Guide to TP3 Form 2023 in Malaysia
Introduction
The Malaysia Inland Revenue Board (LHDN) mandates all newly hired employees to declare their previous employment income from the current year to their new employer. This process is facilitated through the TP3 Form, ensuring precise calculation of PCB/MTD amounts in the payroll system. This guide provides comprehensive information on how to utilize the TP3 Form for the year 2023.
Understanding the TP3 Form
What is the TP3 Form?
The TP3 Form is a compulsory document for new employees to report their income from previous employments within the same tax year. The primary purpose is to assist new employers in accurately calculating Monthly Tax Deduction (MTD) amounts, ensuring compliance with Malaysia’s personal income tax laws.
Who is Required to Complete the TP3 Form?
– New hires with previous employment income in the current year
– Fresh graduates and new hires without previous income in the current year (submit blank amount with signature)
Key Components of the TP3 Form
Part A: Previous Employer’s Information
– A1: Company Name
– A2: Employer Tax Number (if applicable)
Part B: Personal Information
– B1: Name
– B2: IC Number
– B4: Income Tax File Number
Part C: Previous Employment Income
– C1: Taxable Employment Income for Current Year (e.g., Basic Salaries, OT, Allowances, etc.)
– C3: Total EPF Employee Contribution for Current Year (excluding Employer portion)
– C4: Zakat Paid in Current Year (if applicable)
– C5: Total Tax Paid in Current Year (excluding CP38)
Part E: Declaration
– Signature and Date
Important Notes:
– Round all figures to the nearest Ringgit without decimals
– Ensure accurate year-to-date income reporting, not annual income estimations
Utilizing the TP3 Form for Payroll Processing
How to Use the TP3 Form:
1. Accurate PCB/MTD Calculation: Utilize the figures provided in the TP3 Form to calculate PCB/MTD amounts accurately within the payroll system.
2. Data Entry: Enter the information from the TP3 Form into the payroll system, ensuring consistency and accuracy.
Responsibilities of Employers:
– Ensure employees complete and sign the TP3 Form.
– Retain the TP3 Forms for potential LHDN audits.
– Input the data into the payroll system.
For Employees Not Previously Employed in the Current Year:
– Sign the TP3 Form.
– Leave amounts blank or enter ‘0’.
Download the TP3 Form for 2023
– Download the TP3 Form in English
– Muat turun Borang TP3 dalam Bahasa Melayu
– Muat turun Nota Penerangan Borang TP3 dalam Bahasa Melayu
Conclusion
The TP3 Form is a crucial document ensuring transparent and accurate payroll processing for new hires in Malaysia. Employers must emphasize its importance and ensure compliance, while employees must provide precise and complete information. Adhering to these practices ensures a smooth transition for new hires and maintains compliance with LHDN requirements.
