Understanding CP22, CP22A, and CP21: Employer Responsibilities in Malaysia
Employers in Malaysia are required by law to notify the Inland Revenue Board of Malaysia (LHDN) of certain employee-related changes, including new hires, cessation of employment, and employees leaving Malaysia.
These notifications are made using Form CP22, CP22A, and CP21. Each form serves a specific purpose, and all come with strict submission deadlines.
Failure to comply may result in a fine between RM200 and RM20,000 or imprisonment for up to six months.
This article by CentralHR explains what each form means, when it needs to be submitted, and when employers are exempted.
1️⃣CP22 – Notification of New Employee
What is CP22?
Form CP22 is used to notify LHDN when an employer hires a new employee. It allows LHDN to open or update the employee’s income tax record, ensuring that Monthly Tax Deduction (PCB) calculations can be properly monitored.
When must CP22 be submitted?
Employers must submit Form CP22 within 30 days from the employee’s commencement date.
Starting 1 September 2024, CP22 must be submitted electronically via the MyTax portal using the e-CP22 application. Manual submissions are no longer accepted.
Employer tip
To avoid delays, employers should send new hire details to their payroll provider or HR department immediately upon confirmation of employment, even before the first payroll cycle.
2️⃣ CP22A / CP22B – Notification of Employee Cessation
What are CP22A and CP22B?
- CP22A – For private sector employers
- CP22B – For public sector employers
These forms notify LHDN when an employee ceases employment, whether through termination, retirement, or death.
When must it be submitted?
Employers must file CP22A/CP22B not less than 30 days before the cessation date, or immediately upon cessation if advance notice isn’t possible.
All submissions must be done online via the MyTax e-SPC application.
When is CP22A/CP22B required?
Submission is required when:
- The employee receives termination compensation, gratuity, or ex-gratia, or
- The employee’s income is chargeable to tax and not fully covered by PCB deductions.
When is CP22A/CP22B not required?
According to LHDN’s official guideline, employers are exempted from submitting CP22A/CP22B if:
- The employee’s income is not taxable, or
- The employee is Malaysian and:
- earns below the PCB threshold and receives no termination payment, or
- income has already been subject to PCB and no termination payment is made.
Key takeaway
If no termination benefit is paid and the employee’s income has been subject to PCB, CP22A/CP22B is not required.
However, employers should still verify case-by-case to avoid missing mandatory submissions.
3️⃣ CP21 – Notification for Employees Leaving Malaysia
What is CP21?
Form CP21 must be submitted when an employee who is chargeable to tax is about to leave Malaysia for more than three months or permanently. This form allows LHDN to review the employee’s tax records and issue a tax clearance letter (Surat Penyelesaian Cukai, SPC).
When must CP21 be submitted?
Employers must submit Form CP21 at least 30 days before the expected date of departure.
From 1 January 2024, CP21 submission is mandatory online through the MyTax e-SPC application.
Important requirements
- Employers must withhold any monies payable (salary, bonus, gratuity, etc.) to the employee until 90 days after LHDN receives the CP21, unless earlier approval is given.
- CP21 is not required if LHDN is satisfied that the employee frequently travels abroad as part of their job.
Why These Forms Matter
These three forms, CP22, CP22A, and CP21 ensure that employee income is properly recorded and that LHDN can collect the right amount of tax before an employee joins, leaves, or departs Malaysia.
Employers who maintain consistent submission practices demonstrate good compliance and reduce the risk of LHDN penalties.
✅ Quick Summary for Employers
| Form | Purpose | Deadline | Submission Method | Required When |
| CP22 | Notify new employee | Within 30 days of start date | e-CP22 via MyTax | For all new hires |
| CP22A / CP22B | Notify cessation of employment | 30 days before cessation or immediately upon cessation | e-SPC via MyTax | Only if taxable or receiving termination benefits |
| CP21 | Notify employee leaving Malaysia | 30 days before departure | e-SPC via MyTax | For departures exceeding 3 months |
Frequently Asked Questions (FAQ)
Q1: Do I need to submit CP22 for part-time or contract employees?
Yes, CP22 is required for all employees, including part-time or contract staff, if they are engaged under a contract of service and earn taxable income.
Q2: What happens if CP22A is submitted late?
Late submission can result in penalties up to RM20,000 or six months’ imprisonment. It may also delay the employee’s tax clearance, especially when termination payments are involved.
Q3: Can CP22A be skipped if the employee resigns voluntarily?
Only if the employee’s income is below the PCB threshold or has been fully taxed via PCB and no termination benefit is paid. Otherwise, submission is still required.
Q4: What if an employee leaves the country without notice?
Employers should submit CP21 immediately upon learning of the departure and withhold any outstanding payments until clearance is obtained.
Q5: Do expatriates fall under CP22 and CP21?
Yes. Expatriates are also subject to CP22 (upon joining) and CP21 (before leaving Malaysia), regardless of visa type or duration of stay.
Q6: How can I check submission status or proof?
You can log into MyTax (https://mytax.hasil.gov.my) → e-SPC → Application History to view submitted forms and acknowledgment receipts.
Final Thoughts
Timely submission of CP22, CP22A, and CP21 forms helps employers maintain smooth tax clearance processes and prevent unexpected penalties.
If you need assistance preparing or submitting these forms, CentralHR can help ensure your company’s LHDN compliance is accurate, timely, and stress-free.
CentralHR
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