On 6 June 2025, LHDN (Inland Revenue Board of Malaysia) issued a media release clarifying the stamp duty treatment for employment contracts, following increased enforcement activities under the Stamp Act 1949.
Employers should take note of the latest exemptions and requirements to ensure compliance.
Key Highlights
- Employment contracts that were signed before 1 January 2025 are exempted from stamp duty, and no penalties will be imposed for late stamping.
- Employment contracts signed between 1 January 2025 and 31 December 2025 are subject to the standard RM10 stamp duty, but no penalty will be charged if they are stamped on or before 31 December 2025.
- Employment contracts signed from 1 January 2026 onwards are subject to the standard RM10 stamp duty, and any delays in stamping will be subject to penalty.
What Should Employers Do?
Moving forward, all employment contracts should be stamped. Employers should conduct a review of all employment contracts that were signed from 1 January 2025. If they have not been stamped, they can be submitted for stamping and no penalty will be charged.
Employers are responsible for ensuring they meet the requirements under the Stamp Act 1949 and failure to comply may result in financial penalties.
For further clarification or assistance in your employment law matters, please contact our employment law practice.
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This article was written by Lim Zi-Han (Partner) from Donovan & Ho’s employment law practice.
Donovan & Ho is a law firm in Malaysia, and our employment practice group has built a reputation for providing strategic employment advice to local and global organisations. Our team of employment lawyers provide advice on employment law and industrial relations including review of employment contracts, policies and handbooks, advising on workforce reductions, and managing dismissals of employees for poor performance or misconduct. We also represent clients in unfair dismissal claims and employment-related litigation. Have a question? Please contact us.
