Introduction to Malaysian Payroll Reporting Requirements
Navigating Malaysia’s payroll reporting system can feel daunting, especially with frequent regulatory updates. Employers are legally required to submit a range of monthly and yearly reports to different authorities such as the Employees Provident Fund (EPF), Social Security Organisation (SOCSO), Employment Insurance System (EIS), Inland Revenue Board (LHDN), and HRD Corp.
Maintaining compliance ensures the company’s financial health and shields it from fines or legal action. Let’s walk through all the essential payroll reports you must submit in Malaysia for 2025!
1. Monthly Payroll Reports
- Employers in Malaysia must submit several reports and make statutory contributions on a monthly basis:
- EPF (KWSP) Contributions: Employers must deduct and contribute EPF for employees based on the statutory percentage. The submission and payment deadline is the 15th of the following month.
- SOCSO (PERKESO) Contributions: Covers employment injury and invalidity schemes for workers. Payments are due by the 15th of the following month.
- EIS (Employment Insurance System): Aims to provide financial assistance to employees who lose their jobs. Submission is made together with SOCSO by the 15th of the following month.
- Monthly Tax Deduction (MTD/PCB) to LHDN: Employers must deduct monthly income tax from employees’ salaries and remit it to LHDN by the 15th of the following month.
- HRD Corp Levy (if applicable): Employers in certain industries must contribute 1% of employees’ monthly wages for training and development. Deadline is the 15th of the following month.
2. Yearly Payroll Reports
- In addition to monthly reports, employers must also prepare and submit yearly reports:
- EPF (KWSP) Contributions: Employers must deduct and contribute EPF for employees based on the statutory percentage. The submission and payment deadline is the 15th of the following month.
- SOCSO (PERKESO) Contributions: Covers employment injury and invalidity schemes for workers. Payments are due by the 15th of the following month.
- EIS (Employment Insurance System): Aims to provide financial assistance to employees who lose their jobs. Submission is made together with SOCSO by the 15th of the following month.
- Monthly Tax Deduction (MTD/PCB) to LHDN: Employers must deduct monthly income tax from employees’ salaries and remit it to LHDN by the 15th of the following month.
- HRD Corp Levy (if applicable): Employers in certain industries must contribute 1% of employees’ monthly wages for training and development. Deadline is the 15th of the following month.
3. Non-Routine Payroll Reports
- These reports are required under special employment circumstances:
- CP22: Notification to LHDN of a new employee (must be submitted within 30 days of commencement
- CP22A/CP22B: Notification of cessation of employment or retirement (must be submitted at least 30 days before cessation).
- CP21: Notification of employee leaving Malaysia (must be submitted 30 days before departure).
4. TP Forms for MTD (Monthly Tax Deduction) Adjustments
- Employees can submit TP forms to their employers to adjust monthly tax deductions:
- TP1: For reliefs and rebates such as spouse, children, and parents.
- TP2: For additional deductions like life insurance, EPF, and education fees.
- TP3: For previous years’ accumulated reliefs (new employees).
Employers must update payroll records accordingly to ensure correct monthly tax deductions.
5. Special Reporting Requirements
- Certain industries and business arrangements require additional reporting:
- CP58: Issued to agents, dealers, and distributors for incentives, rebates, or commission payments exceeding RM5,000 annually.
- CP38: Directive issued by LHDN for additional monthly tax deductions from specific employees’ salaries.
Compliance Tips for Malaysian Employers
- Automate payroll processing where possible.
- Use official portals and systems to avoid submission errors.
- Maintain clear internal deadlines 3–5 days before the actual due dates.
- Always keep documented evidence of submissions and payments.
Conclusion
Handling payroll reporting in Malaysia may seem intricate, but with proper planning and systematization, it becomes manageable. Stay proactive, keep yourself updated with the latest regulations, and ensure every deadline is met to build a compliant, reputable company.
FAQs
Late submissions may result in fines, penalties, or interest charges imposed by the respective statutory body.
Yes, but online submissions through official portals are recommended for efficiency and accuracy.
Employers must submit the relevant CP forms (CP22A, CP22B, or CP21) within the specified timeframe to LHDN.
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