Published On: 11/09/2025By

Scenario: Employee Resigns but Salary Still Not Paid After the 7th

Jason, a marketing executive in Kuala Lumpur, recently resigned from his job after serving his full one-month notice period. His last working day was on 29th August 2025 (Friday).

According to his employment contract, Jason’s final salary—including his last month’s wages and any unused leave encashment—should be settled by his employer. He expected to receive payment no later than 7th September 2025, as required by Malaysian law.

However, when the 7th passed, Jason still hadn’t received his final salary. Worried and frustrated, he asked:

👉 “Isn’t it illegal if my boss doesn’t pay me by the 7th?”

What the Law Says About Salary Payments in Malaysia

Under the Employment Act 1955, employers have strict obligations when it comes to paying wages:

  1. Section 20 of the Act

    • When an employment contract ends under Section 11(1) or Section 12 (notice period), the employer must pay all wages due within one day after the contract ends, after deducting lawful deductions.

  2. Section 21 of the Act

    • If an employee is dismissed without notice for misconduct (Section 13 or 14(1)(a)), the wages earned must be paid on the same day of dismissal.

    • If the employee resigns without notice (under Section 13 or 14(3)), the employer must pay the final salary within three days after the contract ends.

This means employers cannot simply delay salary payments beyond these legal timelines.

What About Tax Requirements (CP22A)?

According to Malaysian tax law, when an employee resigns, the employer must file Form CP22A with LHDN at least 30 days before the employee’s last working day.

👉 During this process, employers are legally required to withhold the employee’s final salary until LHDN issues clearance (tax release letter).
👉 This usually takes around 90 days.

So, if you have already resigned, your employer may legally hold your final salary until they receive clearance from LHDN. But this does not apply to regular monthly salary while you are still employed.

If Your Employer Delays Salary Payment After the 7th

The Employment Act requires that monthly wages must be paid no later than the 7th day of the following month.

  • If you are still employed and your salary is delayed beyond the 7th → this is a breach of the law.

  • If you already resigned, the final salary must be settled within the legal timelines (1 day, 3 days, or subject to CP22A clearance).

If your employer continues to delay payment without valid reasons:

✔ First, contact HR or management to clarify the reason.
✔ If there is no proper response, you have the right to file a complaint with the Labour Department (JTK).

Why Salary Delays Happen

  • Mismanagement of payroll processes.

  • Employers unaware of legal timelines.

  • Manual errors in calculations, deductions, or tax filings.

  • CP22A clearance process (final salary only).

These issues often happen in SMEs where HR still relies on manual payroll systems.

How Pandahrms Helps Employers Avoid Salary Payment Issues

Late salary payments don’t just risk legal penalties—they damage employer reputation and employee trust. This is where Pandahrms, an all-in-one HRMS, comes in:

✅ Automated payroll calculation – ensures accurate and timely salary computation.
✅ Compliance with EPF, SOCSO, EIS, and PCB – no more miscalculations or missed deadlines.
✅ Notice period & resignation management – tracks employee contracts, last working day, and ensures correct salary-in-lieu deductions.
✅ Final salary processing – integrates with CP22A requirements, making it easier for HR to track tax clearance and avoid mistakes.

By digitalising payroll and HR processes, companies can prevent late payments, avoid disputes with employees, and stay compliant with Malaysian law.

Final Thoughts

Yes, paying salary after the 7th is a breach of Malaysian labour law (except in cases involving tax clearance for resigned employees). Employers have a clear obligation to pay wages on time, whether the employee is still working or has resigned.

For HR teams and business owners, the safest way to avoid payroll mistakes is to adopt a digital payroll solution like Pandahrms. It helps automate compliance, streamline payroll, and protect your company from unnecessary disputes with employees and authorities.