Employer obligations: PCB, e-CP39, Form E and EA — What You Need to Do

What are the employer's responsibilities?

According to HASiL, employers have eight basic responsibilities in the income tax system:

1. Register the employer number;
2. Deduct PCB from employees' remuneration every month and remit it to HASiL;
3. Submit Form E together with C.P.8D;
4. Provide Form EA/EC to employees;
5. Submit Form CP58 (for agents/distributors/dealers);
6. Keep records for 7 years;
7. Submit employee forms (CP22, CP22A, CP22B, CP21);
8. Withhold money for up to 90 days in certain cases.

Source: HASiL — Employer Responsibilities; Income Tax Act 1967, s.83 and s.107 (see Official sources section).

PCB deduction and remittance

Employers must deduct PCB (Monthly Tax Deduction / MTD) from employees' remuneration every month, according to the PCB Schedule or computerised calculation methods, and remit the PCB amount to HASiL before or on the 15th of the following month.

PCB statements may only be submitted through the e-PCB, e-Data PCB or e-CP39 applications on the official HASiL Portal.

Source: HASiL — Employer Responsibilities; PCB Payment (see Official sources section).

e-CP39

e-CP39 is the current method for employers without a computerised payroll system to submit MTD data and make payments. MTD calculations can be made with:

• The MTD Schedule;
• e-Jadual; or
• The MTD Calculator.

Payments can be made at bank counters (CP39/MTD account number auto-generated from 1 March 2019) or online via FPX (from 1 June 2019), as well as IBG/RENTAS/TT and cash (CIMB).

Source: HASiL — e-CP39 FAQ (see Official sources section).

Annual employer forms

• Form E (annual employer return) must be submitted before or on 31 March of the following year together with C.P.8D. e-Filing via e-E is mandatory for employers (companies and Labuan) from remuneration YA 2016. Form E is only considered complete if CP8D is submitted, except for employers who have submitted e-Data Praisi.
• Form EA/EC (remuneration statements) must be prepared and given to employees before or on the last day of February of the following year.
• Form CP58 to agents/distributors/dealers before or on 31 March.

Source: HASiL — Employer Responsibilities; Income Tax Act 1967, s.83(1) and s.83(1A) (see Official sources section).

New employees, cessation and leaving the country

• Form CP22 (new employee): within 30 days after employment begins; from 1 September 2024, it must be submitted via e-CP22 on the MyTax Portal.
• Form CP22A (cessation/death, private sector): not less than 30 days before cessation or not more than 30 days after being informed of death; via e-SPC.
• Form CP21 (employee leaving Malaysia for more than 3 months): not less than 30 days before the expected departure date.
• Withholding of money: the employer must withhold any money payable to the employee for 90 days or until a tax settlement letter is received, in cases of cessation, death or leaving Malaysia for >3 months without the intention to return.

Source: HASiL — Employer Responsibilities; Income Tax Act 1967, s.83(2)–(5) (see Official sources section).

Records

Employers must keep records for 7 years and ensure the records are easily accessible to HASiL.

Source: HASiL — Employer Responsibilities (see Official sources section).

Liability for non-compliance

Employers who fail to comply with s.83(2)–(5) or s.107 are liable to pay:

• The full tax owed by the employee (for s.83 failures); or
• The amount of tax that failed to be deducted (for s.107 failures).

The amount becomes a debt due to the Government and is payable immediately. The employer may recover it from the employee. Amounts received by the IRB are used to pay the employee's tax.

Source: Income Tax Act 1967, s.107(4) (see Official sources section).

Simple example

Kedai Kopi Maju employs three workers. Every month, the owner deducts PCB from employees' salaries according to the PCB schedule and remits the amount to HASiL before the 15th of the following month via e-CP39. Every year, he submits Form E before 31 March and gives Form EA to each employee before the last day of February. When a new employee starts, he submits CP22 via e-CP22 within 30 days.

(Illustrative example to show concepts — not specific tax advice.)