A common question among employers and HR teams in Malaysia is:

“If an employee has resigned, do we still need to include them in CP8D?”

Many assume that once an employee leaves the company, they are no longer relevant for annual tax reporting.

However, this assumption is incorrect.

What Is CP8D and Why It Matters

In Malaysia, Form E and CP8D are mandatory annual submissions to Lembaga Hasil Dalam Negeri (LHDN).

These forms provide the tax authority with a complete record of employee remuneration for the year.

Specifically:

• Form E summarises total employment income paid by the employer

• CP8D provides a detailed breakdown of each individual employee’s income

This includes salaries, allowances, benefits, and other taxable payments.

Do Resigned Employees Need to Be Included in CP8D?

Yes — resigned employees must still be included in CP8D.

Regardless of whether an employee:

• Joined during the year

• Resigned before year-end (e.g. before December)

• Worked only part of the year

👉 They must still be reported in CP8D if they received income during that year.

Why Resigned Employees Still Need to Be Reported

The key principle is simple:

👉 CP8D reports income earned within the year — not employment status at year-end

If an employee worked for your company at any time during the year and received salary or benefits, that income must be declared.

This ensures that:

✔ LHDN has a complete and accurate income record
✔ The employee’s personal tax filing matches employer submissions
✔ There are no discrepancies during tax audits

Example Scenario

To make this clearer:

Example:

• Employee resigns in September 2025

• Received salary from January to September

👉 This employee must still be included in CP8D for YA 2025

Even though they are no longer employed at year-end, their income during the year is still taxable and reportable.

Common Employer Mistakes to Avoid

Many employers unintentionally make errors when preparing CP8D.

❌ Mistake 1: Excluding Resigned Employees

Some employers assume only “active employees” should be reported.

👉 This leads to incomplete submission and potential compliance issues

❌ Mistake 2: Reporting Only Year-End Headcount

CP8D is not a headcount report — it is an income reporting requirement

👉 All employees who earned income during the year must be included

❌ Mistake 3: Missing Short-Term or Contract Employees

Even employees who worked for a short period must be reported if they received payment.

Employer Compliance Reminder

Under Malaysian tax requirements, employers must ensure:

✔ All employees (current, new joiners, and resigned staff) are included in CP8D
✔ Reported income matches payroll records
✔ Submissions are complete and accurate before the deadline

Failure to submit accurate information may result in:

• Queries from LHDN

• Penalties for incorrect reporting

• Delays in employee tax filings

How Pandahrms Helps Simplify CP8D Reporting

Preparing CP8D manually can be time-consuming, especially when dealing with:

• Resigned employees

• Multiple payroll records

• Incomplete data tracking

With Pandahrms, employers can:

✔ Automatically track all employees throughout the year
✔ Maintain accurate payroll records for both active and resigned staff
✔ Generate CP8D-ready data with minimal manual work
✔ Reduce risk of missing employee records in submissions

This helps HR teams ensure accurate, compliant, and stress-free year-end reporting.

Key Takeaways for Employers

✔ Resigned employees must be included in CP8D
✔ CP8D reports income earned during the year, not employment status
✔ All employees (active, new, and resigned) must be declared
✔ Accurate reporting helps avoid tax discrepancies and compliance risks