continue to work or not retire from any employment in Malaysia.
  • Employers are required to withhold any payments due to an employee who has terminated or is about to cease working. The employer cannot pay such an amount, unless authorized by IRBM, to the employee or for the employee’s benefit until 90 days after the IRBM receives the form.

Leaving Malaysia for more than 3 months:

  • In case the employee subject to employment income tax is leaving or planning to leave Malaysia for a period of more than 3 months, the employer must provide Form CP21 at least 30 days before the expected date of employment. job. start.
  • Form CP21 can be submitted online via eSPC or at the IRBM office where the employee’s income tax number is processed.
  • However, the employer is not required to provide this form if IRBM is satisfied that the employee is required to leave Malaysia frequently during their employment.
  • Employers are required to withhold any funds owed to an employee who is leaving Malaysia for a period of more than 3 months with no intention of returning. The employer cannot pay such an amount, unless authorized by IRBM, to the employee or for the employee’s benefit until 90 days after the IRBM receives the form.

Non-compliance by employer:

  • Failure to meet the liability without any reasonable reason, if found guilty of a violation, will result in a fine of not less than RM200 and not exceeding RM20,000 or imprisonment for a maximum of 6 months or two months.
  • Employers are responsible for all taxes owed by their employees. The amount owed by the employer constitutes a debt to the government and can be recovered through civil action.

Related provisions:

  1. Subsections 83(3), (4) and (5) of the Income Tax Act 1967
  2. Subsection 106 of the Income Tax Act 1967
  3. Subsection 107(4) of the Income Tax Act 1967
  4. Subsection 120(1) of the Income Tax Act 1967