Financial Year End (FYE) in Malaysia: A Complete HR & Payroll Guide for Employers

Deadlines, Forms, Compliance Tasks & How Pandahrms Keeps You Fully Prepared

As the financial year comes to a close, HR and payroll teams across Malaysia enter one of their busiest—and most crucial—periods. Beyond balancing company accounts, employers must finalise payroll data, verify statutory deductions, prepare year-end reports, and submit multiple mandatory forms to LHDN.

Handled correctly, the Financial Year End (FYE) ensures full compliance, accurate tax reporting, and a smoother payroll cycle for the new year. Handled poorly, it can result in penalties, reporting errors, employee disputes, and compliance risks.

This guide breaks down everything Malaysian employers must know about Financial Year End, including key documents, deadlines, and how Pandahrms helps simplify the entire process.

What Is Financial Year End (FYE)?

The Financial Year End (FYE) marks the official closing of a company’s accounting period. It is the point where businesses:

• Consolidate financial and payroll results

• Confirm yearly deductions and contributions

• Prepare mandatory forms and declarations

• Submit tax-related documents to LHDN

For HR and payroll teams, FYE determines the cut-off dates for employee tax forms, PCB reporting, statutory submissions, and year-end payroll accuracy. Ensuring every detail is correct is essential to avoid errors that could affect both the company and employees’ personal tax filings.

Common FYE Dates in Malaysia

Most companies choose 31 December as their FYE.
However, under the Companies Act 2016, organisations may select alternatives such as:

• 31 March

• 30 June

• 30 September

Your FYE determines your corporate tax deadlines and reporting cycle.

Key Documents Required for Financial Year-End

Employers must prepare, verify, and submit several statutory documents to LHDN and issue relevant forms to employees. Each document serves a specific purpose in confirming income, benefits, deductions, and employer obligations.

1. EA Form (CP8A)

A yearly statement issued to each employee detailing:

• Salary and allowances

• Benefits-in-kind (BIK)

• Bonuses, commissions, encashment

• PCB deductions

• Employer contributions

Deadline: Issued to employees by end of February.

2. CP8D

A digital submission to LHDN listing:

• Employee remuneration

• Benefits-in-kind

• Perquisites

• Monthly deductions

Submitted electronically via LHDN’s e-Data portal.

3. CP204 (Estimate of Tax Payable)

Companies must submit this estimate and revise it when necessary to ensure accurate corporate tax planning.

4. PCB (Potongan Cukai Bulanan) Records

Employers are required to:

• Maintain complete PCB deduction records

• Ensure monthly PCB is paid accurately and on time

PCB reporting must align with EA forms and CP8D submissions.

5. Employer’s Form E

A mandatory annual declaration summarising:

• Employee details

• Employment numbers

• PCB deductions remitted to LHDN

Deadline: 31 March every year.

6. Corporate Income Tax Filing

Companies must submit the relevant tax forms (Form C, PT, B, or P) within 7 months after their FYE.

7. Supporting Statutory Records

Employers must also retain updated year-end records for:

• EPF

• SOCSO

• EIS

• HRD Levy

• Overtime and allowances

• Claims and reimbursements

All documents must be kept for a minimum of 7 years.

How FYE Impacts HR & Payroll Operations

FYE is not just an accounting process—it has direct implications for HR compliance, payroll accuracy, and workforce planning.

1. Finalise Year-End Payroll Accurately

All salaries, allowances, deductions, and statutory contributions must be fully reconciled before closing the year.

2. Include Bonuses, Commissions & Incentives

All year-end payouts must be recorded and reflected properly in:

• EA Forms

• CP8D submissions

• Payroll statements

3. Handle Leave Encashment Properly

Unused annual leave encashment is considered taxable income and must be included in payroll and EA reporting.

4. Verify HR Records for Compliance

HR teams must ensure:

• Employee names and IC numbers match LHDN records

• Tax file numbers are updated

• Employment status changes are recorded

• Forms issued to employees match LHDN submissions

A mismatch can cause employee tax issues and employer penalties.

Preparation Steps for a Smooth Financial Year End

Employers can prevent last-minute issues by following these recommended steps:

• Reconcile salaries, allowances, overtime, and deductions

• Confirm employee identity details and tax file numbers

• Audit allowances, BIK, perquisites, and reimbursement classifications

• Verify statutory contributions (EPF, SOCSO, EIS, HRD levy)

• Align payroll data with finance and audited accounts

• Draft EA and E forms early to avoid deadline pressure

• Prepare CP8D and PCB records for digital submission

• Ensure terminated employees have complete records

Proper planning reduces errors and protects the company from LHDN penalties.

How Pandahrms Helps Employers Streamline Financial Year-End

Handling FYE manually can be stressful and error-prone. Pandahrms provides automation to simplify every step of the process.

With Pandahrms, HR teams can:

• Auto-generate EA Forms for all employees

• Prepare CP8D and PCB reports in a few clicks

• Ensure monthly contribution accuracy (EPF, SOCSO, EIS, HRD)

• Automate payroll calculations, including bonuses & encashments

• Maintain 7-year compliant records digitally

• Eliminate human errors with real-time validation

• Coordinate smoothly with finance teams via exportable reports

With everything centralised in one system, companies avoid last-minute rush and guarantee accurate, compliant submissions every year.

Frequently Asked Questions (FAQ)

1. Is December 31 compulsory as the financial year end in Malaysia?

No. Companies may choose any FYE date under the Companies Act 2016.

2. How does FYE affect tax filing deadlines?

Corporate income tax returns must be submitted within seven months after the chosen FYE.

3. Should EA forms follow the financial year or calendar year?

EA forms follow the calendar year (1 Jan – 31 Dec) and must be issued by end of February the following year.

4. Can a company change its financial year end?

Yes. Companies may notify SSM to change the date, subject to the rules under the Companies Act 2016.

5. What happens if employers miss FYE deadlines?

Failure to submit EA forms, Form E, CP8D, or tax filings may result in penalties, fines, and audits by LHDN.