The Inland Revenue Board of Malaysia (LHDN) issued a media statement dated 7 August 2026 clarifying how stamp duty applies to employment contracts. The clarification sets out three types of treatment.

The first type covers instruments listed under the Exemption category in the First Schedule of the Stamp Act 1949. This includes employment contracts where the monthly salary does not exceed RM3,000. These contracts do not need to be stamped or endorsed at all. In simple terms, if an employee earns RM3,000 or less a month, the employer does not need to do anything with the contract for stamp duty purposes.

The second type covers instruments under the General Exemption category, referring to those exempted under section 35 of the Stamp Act 1949. These instruments are still exempted from stamp duty, but they must be endorsed. Endorsement means the document is submitted to LHDN for confirmation that it qualifies for the exemption. This step exists so that only the correct parties and the correct type of document can benefit from the exemption.

The third type applies to employment contracts where the monthly salary exceeds RM3,000. Here, only the main contract, the one setting out the actual terms and conditions of employment between employer and employee, needs to be stamped and endorsed. Any supporting documents linked to the same employment do not need separate stamping or endorsement.

LHDN said this clarification gives employers clarity and certainty on how to treat these documents, and makes it easier to comply with the Stamp Act 1949.

If you wish to focus on running and growing your business, our CFO advisory team can take care of your accounting, payroll, tax planning, e-stamping, corporate secretarial and compliance matters for you. Feel free to WhatsApp us at 010-246 2151.