TaxSavvyMY

Employee leaving Malaysia

A foreign employee is leaving Malaysia permanently. What must we do?

The situation

Employers notify LHDN before an employee leaves Malaysia and withhold money due to them until clearance, under the form CP21 process.

The law

  • Sec 107, Income Tax Act 1967 and Income Tax (Deduction from Remuneration) Rules 1994: Employer deducts monthly tax (PCB / MTD) and pays it by the 15th of the next month
  • Sec 83, Income Tax Act 1967: Employer furnishes Form E by 31 March and gives each employee Form EA by end of February

What it means for you

Holding back final pay protects the employer, which can be liable for unpaid tax. Plan the notice early. The employee may need to file a final return.

What to do

  1. Submit CP21 in time.
  2. Hold final payments until cleared.
  3. Help the employee file.
  4. Release funds after clearance.

We can do this for youMonthly payroll compliance: PCB, EPF, SOCSO and EIS: MYR 200

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