📢 What Employers Must Do When Employees Leave in Malaysia

Employee exits are inevitable in any organization, whether due to resignation, retirement, contract expiry, or termination. In Malaysia, employers must follow specific steps to ensure compliance with labor laws and statutory requirements. Proper offboarding not only protects the company but also ensures a smooth transition for the employee.

Manage Resignation or Termination Properly

🕒

Notice Periods

Confirm the employee serves the required notice period under the Employment Act 1955 or their employment contract.

💬

Exit Interview

Conduct an exit interview to gather feedback and insights.

💰

Final Settlement

Calculate outstanding salary, unused leave, and allowances owed.

Statutory Compliance (Critical for Employers) Critical

This is the most important stage of offboarding in Malaysia. Employers must ensure all statutory obligations are met when an employee leaves:

🏦 EPF (KWSP)

✅Ensure the final contribution is made up to the employee’s last working day.
ℹ️No special form is required unless the company ceases operations.

🛡️ SOCSO & EIS

✅
Update the employee’s resignation date in the PERKESO Assist Portal.
👉 Visit Guide
🛑 Stop contributions once employment ends.

🏛️ LHDN (Tax)

📄Employers must submit Form CP22A (Notification of Cessation of Employment) to LHDN within 30 days of the employee’s resignation or termination.
✈️In cases where an employee is leaving Malaysia permanently, Form CP21 (Notification of Departure from Malaysia) must be submitted instead.

⚠️When CP22A is NOT required: If the employee is only changing departments within the same company or transferring to another branch under the same employer, CP22A submission is not necessary.
🧮Employers must also finalize PCB (Potongan Cukai Bulanan) deductions and issue EA forms for tax filing.

🎓 HRDF (If applicable)

Adjust contributions based on the employee’s final payroll.

⚠️

Warning: Failure to comply can result in penalties, audits, or delays in employee tax clearance.

Offboarding Administration

💻 Collect company property (laptops, access cards, uniforms).
🔒 Disable system access to protect company data.
✉️ Provide reference letters if requested.

How SQL Payroll HR System Simplifies Employee Exit Compliance

Managing employee exits can be complex, especially with multiple statutory bodies involved. The SQL Payroll HR System automates compliance and ensures accuracy during offboarding.

Key Features for Employee Exit Management:

📄 Auto-calculation of statutory contributions (EPF, SOCSO, EIS, HRDF, PCB) for final salary.

🌐 Built-in e-submission to government portals (KWSP, SOCSO, LHDN) for fast compliance.

📊 Instant statutory reports – SQL Payroll generates EA forms, SOCSO reports, and PCB schedules with a single click.

📝 Form Generation: SQL Payroll can automatically generate CP22A and CP21 forms, ensuring timely submission to LHDN.

🔐Secure payslip distribution with password protection for confidentiality.

💳 Bank Giro integration for seamless final salary payments.

📂 All-in-one HR management to track resignations, leave balances, and employee records.

By linking payroll directly to statutory reporting, SQL Payroll eliminates manual paperwork and ensures every exit is compliant.

💭 Final Thoughts

When an employee leaves your company in Malaysia, statutory compliance is the most critical step. Employers must ensure EPF, SOCSO, EIS, HRDF, and tax obligations are properly managed to avoid penalties.

The SQL Payroll HR System makes this process effortless by automating calculations, generating required forms like CP22A and CP21, and enabling direct e-submissions. With SQL Payroll, businesses can handle employee exits efficiently, stay compliant, and focus on growth.