Compliance with the Stamp Act 1949 has become an increasingly important part of employment administration in Malaysia. As Inland Revenue Board of Malaysia (LHDN) strengthens its enforcement and audit focus, employers should ensure that applicable employment documents are properly stamped to avoid penalties, compliance issues and complications during audits or employment disputes.
In August 2026, LHDN also issued an important clarification on how employment contracts should be treated for stamp duty purposes – https://www.hasil.gov.my/wp-content/uploads/20260807-Kenyataan-Media-HASiL_LAYANAN-DUTI-SETEM-BAGI-SURAT-CARA-PENGGAJIAN.pdf
Do Employment Contracts in Malaysia Need to Be Stamped?
The answer now depends partly on the employee’s monthly remuneration.
According to LHDN’s announcement dated 7 August 2026:
| Monthly Remuneration | Current Stamp Duty Treatment |
| RM3,000 and below | Employment contract does not need to be stamped or endorsed |
| Above RM3,000 | The main employment contract containing the employment terms and conditions should be stamped and endorsed |
| Ancillary employment documents relating to the same employment | Generally do not need separate stamping or endorsement, based on the latest LHDN clarification |
LHDN clarified that employment contracts with monthly remuneration not exceeding RM3,000 fall within the exemption category and do not need to be submitted for stamping or endorsement. For employees earning above RM3,000, only the principal or master employment contract containing the terms and conditions between employer and employee needs to be stamped.
How Much Is the Stamp Duty?
For an employment contract that is subject to stamp duty, the applicable duty is generally:
RM10 per employment contract
When Must the Employment Contract Be Stamped?
Generally, a chargeable employment contract should be submitted for stamping:
- within 30 days from the date it is executed in Malaysia; or
- within 30 days after it is first received in Malaysia, where it was executed outside Malaysia.
What Happens If the Contract Is Stamped Late?
| Timing | Late Stamping Penalty |
| Within the prescribed 30-day period | No late penalty |
| Late, but within 3 months after the stamping deadline | RM50 or 10% of the deficient duty, whichever is higher |
| More than 3 months after the stamping deadline | RM100 or 20% of the deficient duty, whichever is higher |
What About Contracts Signed Before 2026?
LHDN introduced transitional treatment following its 2025 announcement.
Employment contracts finalised before 1 January 2025 were granted stamp duty exemption and remission of late-stamping penalties.
Contracts executed between 1 January and 31 December 2025 were chargeable to stamp duty, but late-stamping penalties could be remitted where the contracts were stamped by the specified deadline.
For contracts executed from 1 January 2026 onwards, normal stamp duty and late-stamping requirements apply, subject to the latest exemptions and treatment announced by LHDN, including the current RM3,000 monthly-remuneration threshold.
Does Every HR Letter Need to Be Stamped?
Not necessarily.
Ancillary documents relating to the same employment relationship do not need separate stamping or endorsement.
How peopleoº Supports Employment Contract Stamping
For international businesses hiring employees in Malaysia, keeping track of employment laws, payroll obligations and stamp duty requirements can be challenging — especially when the company does not have its own HR or legal team in Malaysia.
We support the employment documentation and compliance process for employees hired.
Have a chat with us: https://peopleo-eor.com/contact-us/