Key Takeaways
Q1: What is CP22A and why does it matter to Malaysian businesses with high staff turnover?
A: CP22A is a tax clearance form required by the Inland Revenue Board of Malaysia (LHDN) when an employee resigns. For companies with frequent staff changes, proper CP22A submission helps avoid penalties and ensures tax compliance.
Q2: How does CP22A work, and what’s the fast answer?
A: Employers must notify LHDN within 30 days before an employee’s final working day using Form CP22A. This enables LHDN to calculate outstanding taxes before final salary payment—ensuring lawful cessation procedures for businesses.
Q3: What should the reader do next?
A: Employers should review their HR and payroll workflows to ensure CP22A compliance. Partnering with Procheck Faculty Sdn Bhd ensures timely tax clearance submissions, risk reduction, and expert advisory support for long-term compliance success.
Form CP22A plays a vital role in ensuring tax compliance for employers in Malaysia, especially for companies experiencing frequent staff changes.
Issued by the Inland Revenue Board (LHDN), CP22A is the official notification that an employer must submit when an employee resigns, retires, or is terminated.
For businesses with high turnover, such as retail chains, F&B franchises, and growing SMEs, this form is not just a routine requirement —it is a compliance checkpoint that protects the company from potential tax risks and legal penalties.
At Procheck Faculty Sdn Bhd, our 25 years of experience in tax and corporate advisory services have helped many Malaysian companies navigate these obligations seamlessly.
Through structured process design and strategic advisory support, Procheck ensures that clients stay compliant with LHDN requirements while focusing on their business goals.
Clients like Noor Ariffshah (5 Star) have commended our dedication:
“Perkhidmatan Setiausaha Syarikat dari Procheck sangat profesional dan cekap. Mereka membantu saya menguruskan dokumentasi syarikat dengan teliti dan memastikan pematuhan undang-undang.”
Another satisfied client, Hans Empire, praised our support in tax and secretarial matters:
“Provide service account, tax, audit, company secretary.”
Failing to file CP22A on time can lead to serious consequences including financial penalties and audits by LHDN. In many cases, companies overlook this simple form amid rapid employee changes, putting their tax standing and corporate credibility at risk.
This is where Procheck’s expertise in tax services, payroll management, and corporate compliance proves invaluable — streamlining the entire process from employee exit notifications to tax clearance submission.
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This guide explores the importance of CP22A for Malaysian employers and how companies with high turnover can avoid penalties by adopting best compliance practices.
Let’s break down why CP22A is more than a form — it’s a critical step in safeguarding your organization’s financial integrity.
What Is CP22A and Why Every Employer Must File It When an Employee Resigns?
Form CP22A is a statutory tax-clearance notice issued by the Inland Revenue Board of Malaysia (LHDN) requiring employers to declare employee cessation. It ensures all income taxes are settled before final salary payment.
Employers in both the public and private sectors must submit CP22A within 30 days of an employee’s resignation, termination, or retirement.
For companies managing hundreds of employees, especially those with frequent turnover, this is a core element of tax compliance and audit readiness.
Procheck Faculty Sdn Bhd helps clients interpret these rules and align internal processes with LHDN expectations to avoid costly mistakes.
How to Handle CP22A Submissions When Employees Leave Unexpectedly?
Sudden resignations can cause reporting delays and documentation gaps. Procheck advises companies to keep real-time HR and payroll data synchronised so that a CP22A can be generated immediately.
Integrating payroll software and document templates helps companies generate and submit forms within hours rather than days.
When an employee quits without notice, employers should still notify LHDN based on the last known working date to avoid non-submission penalties.
Procheck’s tax consultants often review client cases where CP22A was submitted late because of uncoordinated departures and design corrective SOPs for future events.
Avoid LHDN Penalties: What Happens If You Fail to Submit CP22A on Time?
Late or missing CP22A forms can trigger LHDN audits, financial penalties, and even legal actions.
Under Section 83 of the Income Tax Act 1967, employers who fail to notify LHDN may face a fine between RM 200 and RM 20,000 and/or imprisonment for up to six months. Beyond monetary costs, companies risk losing corporate credibility.
Procheck’s Tax Services include routine compliance checks, timely reminders, and submission management to keep clients on schedule with LHDN’s deadlines and avoid reputational risk.
Step-by-Step Guide: How to Submit Form CP22A to LHDN Correctly
- Collect employee data – full name, tax reference number, identification card, and final salary details.
- Fill the CP22A form accurately with income breakdown, benefits, and deductions.
- Submit via MyTax portal or nearest LHDN branch within 30 days before cessation.
- Retain acknowledgement slip and supporting documents for audit purposes.
Procheck encourages companies to digitalise this process to create a transparent trail for internal auditors and external reviewers.
Why CP22A Is Crucial for Companies with High Staff Turnover
High turnover increases the frequency of employee cessations, which means more CP22A filings and greater risk of oversight.
F&B franchises, retail chains, and service-based SMEs in Malaysia often face these challenges. Without a robust system, tax clearance non-compliance can compound rapidly.
