Stamp Duty Update: Pre-2025 Exemptions and 2026 Enforcement

Stamp duty on employment contracts has been in place for some time, but since January 2025, the Inland Revenue Board of Malaysia (LHDN) has been stepping up enforcement. It is important to know which contracts need stamping and when, so penalties can be avoided.

This article shares the key updates and what you need to do to stay compliant.

What Is Stamp Duty and Why Does It Matter?

Stamp duty is a government tax that gives legal documents, like employment contracts, official recognition.

Under the Stamp Act 1949, any agreements establishing an employer-employee relationship (that is, employment contracts) must be stamped within 30 days of signing.

This includes:

• Full-time employment agreements

• Part-time contracts

• Fixed-term/contract-based employment agreements

• Internship agreements

If these contracts are not stamped, they may not be legally valid, which can make them harder to enforce if a dispute arises.

---

What You Need to Know (Key Dates)

On 6 June 2025, LHDN issued an update to clear up questions about stamp duty on employment contracts.

• For contracts signed before 1 January 2025, there is no need to pay the RM10 stamp duty, and no penalties will be imposed for missing or late stamping.

  
  

• Contracts signed between 1 January and 31 December 2025 must be stamped at RM10 per contract. However, penalties for late stamping will be waived as long as the stamping is done on or before 31 December 2025. This applies even if the employee has already resigned.

  
  

• Starting from 1 January 2026, all contracts must be stamped within 30 days of signing.

  Penalties will apply for any delays:

  • Late by 31 days to 3 months: RM50

  • Late by more than 3 months: RM100

---

What Employers Should Do Now

To avoid future issues and penalties, HR departments and business owners should take the following steps:

• Review all employment contracts and organise them by their signing dates.

• Stamp all contracts signed in 2025 before 31 December 2025 to benefit from the penalty waiver.

• Implement internal SOPs to ensure all new contracts from 2026 onward are stamped within 30 days.

• Keep a stamped copy of each employment contract in your HR files for audit and compliance purposes.

• Use LHDN’s online STAMPS system at stamps.hasil.gov.my.

---

FAQs

1. Which employment documents require stamp duty?

   Any formal written agreement that establishes an employer-employee relationship must be stamped. This includes employment contracts, renewals, offer letters, internship agreements, and addendums.

2. Which documents do not require stamp duty?

   Documents that do not require signatures from both the employer and employee, such as promotion letters, confirmation letters, resignation letters, and salary increment letters, generally do not need to be stamped.

   
   

3. Who is responsible for paying the stamp duty?

   The employer is responsible for paying the RM10 stamp duty and ensuring the stamping is done on time.

---

How We Can Help

Keeping up with HR compliance changes such as stamp duty can be challenging. At Synergy Outsourcing, we make it our priority to help companies stay compliant, so HR teams can focus on managing and growing their workforce.

Let us handle the stamping process and compliance monitoring to keep your contracts up to date with the latest LHDN rules. Staying on top of these details should be our task, so you can focus on what matters most.

If you would like to learn more about how we can support your HR compliance needs, call us at 📞+6 010-277 0718 or email us at info at 📩 info@synergy-outsourcing.com