As a company in Malaysia, it’s crucial to guide your employees who are first-time taxpayers to ensure they comply with the country’s tax laws. Here are some tips to help you guide your employees through the process.
Understand the Basics of Taxation
Before you start guiding your employees, it’s important to understand the basics of taxation in Malaysia. Malaysia operates a self-assessment system for income tax, which means that taxpayers are responsible for calculating their own tax liability and submitting their tax returns on time. The income tax rates vary depending on the income level, with the highest rate being 30%.
Encourage Early Registration
As an employer, you should encourage your employees to register with the Inland Revenue Board (IRB) as soon as they start working. This will help them avoid any potential penalties or fines for late registration. The registration process is simple, and your employees can register online or in person at the nearest IRB office.
Four simple tools from EasyWork will help companies to streamline communication with employees, especially on crucial topics such as taxation.
Keep Accurate Records
It’s important for your employees to keep accurate records of their income, deductions, and expenses throughout the year. This will make it easier for them to calculate their tax liability at the end of the year and submit their tax returns on time. Encourage your employees to keep all their receipts, invoices, and other documentation related to their income and expenses.
Employers or HR can utilise EasyWork’s Payroll feature to generate and keep digital records of employees’ salary
Provide Guidance on Tax Deductions
Your employees may be eligible for tax deductions, which can help reduce their tax liability. As an employer, you can provide guidance on the types of deductions that are available, such as EPF contributions, life insurance premiums, and education fees. Encourage your employees to take advantage of these deductions to minimise their tax liability.
Educate on Filing Tax Returns
Filing tax returns can be a daunting task for first-time taxpayers. As an employer, you can provide guidance on how to file tax returns and the documents required. The deadline for filing tax returns in Malaysia is April 30th of the following year, so make sure your employees are aware of this and encourage them to file their returns early.
Employers or HR can utilise EasyWork’s Document feature to store PDF versions of the year-to-date tax deduction schedule.
Here’s a checklist for first time taxpayers:
In conclusion, guiding your first-time tax-paying employees can be a straightforward process if you follow these tips. By understanding the basics of taxation, encouraging early registration, keeping accurate records, providing guidance on tax deductions, and educating on filing tax returns, you can help your employees comply with Malaysia’s tax laws and avoid any potential penalties or fines.
