Employment Tax

Malaysia | Mandatory stamping of employment contracts in Malaysia

Summary

Following the Ministry of Finance’s decision to grant stamp duty exemption for employment contracts finalised before 1 January 2025, as announced in the Malaysian Inland Revenue Board (MIRB)’s media release, the MIRB has now issued a Frequently Asked Questions (FAQs) document dated 3 July 2025 (currently in Malay version). It confirms the mandatory requirement to stamp all employment contracts in accordance with Section 4(1) of the Stamp Act 1949.

The detail

Key points from the FAQs are as follows:

No.	Question	Answer
1.	What defines an employment contract for stamping purposes?	An employment contract generally reflects a relationship where an employer pays remuneration to an employee. Key features included in the employment contract are: Clear identification of the employer and employe A clause specifying a fixed rate of payment (e.g. salary/wages) made on a monthly or agreed basis as compensation for work performed Defined working hours and workplace location Requirement to comply with the employer’s policies and procedures Provision of statutory benefits (i.e. EPF, SOCSO, annual leave) Work carried out under the employer’s supervision and control Restriction on working for third parties without prior consent
2.	Is stamping of an employment contract mandatory?	Yes. All employment contracts, including fixed-term, part-time, short-term, and renewals or addendums of the contract must be stamped under Section 4(1) of the Stamp Act 1949.
3.	What is the importance of stamping the employment contracts?	To comply with the legal requirements under Section 36 of the Stamp Act 1949. Unstamped contracts are inadmissible as evidence in court, in accordance with Section 52 of the Stamp Act 1949.
4.	What is the stamp duty amount?	RM10 per original copy of the contract.
5.	What types of contracts require stamping?	Permanent, fixed-term, part-time, internship, and offer letters (if binding). Addendums such as IT policies or benefit letters are also subject to stamp duty.
6.	When must stamping be done?	Within 30 days from the date of signing (in Malaysia), or Within 30 days from the date received in Malaysia (if signed abroad).
7.	What are the penalties for late stamping?	RM50 or 10% of the underpaid duty (whichever is higher) if delay is within 3 months. RM100 or 20% (whichever is higher) if the delay exceeds 3 months.
8.	Who is responsible for paying stamp duty?	The party who signs the contract first, typically the employer.
9.	Can employment contracts be drafted in languages other than Malay or English?	For stamping purposes, employment contracts drafted in languages other than Malay or English must include a line-by-line translation within the same document. The translation must be performed by a certified translator, such as those accredited by the Malaysian Translators Association (https://www.malaysiantranslatorsassoc.com/ms/) or the Institute of Translation and Books Malaysia (https://www.itbm.com.my/).
10.	Are there any exemptions or penalty remissions?	Contracts signed before 1 January 2025: Full exemption from duty and penalties. Contracts that qualify for exemption can be submitted to the MIRB for endorsement to obtain a stamp duty exemption certificate at no cost. Contracts signed between 1 January and 31 December 2025: Subject to stamp duty; however, late stamping penalties will be waived if the contracts are duly stamped on or before 31 December 2025.This waiver will be applied automatically. Contracts signed from 1 January 2026 onwards: Subject to stamp duty and no exemption and penalties for late stamping will apply.
11.	How do employers stamp contracts?	Submit online via Malaysian tax authorities’ STAMPS portal: https://stamp.hasil.gov.my Print the stamp certificate and attach it to the original contract as proof of compliance. For detailed guidance, please refer to the user manual and FAQ available on the STAMPS portal.
12.	When and how can stamp duty be paid?	Stamp duty can be paid once the adjudication status is “ready for payment.” Payment can be made online through the following methods: FPX payment via STAMPS portal Virtual Account (VA) payment via Internet banking (Telegraphic Transfer, IBG, EFT, or Rentas)
13.	Is batch stamping available?	Yes, batch stamping is available on the STAMPS platform. The application process is as follows: Submit request for batch stamping via the Feedback Form on the official Malaysian tax authorities’ portal (HASiL) at https://maklumbalaspelanggan.hasil.gov.my/Public/ Users will then be provided with the user manual and XML specifications for batch stamping.

How we can help

We encourage all employers to review their employment contracts, and any other hiring contracts signed from 1 January 2025 onward to ensure they comply with the new stamping requirements. It is important to stamp these contracts within the allowed timeframe and to establish internal controls that prevent non-compliance.  It is also important for companies to be able to distinguish between a contract of service (employment contract) and a contract for service (independent contractors). This distinction is important as the applicable ad valorem rate for contract for services varies accordingly and is not RM10 per contract.

As a global mobility service organisation, our team provides assistance in obtaining stamping certificates from the Malaysian tax authority and provides professional guidance on the overview, process, and implications of this newly mandated requirement, as we aim to help our clients understand their obligations and ensure full adherence to these regulations.

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:

Hilda Liow
Partner

Lim Phing Phing
Partner

Wee Lay Har
Director

Loh Zi-Lynn
Senior Manager

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