Published On: 08/08/2025By

When an employee resigns, retires, or leaves your company for any reason, employers in Malaysia must follow several important steps to ensure compliance with EPF, SOCSO, EIS, and LHDN regulations.

This guide walks you through what you need to do with each statutory body and how you can simplify the offboarding process using Pandahrms HR software.

EPF (KWSP) – Employees Provident Fund

You are not required to submit any special form to KWSP when an employee leaves your company.

However, if you are no longer employing anyone, either temporarily or permanently (e.g., company closure, downsizing), you must inform KWSP directly.

📌 For more information, visit the KWSP official website.

SOCSO / EIS – Social Security & Employment Insurance System

When an employee resigns or is terminated, you need to update the employee’s resignation date in the PERKESO Assist Portal.

You can refer to the Assist Portal User Guide (Page 72) for step-by-step instructions on how to update the information.

👉 Tip: Update it promptly to avoid discrepancies in contribution history or claim eligibility.

LHDN – Inland Revenue Board of Malaysia

You must submit Form CP22A (or CP21, in specific cases) to LHDN in certain circumstances, and may be required to withhold final payments to the employee. Here’s how it works:

When You MUST Submit Form CP22A:

Submit Form CP22A at least 30 days before the employee leaves if:

  • The employee is retiring

  • The employee is leaving Malaysia permanently (In this case, submit Form CP21 instead)

  • The employee was eligible for PCB but no deductions were made

In these cases, you must also withhold any money payable (e.g., final salary, commission, bonus, etc.) until you receive a tax clearance letter from LHDN.

From 1 January 2024, CP22A/CP22B must be submitted online via the MyTax portal using the e-SPC application.

Failure to comply may result in prosecution, with a fine of RM200 to RM2,000, imprisonment of up to six months, or both. You will also be held responsible for any outstanding taxes owed by the employee.

When CP22A Is NOT Required:

You do not need to notify LHDN or withhold payments if:

  • PCB (Monthly Tax Deduction) was properly deducted during employment

  • The employee’s salary was below the PCB threshold

  • You are certain the employee will continue to work in Malaysia

It is advisable to obtain a signed confirmation of the employee’s new employment for your records in case of a future PCB audit.

Streamline the Offboarding Process with Pandahrms

Handling employee exits involves many moving parts—notice tracking, statutory form submission, and final payroll calculations. Pandahrms helps simplify this process with:

Key Features:

  • Track resignation and last working date easily

  • Maintain digital records of resignation letters and confirmation forms

  • Automate pro-rated salary and final payout calculations

  • Custom offboarding checklists to ensure all statutory steps are completed

  • Centralized employee files for LHDN audit readiness

With Pandahrms, you can stay compliant, reduce HR admin work, and ensure a smooth exit experience for both HR and employees.