Quick Summary

When an employee resigns, retires, is terminated or leaves the company for any reason, HR has more responsibilities than simply processing the employee's final salary.

Employers may need to:

• Calculate the employee's final salary and statutory payments
• Process EPF contributions
• Update PERKESO records
• Determine whether LHDN tax clearance is required
• Recover company assets
• Disable system access
• Complete employee offboarding documentation

This guide explains the essential HR checklist for employee offboarding in Malaysia.

At a Glance

1. Confirm the Employee's Last Working Day

Before processing the resignation, HR should confirm:

• Last working day
• Employment end date
• Notice period
• Whether notice has been fully served
• Outstanding annual leave
• Claims or commissions
• Company assets issued
• Whether the employee will leave Malaysia

These dates should be consistent across:

• Payroll
• Attendance records
• HR system
• Resignation letter
• LHDN submissions (where applicable)

2. Calculate the Final Salary

Where employment ends before the end of the salary period, the Employment Act 1955 provides the following formula for calculating wages for an incomplete month:

Monthly Salary ÷ Number of Days in the Wage Period × Number of Days Worked

Example

Encik Ali

Monthly Salary:

RM6,000

Last Working Day:

20 August

August has 31 days.

Calculation:

RM6,000 ÷ 31 × 20

= RM3,870.97

Besides salary, HR should also review:

3. Check Notice Period, Payment in Lieu & Notice Buyout

HR should review the employment contract and determine whether the employee:

• completed the contractual notice period;
• is being released early by mutual agreement;
• is required to make a notice buyout (payment in lieu of notice);
• will receive payment in lieu of notice from the employer; or
• has any lawful deductions relating to the notice period.

Example

Encik Ali is required to serve 2 months' notice, but he wishes to leave after serving only 1 month.

If the employer agrees to an early release, the remaining 1 month's notice may be settled through a notice buyout, subject to the employment contract or a written agreement.

HR Tip: Do not automatically deduct notice buyout from the employee's final salary without a contractual or legal basis.

4. Review Unused Annual Leave

Before processing the final payroll, HR should review the employee's annual leave balance.

Under the Employment Act 1955, where an employee's employment is terminated and the employee has earned but not taken statutory annual leave, the employer is generally required to pay wages in lieu of the unused annual leave.

HR should review:

• Annual leave entitlement
• Leave taken during notice period
• Negative leave balance
• Contractual annual leave benefits beyond the statutory minimum

Example

Encik Jason

Annual Leave Entitlement:

12 days

Unused Annual Leave:

5 days

Monthly Salary:

RM3,120

Company payroll calculation basis:

26 days

Daily Rate

RM3,120 ÷ 26

= RM120.00

Unused Annual Leave Payment

RM120 × 5

= RM600.00

This amount should generally be included in the employee's final payroll.

Note: The calculation basis (26 days, Actual Calendar Days, or another contractual method) should follow the applicable law, employment contract and company policy.

5. Process the Final EPF Contribution

For an employee leaving the company, employers generally do not need to submit a resignation form to KWSP.

HR should:

• Include all EPF-liable wages in the employee's final contribution
• Submit contributions within the statutory deadline
• Stop future contributions after employment ends
• Keep payroll and contribution records

6. Update PERKESO (SOCSO & EIS)

After the employee leaves, HR should update the employee's resignation date through the PERKESO ASSIST Portal.

General process:

1. Login to ASSIST Portal
2. Select My Sites
3. Registration
4. Update
5. Update Employee Resigned Date
6. Select employee
7. Enter resignation date
8. Save

This keeps the employee contribution records accurate.

7. Determine Whether CP22A Is Required

Not every resignation requires CP22A.

For employees who fall within LHDN's tax clearance requirements, employers should submit CP22A through MyTax e-SPC.

Submission should generally be made:

• At least 30 days before the employee's cessation date; or
• Within 30 days after the employer is informed of the employee's death.

CP22A may not be required if:

• The employee is subject to Monthly Tax Deduction (PCB); or
• The employee's remuneration is below the PCB threshold.

Always refer to the latest LHDN guidance before submission.

8. Determine Whether CP21 Is Required

CP21 is different from CP22A.

CP21 applies when an employee intends to leave Malaysia for more than three months.

Where applicable, employers should submit CP21 through MyTax e-SPC at least 30 days before the employee's expected departure.

9. Tax Clearance & Final Payment

Where tax clearance applies, employers may be required to withhold monies payable to the employee, including:

• Salary
• Bonus
• Commission
• Gratuity
• Compensation
• Other final payments

until:

• LHDN issues tax clearance; or
• The statutory withholding period expires.

Do not automatically withhold payments for every departing employee. This requirement applies only where tax clearance is required.

10. Collect Company Assets

Before the employee leaves, ensure all company property is returned.

Typical assets include:

• Laptop
• Charger
• Mobile Phone
• Access Card
• Office Keys
• Security Token
• Company Credit Card
• Documents
• Uniforms
• Other Company Equipment

HR should obtain a signed asset return acknowledgement.

11. Disable System Access

Coordinate with IT to:

• Disable email
• Disable HRMS access
• Disable payroll access
• Disable finance systems
• Remove VPN access
• Transfer work ownership
• Redirect important emails
• Remove user from internal groups

HR Exit Checklist

Employment & Payroll

☑ Confirm final working day

☑ Review notice period

☑ Process notice buyout or payment in lieu (where applicable)

☑ Calculate incomplete-month salary

☑ Calculate and pay earned but unused annual leave

☑ Process bonus, commission and claims

☑ Prepare final payslip

Statutory

☑ Final EPF contribution

☑ Update PERKESO ASSIST

☑ Determine whether CP22A is required

☑ Determine whether CP21 is required

☑ Submit through MyTax e-SPC where applicable

☑ Keep statutory acknowledgement records

Administration

☑ Collect company assets

☑ Disable system access

☑ Conduct handover

☑ Update employee records

☑ Conduct exit interview (if applicable)

Official Resources

Frequently Asked Questions

Does every employee require CP22A?

No. Employers should first determine whether the employee falls within LHDN's tax clearance requirements.

Can annual leave replace the notice period?

Not automatically.

Whether annual leave can offset the contractual notice period depends on the employment contract, company policy and mutual agreement between the employer and employee.

Can the employee buy out the notice period?

Yes, if permitted under the employment contract or agreed by both parties. The buyout amount is usually equivalent to the salary for the unserved notice period.

Do employers need to notify KWSP when one employee resigns?

Generally, no. Employers simply process the employee's final EPF contribution and cease future contributions after employment ends.

Should PERKESO be updated?

Yes. HR should update the employee's resignation date through the PERKESO ASSIST Portal.

Key Takeaway

Employee offboarding is more than processing a resignation letter. HR should ensure the employee's final salary, notice obligations, annual leave, statutory contributions, tax clearance, company assets and system access are all managed accurately and in accordance with Malaysian employment laws.

Using a structured exit checklist helps employers stay compliant, reduce administrative errors and provide a smooth and professional offboarding experience.