As the end of the financial year approaches, businesses in Malaysia gear up for the annual ritual of income tax filing. For employers, navigating through the intricacies of EA form is crucial to ensure compliance with Malaysia's tax regulations. In this guide, we'll break down the essentials of EA form and provide insights on overcoming common filing challenges.
What is an EA form?
EA form, officially known as the "Statement of Remuneration from Employment," plays a pivotal role in the financial landscape of both employees and employers in Malaysia. It goes beyond being a mere document; it serves as a detailed and comprehensive summary of an employee's annual earnings, capturing various facets of their compensation.
What should be included in EA form?
Gross Salary: This constitutes the core earnings of an employee before any deductions.
Overtime Pay: Any additional compensation for hours worked beyond the regular working hours.
Commissions: Amounts earned through sales or performance-related incentives.
Bonuses: Extra remuneration is provided as a reward for exceptional performance or during festive seasons.
Allowances: Additional payments beyond the regular salary, such as travel or meal allowances.
Benefits-in-Kind: Non-monetary benefits provided by the employer, like health insurance or a company car.
Other Perquisites: Additional advantages or perks associated with employment.
Value of Living Accommodation (VOLA): The calculated value of housing or accommodation provided by the employer.
Contributions to Private Pension (by Employer): Employer contributions to an employee's private pension fund.
Compensation for Loss of Employment: Any severance pays, or compensation provided due to the termination of employment.
Why is EA form important?
Empowering Employees: EA form empowers individuals with a clear breakdown of annual earnings for better financial awareness.
Accurate Tax Filings: EA form facilitates precise tax submissions, ensuring fair contributions to the taxation system.
LHDN Compliance: Mandatory EA form submission ensures compliance with Inland Revenue Board (LHDN) regulations.
Penalty Prevention: Timely completion of EA form is crucial for employers to avoid penalties.
Financial Planning Support: EA form aids employees in effective financial planning through detailed compensation insights.
What is the responsibility of employer in EA form?
Mandatory for All Employees: Regardless of employment status—full-time, part-time, or fixed term—if an employee has worked for more than seven days and received payment, EA form must be issued.
Submission Deadline: Employers must provide EA form for the year ending December 31, 2023, by February 28, 2024. The yearly forms can be downloaded directly from the LHDN website by the employers.
Consequences of Non-Compliance: Failure to prepare and issue EA form may result in penalties, including fines and imprisonment.
Overcoming Common Filing Challenges
Manual Calculations and Submissions: Simplify and enhance accuracy by implementing efficient processes, standardized templates, and workflows to reduce reliance on error-prone manual calculations.
Missing Submission Deadlines: Avoid penalties and legal consequences by utilizing proactive calendar management with reminders and alerts, ensuring timely EA form submissions through a well-organized schedule.
Keeping Up with Regulatory Changes: Stay compliant with evolving tax regulations by investing in continuous learning for HR and finance teams, fostering collaboration with industry experts, and attending workshops to stay updated on regulatory changes.
How do EA form and Form E complement each other in the context of Malaysian payroll?
While EA form provides a comprehensive summary of an employee's earnings and deductions throughout the financial year, Form E is an equally important document but from the employer's perspective. Form E is essentially the Employer's Return of Remuneration, and it encapsulates details about the company's overall payroll, including the total remuneration paid to employees, statutory contributions made, tax deductions and any other relevant particulars.
For organizations in Malaysia, completing Form E accurately is not just a legal obligation but also a strategic move to ensure compliance with tax regulations. This form enables employers to report their employees' income, ensuring that the appropriate taxes are deducted and remitted to the authorities.
As of now, manual submissions of Form E are no longer accepted by the Inland Revenue Board of Malaysia (LHDN). The emphasis has shifted towards a more efficient and streamlined process, urging employers to leverage LHDN's e-PCB system or a LHDN-approved payroll software like JustLogin, for the computation and submission of Form E.
Generate EA Form and Form E with JustLogin!
Our LHDN-compliant payroll software empowers you to generate EA Form and Form E with unparalleled ease – a mere few clicks, and the software takes care of the rest, ensuring accuracy and efficiency. Seamlessly distribute EA Form to your workforce via email, while Form E is prepared and poised for hassle-free e-Filing with LHDN.
In just a matter of minutes, JustLogin streamlines your tax documentation process, providing a swift and effective solution for your business needs. Rest assured that you will be up to date with the latest changes in tax rates and generate all the files you need easily with JustLogin – be it for PCB, EPF, SOCSO, or EIS.
How to submit Form E?
JustLogin offers valuable support notes tailored for Malaysian companies:
Forms that Malaysian Companies need to Prepare: A comprehensive guide to essential forms, ensuring businesses stay informed and compliant.
SOCSO - JustLogin Malaysia Payroll: Insights into SOCSO management, covering contribution rates and employer/employee responsibilities.
EIS - JustLogin Malaysia Payroll: Guidance on navigating the Employment Insurance System, simplifying compliance for businesses.
EPF - JustLogin Malaysia Payroll: Details on EPF contributions, rates, and seamless management through the JustLogin platform.
PCB - JustLogin Malaysia Payroll: A resource on PCB, covering income tax deduction methods, rates, and effective JustLogin management.
JustLogin will Lead the Way in EA Form Compliance for Malaysian Businesses
JustLogin is certified compliant with the Malaysian Government’s Potongan Caruman Bulanan (PCB) or Monthly Tax Deduction (MTD) requirements. You can generate all the reports that comply with tax requirements on a monthly or yearly basis.
JustLogin's AI-powered HR software and payroll module, equipped with features like automated calculations, intuitive workflows, and proactive reminders, serves as a comprehensive solution to effortlessly address common challenges in payroll and tax compliance.
With its user-friendly interface and advanced capabilities, JustLogin streamlines processes minimizes errors, and ensures timely submissions, empowering businesses to navigate these complexities with ease.
Reach out to us today and explore how JustLogin can enhance and simplify your HR tasks, making payroll and compliance a breeze. With JustLogin AI-powered HR software, you not only simplify your tax filing processes but also pave the way for a more efficient and compliant HR management system. Elevate your HR experience with JustLogin!