A Guide to Malaysia’s Annual Tax Forms (Form EA and Form E)
It is said that nothing is certain in life, except for death and taxes. As of the time of publishing this article, it’s that time of year again that everyone is bracing for: tax season.
As an employer, you have two very important tax-related obligations at the beginning of every year:
- You need to prepare Form EA for every employee.
- You will also need to file Form E with the Inland Revenue Board, or Lembaga Hasil Dalam Negeri (LHDN).
Here, we break down each form so you can understand it better and file it appropriately.
What is Form EA?
Officially known as the “Statement of Remuneration from Employment”, put simply Form EA is a summary of the employee’s earnings from the employer for the year.
The purpose of Form EA is to enable employees to file their own taxes properly and declare their earnings to LHDN. That way, it can be determined which tax bracket they fall under.
It is mandatory for the employer to prepare Form EA for every employee – regardless of full-time, part-time, or fixed term status. As long as the employee has worked for more than seven days, and has received payment for their work, Form EA must be issued to the employee.
The following categories of employment earnings need to be included in Form EA:
- Gross salary
- Overtime pay
- Commission
- Bonus or other gratuities
- Allowances/perquisites (e.g. travel allowance, meal allowance)
- Benefits-in-kind (e.g. health insurance, company car and driver)
- Value of Living Accommodation (VOLA)
- Contributions to private pension (by employer)
- Compensation for loss of employment
While Form EA need not be submitted to LHDN by the employer, failure to prepare Form EA may result in a fine of up to RM20,000, imprisonment for a term not exceeding six months, or both.
The deadline for providing Form EA for the year ending 31 December 2022 is 28 February 2023. You can view a sample of Form EA here.
What is Form E?
Form E is a declaration made by the employer to LHDN on the number of employees, total remuneration paid to them, as well as the total amount of tax deductions for the year.
It is compulsory for the following employers to submit Form E:
- Companies registered with the Companies Commission of Malaysia (Sdn Bhd, Berhad, LLP), with or without employees
- Sole proprietors with employees
- Partnerships with employees
It is not compulsory for the following to submit Form E, but it is nevertheless recommended to file anyway:
- Sole proprietors without employees
- Partnerships without employees
Like Form EA, every employee – regardless of full-time, part-time, or fixed term status – must be reported in Form E.
Employers should note that LHDN no longer accepts manual submission of Form E. All calculations relating to Form E need to be done online using LHDN’s e-PCB system or a LHDN-approved payroll software. Failure to declare Form E may result in a fine of up to RM20,000, imprisonment for a term not exceeding six months, or both.
The deadline for filing Form E for the year ending 31 December 2022 is 31 March 2023. You can view a sample of Form E here.
Get Form EA and Form E Right with BrioHR
Calculating remuneration and tax deductions manually for one employee is already tedious, let alone tens or even hundreds of employees.
With LHDN-approved payroll software like BrioHR, you can generate Form EA and Form E with just a few clicks. Everything is filled in automatically and accurately. You can then distribute Form EA to all your employees via email, while Form E is prepared and ready for e-Filing with LHDN. All this can be done within just five minutes.
With a secure, scalable, user-friendly platform, BrioHR covers the entire employee journey from recruitment to onboarding, payroll and claims, to performance and analytics, and more.
This enables business owners and HR teams to truly focus on what matters most – people.
Visit briohr.com and get a free demo now.
It is said that nothing is certain in life, except for death and taxes. As of the time of publishing this article, it’s that time of year again that everyone is bracing for: tax season.
As an employer, you have two very important tax-related obligations at the beginning of every year:
- You need to prepare Form EA for every employee.
- You will also need to file Form E with the Inland Revenue Board, or Lembaga Hasil Dalam Negeri (LHDN).
Here, we break down each form so you can understand it better and file it appropriately.
What is Form EA?
Officially known as the “Statement of Remuneration from Employment”, put simply Form EA is a summary of the employee’s earnings from the employer for the year.
The purpose of Form EA is to enable employees to file their own taxes properly and declare their earnings to LHDN. That way, it can be determined which tax bracket they fall under.
It is mandatory for the employer to prepare Form EA for every employee – regardless of full-time, part-time, or fixed term status. As long as the employee has worked for more than seven days, and has received payment for their work, Form EA must be issued to the employee.
The following categories of employment earnings need to be included in Form EA:
- Gross salary
- Overtime pay
- Commission
- Bonus or other gratuities
- Allowances/perquisites (e.g. travel allowance, meal allowance)
- Benefits-in-kind (e.g. health insurance, company car and driver)
- Value of Living Accommodation (VOLA)
- Contributions to private pension (by employer)
- Compensation for loss of employment
While Form EA need not be submitted to LHDN by the employer, failure to prepare Form EA may result in a fine of up to RM20,000, imprisonment for a term not exceeding six months, or both.
The deadline for providing Form EA for the year ending 31 December 2022 is 28 February 2023. You can view a sample of Form EA here.
What is Form E?
Form E is a declaration made by the employer to LHDN on the number of employees, total remuneration paid to them, as well as the total amount of tax deductions for the year.
It is compulsory for the following employers to submit Form E:
- Companies registered with the Companies Commission of Malaysia (Sdn Bhd, Berhad, LLP), with or without employees
- Sole proprietors with employees
- Partnerships with employees
It is not compulsory for the following to submit Form E, but it is nevertheless recommended to file anyway:
- Sole proprietors without employees
- Partnerships without employees
Like Form EA, every employee – regardless of full-time, part-time, or fixed term status – must be reported in Form E.
Employers should note that LHDN no longer accepts manual submission of Form E. All calculations relating to Form E need to be done online using LHDN’s e-PCB system or a LHDN-approved payroll software. Failure to declare Form E may result in a fine of up to RM20,000, imprisonment for a term not exceeding six months, or both.
The deadline for filing Form E for the year ending 31 December 2022 is 31 March 2023. You can view a sample of Form E here.
Get Form EA and Form E Right with BrioHR
Calculating remuneration and tax deductions manually for one employee is already tedious, let alone tens or even hundreds of employees.
With LHDN-approved payroll software like BrioHR, you can generate Form EA and Form E with just a few clicks. Everything is filled in automatically and accurately. You can then distribute Form EA to all your employees via email, while Form E is prepared and ready for e-Filing with LHDN. All this can be done within just five minutes.
With 9 powerful modules, BrioHR’s software covers the entire employee journey from recruitment to onboarding, payroll and claims, to performance and analytics, and more.
This enables business owners and HR teams to truly focus on what matters most – people.
Visit briohr.com and get a free demo now.
