Employer's Compliance Guide: Start 2026 Right
As we step into 2026, it's the perfect time for employers to review their compliance checklist. This guide serves as a friendly reminder of your key obligations to the Inland Revenue Board (LHDN), including an important clarification on when to file Form CP22A for departing staff.
1. For New Hires in 2026
1.Stamp the Employment Contract: All employment contracts must be stamped with a RM10 duty within 30 days of signing.
2.Submit Form e-CP22: Notify LHDN of new hires within 30 days via the mandatory e-CP22 portal, especially if the employee is likely to be taxable.
2. For Departing Employees: When is Form CP22A Required?
This is a common point of confusion. You are NOT required to file Form CP22A for every resigning employee. The key is whether the employee's income has been consistently reported via Monthly Tax Deductions (MTD/PCB).
You are generally EXEMPT from filing Form CP22A if:
• The employee's income has been subject to MTD/PCB, AND
• They are not receiving any lump-sum payments like gratuity or compensation for loss of employment.
You MUST file Form CP22A (via e-SPC) if:
• The employee's monthly income was below the MTD threshold (and thus no MTD was ever deducted).
• The employee is receiving a final payment of compensation or gratuity upon termination.
•T he employee is a foreign worker leaving Malaysia (use Form CP21).
When in doubt, it is always safest to file. If you do file, you must withhold all final payments until you receive the Tax Clearance Certificate from LHDN.
3. Annual & Monthly Obligations
• Form E (Annual Return): The statutory deadline is 31 March (or 30 April for e-filing).
• Form EA (Staff Remuneration): Provide to all employees by the last day of February.
• MTD/PCB (Monthly Deduction): Remit by the 15th of the following month.
A Partner in Compliance
Understanding these nuances is key to efficient compliance. We're here to help you navigate these requirements with confidence.
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