The Inland Revenue Board of Malaysia (LHDN) has recently intensified its focus on the legal requirement for stamping employment contracts. While this has always been part of the Stamp Act 1949, many employers are now seeking clarity on the process, deadlines, and recent announcements regarding exemptions.

This comprehensive guide, based on the latest LHDN FAQ, will break down everything you need to know—from why it’s mandatory, to the special penalty waivers for 2025, and a step-by-step guide on how to get it done online.

Why Stamping Employment Contracts is Non-Negotiable

First, let’s establish the importance of this process.

•  

  It’s a Legal Requirement: Under the Stamp Act 1949, an employment contract is a legal instrument that must be stamped.
• It’s Admissible in Court: Crucially, an unstamped or improperly stamped contract cannot be used as evidence in a court of law. This can have serious implications in the event of an employment dispute.

The 2025 Special Exemption & Deadlines: What You Must Know

In a recent media statement, LHDN announced a special relief measure for employers. The rules are now tiered based on when the contract was finalized:

• For Contracts Finalized Before January 1, 2025:
  • You are granted a

    full exemption from the RM10 stamp duty and a full waiver of any late stamping penalties.
• For Contracts Finalized Between January 1, 2025, and December 31, 2025:
  • The RM10 stamp duty is still required.
  • However, a full waiver on late stamping penalties is automatically given, provided the contract is stamped on or before December 31, 2025. This is the most urgent action item for all employers this year.
• For Contracts Finalized On or After January 1, 2026:
  • The RM10 stamp duty is required, and

    all late stamping penalties will be fully enforced without exception.

What Qualifies as a “Contract” That Needs Stamping?

LHDN clarifies that it’s not just about the document title, but its content. If a document establishes an employer-employee relationship, it needs to be stamped. This includes:

•  

  Standard Employment Contracts: Including those for temporary, short-term, or part-time work.
•  

  Signed Letters of Offer: If the offer letter is the only document that binds the employer and employee, it is considered the contract and must be stamped.
•  

  Addendums and Supplementary Documents: Any additional signed document that is binding, such as an IT policy or a benefits explanation letter, is also considered a legal instrument and is subject to stamp duty.

A Step-by-Step Guide to Stamping via the STAMPS Portal

The entire process is now done online through LHDN’s STAMPS (Stamp Assessment and Payment System) portal.

1. Register an ID: First-time users must register for a user ID at https://stamps.hasil.gov.my. A company ID can be used to stamp documents for the company and its clients.
2. Start an Application: Log in and navigate to Borang Permohonan (Application Form) > Penyeteman (Stamping).
3.  

   Fill in Details: Select the stamp office, enter the date the contract was signed, and choose the document title “Perjanjian Pekerjaan” or “Employment Contract.”
4.  

   Upload & Submit: Fill in the required information and upload a scanned copy of the contract, then click “Hantar” (Submit).
5.  

   Assessment by LHDN: LHDN will process the application (typically within 5-7 working days for complete applications) and issue a notice of assessment.
6.  

   Make Payment: Once ready for payment, you can pay the RM10 duty online via FPX or Virtual Account.
7. Attach the Certificate: After successful payment, the system will generate a stamp certificate (sijil setem). You

   must print this certificate and attach it to the original physical contract as proof of stamping.

Other Key Questions Answered

•  

  Who is responsible for paying? The person who signs the document first, which is typically the employer.
•  

  What is the deadline for stamping? Within 30 days of the contract being signed in Malaysia.
•  

  What are the penalties if I miss the 2025 deadline? For contracts signed after Jan 1, 2026, late stamping can incur penalties of up to RM100 or 20% of the duty deficient, whichever is higher.

Stay Compliant with Ease

Managing HR compliance, from drafting contracts to ensuring every document is legally stamped on time, adds a significant administrative load for business owners.

At SMONE, our Payroll & HR Compliance services can help you streamline these processes. We ensure your employment documentation is in order and guide you through compliance requirements like stamp duty, so you can focus on building your team with peace of mind.

Contact us today to ensure your HR practices are fully compliant.

(Disclaimer)
This article is for general informational purposes and is based on the LHDN FAQ on Stamping of Employment Contracts updated on July 3, 2025. It does not constitute legal advice. Please consult with a qualified professional for advice tailored to your specific situation.