The Inland Revenue Board (“IRB”) issued a media statement on 6 June 2025, clarifying stamp duty obligations for employment contracts as summarised below.
Contracts signed before 1 January 2025: These are exempt from stamp duty.
Contracts signed between 1 January 2025 and 31 December 2025: Mandatory stamping but late stamping penalties will be waived provided the employment contracts are duly stamped on or before 31 December 2025.
Contracts signed from 1 January 2026 onwards: Stamping must be completed within 30 days.
Following the media release on 3 July 2025, the IRB issued a set of Frequently Asked Questions (“FAQ”) on stamping of employment contracts in Malaysia.
Key points from the FAQ include:
| Stamp duty rate | The standard stamp duty for employment contract is RM10 |
| Legal consequences of non-stamping | Unstamped employment contracts are inadmissible as evidence in court proceedings. While this does not render the contract invalid, failure to stamp can adversely affect its enforceability |
| Employers’ responsibility | Employers are responsible for stamping employment contracts and are legally accountable for the agreement |
| Characteristics of employment contracts | A document that confirms an employer-employee relationship which typically includes lists both parties’ names, wage details, working hours, workplace, benefits, employer supervision, and restrictions on outside work. |
| Types of employment contracts that must be stamped | • All contracts binding both employer and employee • Supplementary documents or addendum to an offer letter, such as IT policies, employee benefits details, or study sponsorship information |
| Due date for stamping of contracts | • Signed in Malaysia – Stamp within 30 days of signing • Signed overseas – Stamp within 30 days of receipt in Malaysia |
| Penalty | • RM50 or 10% of the underpaid duty (whichever is higher) for late stamping within 3 months after due date for stamping • RM100 or 20% of the underpaid duty (whichever is higher) for late stamping exceeding 3 months after due date for stamping |
| Endorsement | • Employment contracts that are exempted from stamp duty must be submitted for endorsement to obtain the exemption certificate |
