What do I need to do if an employee is leaving my company?

Kakitangan Blog -

EPF/SOCSO

You do not need to submit any special forms to EPF or SOCSO in the case of an employee ceasing employment.

When filling out the monthly SOCSO form Borang 8A the field "Tarikh Mula/Berhenti Kerja" should be filled out with the date of termination and the "Status" field should be filled in with a "X" for the employee who is leaving.

LHDN

You are required to notify the LHDN at least 30 days in advance by submitting Form CP22A and you must withhold any money payable to the employee until you receive a clearance letter from the LHDN, in the following cases:

  • The employee is about to retire;
  • The employee is about to leave Malaysia permanently (in this case Form CP21 would be submitted instead of Form CP22A);
  • The employee was eligible for PCB but no deductions were made.

If you fail to do so, you are liable to prosecution and if convicted, liable to a fine of not less than RM 200 and not more than RM 2,000 or to imprisonment for a term not exceeding six months or to both.

You will also be responsible for any tax due from employee.

In other cases, for example:

  • PCB was deducted correctly;
  • Employee’s salary was not high enough to have to pay PCB;
  • You are aware that the employee will continue working in Malaysia.

then there is no need to to notify the LHDN or withhold money payable to the employee.