As the year comes to an end, HR and finance teams in Malaysia face one major task: closing the year-end payroll. Between EA forms, CP8D files, and PCB reconciliations, even a single mistake can result in penalties or delays.
This checklist helps Malaysian employers prepare for a smooth, compliant, and stress-free payroll closing. It covers everything from verifying employee data to generating reports for LHDN and ensuring all statutory submissions are on time.
Table of Contents
- Why Year-End Payroll Matters
- The Ultimate Year-End Payroll Checklist for Malaysian Companies
- Common Payroll Mistakes to Avoid
- How Payroll Automation Simplifies Year-End Closing
Why Year-End Payroll Matters
Year-end payroll is not just the final salary run of the year. It is the point where all salary payments, deductions, and contributions must match official records.
Errors caught here can affect compliance with:
- LHDN (PCB, CP8D, EA forms)
- EPF (KWSP)
- SOCSO and EIS (Perkeso)
A proper checklist ensures your records are accurate, transparent, and ready for any audit.
The Ultimate Year-End Payroll Checklist for Malaysian Companies
1. Verify Employee Records
Ensure that all employee information is accurate and consistent across your HR and payroll systems. Check:
- Full name and IC number
- Employment start and resignation dates
- Tax file number (for PCB)
- EPF and SOCSO account numbers
Tip: Even a single wrong IC number can cause EA form rejection during LHDN submission.
2. Reconcile Monthly Payroll Reports
Compare your monthly payroll totals with your general ledger to ensure everything aligns. Review:
- Salary amounts for missing or duplicate entries
- Statutory contributions for each employee
- Inclusion of bonuses, commissions, and allowances in taxable income
Automation in systems like TimeTec Payroll helps detect mismatched or missing data instantly.
3. Review Statutory Deductions
. Review Statutory Deductions
Confirm that all EPF, SOCSO, EIS, and PCB contributions have been:
- Calculated correctly for each employee
- Submitted within the due date
- Reflected accurately in your yearly report
Submission deadlines:
- EPF: 15th of the following month
- SOCSO & EIS: 15th of the following month
- PCB: 15th of the following month
4. Process Bonuses and Year-End Incentives
If you are paying annual bonuses, ensure they are:
- Included as taxable income
- Reflected in PCB recalculations
- Finalized together with overtime and allowances
Tip: Use your payroll system’s built-in bonus calculator to preview net pay after deductions.
5. Generate and Verify EA Forms
The EA form (Form C.P.8A) summarises each employee’s annual pay, deductions, and benefits. Employers must:
- Generate EA forms using the payroll system
- Review all details for accuracy
- Provide forms to employees by the last day of February
6. Prepare CP8D File for LHDN Submission
The CP8D file is an electronic report summarising employee earnings and deductions. Submit it to LHDN through the e-Data Praisi system before filing your Employer Return (Form E).
7. Submit Employer Form E (C.P.8E)
Form E outlines your company’s total staff count, total remuneration, and PCB withheld.
Submission deadline: 31 March 2026 (for Year of Assessment 2025).
Late submissions can result in penalties or legal action.
8. Archive and Secure Payroll Data
Keep all payroll reports, payslips, and submission receipts for at least seven years, as required by the Malaysian Income Tax Act.
With TimeTec Payroll, all your payroll records are stored safely in the cloud and remain accessible for audit purposes.
Common Payroll Mistakes to Avoid
- Late or incorrect EA form submissions
- Missing PCB recalculation after bonus payments
- Misclassified allowance types
- Failure to update resigned employees’ tax status
Conducting a final payroll audit before submission helps prevent unnecessary corrections later.
How Payroll Automation Simplifies Year-End Closing
A reliable payroll system does more than calculate salaries. It becomes your compliance partner.
Automation in TimeTec Payroll helps by:
- Generating EA and CP8D forms automatically
- Updating statutory contribution rates based on current regulations
- Syncing attendance, leave, and claim data directly with payroll
- Storing historical payroll information securely for audits
A clear year-end payroll checklist helps you close the year with confidence and accuracy. By following these steps, Malaysian companies can avoid compliance issues, save time, and maintain accurate employee records.
If your team still manages payroll manually, now is the time to simplify your process. TimeTec HR automates your entire payroll cycle, from monthly salary runs to year-end reports, so your HR team can focus on people, not paperwork.