Article 16: Stamp Duty on Employment Contracts
As of January 1, 2025, the enforcement of the Stamp Duty Audit Framework under Malaysia’s Stamp Act 1949 has brought about a major shift in employment compliance. With Section 47A now mandating that all employment contracts—including full-time, part-time, fixed-term, and internships—be stamped within 30 days of signing, many businesses are facing new administrative and financial challenges.
While the intent is to ensure transparency and legal enforceability of employment terms, this measure poses practical burdens, especially for SMEs and companies with frequent hiring cycles. Recognizing this, Alena Consultancy & Services is stepping forward to offer tailored solutions that ease the compliance process for employers across Malaysia.
What Does the New Requirement Mean for Employers?
Under the revised enforcement:
To ease the financial burden on employers—given the vast number of employment contracts across the country—and in recognition that tax audit findings on unstamped employment contracts are a relatively new development, the Inland Revenue Board (IRB) issued a media release on 6 June 2025 outlining the following:
Alena Consultancy & Services provides a full suite of support to help your business seamlessly comply with these new obligations:
✅ Employment Contract Review
Our consultants can audit your current employment contracts, identify unstamped agreements, and ensure they meet legal standards under the Stamp Act 1949.
✅ Stamp Duty Submission & Management
We handle the entire stamping process through LHDN’s STAMPS online system, including:
We understand that SMEs often operate with lean HR resources. That’s why we offer cost-effective packages tailored to the needs and scale of smaller businesses.
✅ Ongoing Support & Retainer Services
Our clients enjoy peace of mind with continuous support, ensuring all future employment contracts are stamped on time without hassle.
Take Action Today
The clock starts ticking the moment an employment contract is signed. Don’t leave compliance to chance.
Let Alena Consultancy & Services help you stay ahead.
Contact us today for a free initial consultation
Tell: +60183755170
Email: hello@alena.com.my
Website: https://www.alena.com.my
Source:https://www.thestar.com.my/news/nation/2025/05/19/stamp-duty-on-employment-contracts-burdens-businesses-says-association
While the intent is to ensure transparency and legal enforceability of employment terms, this measure poses practical burdens, especially for SMEs and companies with frequent hiring cycles. Recognizing this, Alena Consultancy & Services is stepping forward to offer tailored solutions that ease the compliance process for employers across Malaysia.
What Does the New Requirement Mean for Employers?
Under the revised enforcement:
- All employment contracts must be stamped at RM10 per copy.
- Contracts must be stamped within 30 days of execution.
- Penalties apply for late stamping:
- RM50 or 10% (whichever is higher) if delayed up to 3 months.
- RM100 or 20% (whichever is higher) for delays beyond 3 months.
- Contracts with monthly wages below RM300 are exempt—an almost irrelevant threshold, given Malaysia’s current minimum wage of RM1,700.
To ease the financial burden on employers—given the vast number of employment contracts across the country—and in recognition that tax audit findings on unstamped employment contracts are a relatively new development, the Inland Revenue Board (IRB) issued a media release on 6 June 2025 outlining the following:
- Employment contracts executed before 1 January 2025 are exempt from stamp duty under Section 80(1A) of the Stamp Act 1949, as empowered by the Minister of Finance. Additionally, any late stamping penalties for these contracts will be waived.
- Employment contracts executed between 1 January 2025 and 31 December 2025 must be stamped. However, late stamping penalties will be waived provided the contracts are stamped by 31 December 2025.
- Employment contracts executed on or after 1 January 2026 are subject to mandatory stamping, and any delays in stamping will incur penalties as provided under the law.
Alena Consultancy & Services provides a full suite of support to help your business seamlessly comply with these new obligations:
✅ Employment Contract Review
Our consultants can audit your current employment contracts, identify unstamped agreements, and ensure they meet legal standards under the Stamp Act 1949.
✅ Stamp Duty Submission & Management
We handle the entire stamping process through LHDN’s STAMPS online system, including:
- Preparation of documents
- Electronic submission
- Tracking and confirmation of stamp duty payments
We understand that SMEs often operate with lean HR resources. That’s why we offer cost-effective packages tailored to the needs and scale of smaller businesses.
✅ Ongoing Support & Retainer Services
Our clients enjoy peace of mind with continuous support, ensuring all future employment contracts are stamped on time without hassle.
Take Action Today
The clock starts ticking the moment an employment contract is signed. Don’t leave compliance to chance.
Let Alena Consultancy & Services help you stay ahead.
Contact us today for a free initial consultation
Tell: +60183755170
Email: hello@alena.com.my
Website: https://www.alena.com.my
Source:https://www.thestar.com.my/news/nation/2025/05/19/stamp-duty-on-employment-contracts-burdens-businesses-says-association
Jul 24,2025