[MY] Steps to Take When an Employee Leaves Your Company

When an employee resigns, you need to follow specific procedures for different authorities. Here's a simplified guide to help you through the process:

EPF

No special forms are required when an employee leaves. However, you must inform EPF if you stop employing workers, either temporarily or permanently. For details, check the KWSP website.

SOCSO/EIS

Update the employee’s resignation date in the Assist Portal. Refer to the Assist Portal User Guide (page 72) for detailed instructions.

LHDN

You must notify LHDN at least 30 days in advance by submitting Form CP22A and withhold any payments to the employee until you obtain a clearance letter from LHDN in the following cases:

• The employee is retiring.
• The employee is leaving Malaysia permanently (submit Form CP21 instead of Form CP22A).
• The employee was eligible for PCB, but no deductions were applied.

From January 1, 2024, Form CP22A / CP22B must be submitted online via the MyTax portal using the e-SPC application. Non-compliance may result in fines ranging from RM200 to RM2,000, imprisonment for up to six months, or both. You will also be liable for any outstanding taxes due from the employee.

If PCB deductions were correctly deducted, the employee’s salary was below the PCB threshold, and you are aware that the employee will continue working in Malaysia, there is no need to notify LHDN or withhold payments. However, it is advisable to keep a signed confirmation of the employee's new job for possible PCB audits.

For more information, kindly refer to this page: Notifications of Termination of Service

By following these steps, you ensure a smooth transition for the departing employee and compliance with regulatory requirements.