Procheck offers centralised tracking tools and checklists to ensure no employee exit is missed, minimising penalty exposure and maintaining strong corporate governance.
Common CP22A Mistakes Employers Make and How to Avoid Them
Frequent errors include missing employee tax numbers, incomplete salary data, and final payments issued before clearance. Such mistakes can invalidate a submission and delay LHDN approval.
Tips from Procheck:
- Verify employee records at onboarding.
- Cross-check with payroll and EPF/SOCSO contributions.
- Never release final payment until LHDN clearance is confirmed.
Does Your HR Team Know the Deadline for CP22A Submission? Here’s the Rule
Employers must submit CP22A not less than 30 days before the employee’s final day. Failure to comply can lead to a violation of Section 83(3).
To avoid this, Procheck recommends HR software with automated alerts and deadline tracking.
How Payroll Software Can Simplify CP22A Filing for Malaysian Businesses
Modern payroll systems can auto-generate CP22A forms and sync data directly to LHDN’s portal. By adopting digital tools, employers cut manual errors and speed up tax clearance.
Procheck integrates these solutions into their tax advisory framework, reducing processing time for clients by up to 50%.
The Employer’s Checklist: Documents Needed Before Submitting CP22A
- Employee’s IC or passport
- Latest EA form and payslips
- Outstanding bonus/commission details
- EPF and SOCSO records
- Letter of resignation or termination
A structured document set not only facilitates faster submission but also simplifies future audits or appeals.
When Should You File CP22A After an Employee Resigns or Terminates?
Submission should occur within 30 days prior to cessation of employment. For immediate terminations, the employer must file as soon as possible. Procheck helps design compliance timelines that align HR departures with tax reporting schedules.
Can You Submit CP22A Online? A Complete LHDN E-Filing Guide for Employers
Yes — the LHDN MyTax portal allows CP22A submission digitally. Employers must register for an e-Data Account and upload the form using secure credentials. This reduces manual errors and ensures instant acknowledgment receipt.
How to Manage CP22A for Foreign Employees and Contract Staff
Foreign employees and short-term contractors require extra attention since non-resident tax rules apply. Employers must include all allowances and benefits to avoid under-declaration.
Procheck provides cross-border tax advisory services for companies hiring expatriates or seasonal staff.
Understanding the Difference Between CP22, CP22A, and CP21 — and When to Use Each
Form | Purpose | Applicable Scenario |
CP21 | Tax clearance for employees leaving Malaysia | Used when an employee emigrates or transfers abroad |
CP22 | Notification of new employee | Submitted when a company hires new staff |
CP22A | Tax clearance for employment cessation | Filed when an employee resigns, retires, or is terminated |
Understanding these differences prevents filing the wrong form and reduces delays in LHDN approval. You can learn more about Malaysia’s tax structure at Tax System in Malaysia.
The Legal Risks of Ignoring CP22A: What Every HR Manager Should Know
Neglecting CP22A is not just a clerical error—it can be considered an offence under the Income Tax Act.
Non-compliance cases often lead to audits and back-tax investigations. Procheck helps businesses prepare for potential audits with comprehensive records and tax documentation.
Best Practices for HR & Payroll Teams to Stay Compliant with CP22A Regulations
- Implement internal compliance training programs.
- Maintain a centralised employee exit tracker.
- Coordinate with accounting and tax teams for data accuracy.
- Conduct annual compliance audits with Procheck’s advisory unit.
By embedding these best practices, companies can minimise administrative risks and safeguard their corporate standing with LHDN.
Form CP22A may seem like a simple administrative requirement, but its impact on corporate compliance is significant.
For Malaysian companies with frequent staff movement, each missed or delayed submission increases exposure to tax penalties and audit risks.
By implementing structured HR-tax coordination and using automated reminders, businesses can turn this recurring obligation into a well-managed compliance routine.
With over 25 years of experience, Procheck Faculty Sdn Bhd empowers organizations to stay compliant through professional tax advisory, accounting, and corporate secretarial services.
Our experts not only guide clients through the complexities of CP22A but also streamline documentation, internal controls, and submission accuracy—ensuring your company remains in good standing with LHDN.
Stay ahead of tax deadlines and safeguard your business credibility. Let Procheck Faculty Sdn Bhd handle your CP22A compliance, tax preparation, and payroll integration—so your team can focus on growth.
Explore our full range of Tax Services today to keep your company compliant and penalty-free.
FAQ
Q1: What is CP22A in Malaysia?
It’s an LHDN tax-clearance form employers must submit within 30 days before an employee’s resignation, retirement, or termination.
Q2: Can CP22A be filed online?
Yes. Employers can use the MyTax portal for secure e-submission and instant acknowledgement.
Q3: What happens if CP22A is not submitted on time?
Non-submission can lead to fines up to RM 20,000 and possible legal action by LHDN.
Q4: How can Procheck help with CP22A compliance?
Procheck provides comprehensive tax and corporate advisory solutions, including form preparation, submission tracking, and ongoing compliance monitoring.
Q5: Who should file CP22A?
Every employer in Malaysia is required to file CP22A when a private-sector employee ceases employment.
