Under section 83(1) of the Income Tax Act 1967, Every employer shall, for each year, furnish to the Director General a return in the prescribed form not later than 31 March in the year immediately following the first-mentioned year containing—
the number of employees employed;
the number of employees subject to deductions under the Income Tax (Deduction From Remuneration) Rules 1994 [P.U. (A) 507/1994];
the number of new employees employed;
the number of employees who have resigned;
the number of employees who have resigned and left Malaysia; and
such other particulars as may be required by the Director-General.
To comply with the statutory requirement stipulated above, an employer tax file must be registered by any business or company with employees.
Step 1: Registration
Applying for an E-number may be done online through the LHDN website using e-Daftar.
Step 2: New Hiring
Notification of new employees through Form CP22.
Within 30 days after commencement of employment.
The form can be submitted at any IRBM office
Step 3: Pay-As-You-Earn (PAYE) Scheme
Make monthly tax deductions (MTD, "Potongan Cukai Bulanan" or PCB in Bahasa Malaysia) from employee’s remuneration based on:
either the Schedule of MTD; or
the computerised calculation method
To remit the amount of MTD to the IRBM on or before the 15th day of the subsequent month.
The employer may only use the e-PCB, e-Data PCB or e-CP39 applications provided through the IRBM’s Official Portal to submit the statement of MTD or employees’ MTD data. Step 4: Termination of Employment
Notification of cessation of employment or cessation because of the death of an employee:
in the private sector through Form CP22A
in the public sector through Form CP22B
Due date of Notification:-
Not less than 30 days before the cessation of employment; or
Not more than 30 days after being informed of the death
The form can be submitted either:
online via e-SPC; or
at the IRBM office, which handles the employee income tax number
Step 5: Termination of Employment and Leaving Malaysia
Notification of employees leaving Malaysia for more than 3 months through Form CP21
Not less than 30 days before the expected date of departure
The form can be submitted either:
online via e-SPC; or
at the IRBM office, which handles the employee income tax number
Remark: Must withhold any monies payable to the employee for 90 days or until a tax clearance letter is received in the case of cessation of employment because of death or leave Malaysia for more than 3 months with no intention of returning.Step 6: Preparation of Form E
Submit the return form of the employer (Form E) together with the C.P.8D on or before 31 March (statutory due date) of the following year
Employer (Company and Labuan Company) is compulsory to submit Form E via e-Filing (e-E) with effect from remuneration for the year 2016;
Employers other than Company and Labuan Company – Submission via e-filing is encouraged.
Form E will only be considered complete if C.P.8D is submitted within the stipulated deadline.
Employers who have submitted information via e-Data Praisi need not to complete and furnish C.P.8D.
Remark: For Companies, LLP, Trust Bodies and Co-operative Societies – It is mandatory to file even if the entity has no employee OR dormant OR has not commenced business during the calendar year.
Step 7: Preparation of Form EA/EC or Form CP58
Prepare and render to an employee a statement of remuneration (Form EA / EC) in respect of that employee on or before the last day of February of the following year.
EA/EC form is a Yearly Remuneration Statement that includes employee salary.
Prepare and provide a copy of the statement of monetary and non-monetary incentive payment to each agent, dealer or distributor (Form CP58) on or before 31 March of the following year.
Step 8: Record
Keep and retain records for 7 years and make them readily accessible to the IRBM if needed.
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