For years most HR teams quietly ignored the MYR 10 stamp duty that technically applies to every employment contract under the Stamp Act 1949. Although it should do so, the Industrial Court seldom insists on a stamped copy, so the risk has always felt remote. That complacency ended when the Inland Revenue Board (IRB) began auditing companies early this year and then, on 6 June 2025, issued a press release that both clarifies and tightens the rules.
A. The IRB's three‑tier timetable in 30 seconds
| Contract date | Duty & Penalty Position | Practical Takeaway |
|---|---|---|
| Before 1 Jan 2025 | No duty, late‑stamping penalty remitted | Filing is optional; useful only if you expect litigation in the civil courts |
| 1 Jan – 31 Dec 2025 | RM10 duty still payable. Penalty may be waived if you stamp and lodge a brief waiver appeal by 31 Dec 2025 | Treat this as an amnesty window – move fast |
| From 1 Jan 2026 | Normal 30‑day deadline. Penalties of RM100 or 20 % of duty, plus possible RM1,500 offence for signing an unstamped instrument | Build stamping into onboarding workflow |
B. Four actions to take before the year‑end
1. Understand all your HR contracts
There are many ways to do it and if you work with even a basic ERP software, it should be a matter of a few clicks only.
If you don't have that software, one quick way is pulling every signed HR instrument into one spreadsheet. Then split them by date executed so you know which fall into the 2025 amnesty bucket.
2. Bulk‑stamp 2025 contracts
Use the e‑Stamping portal (stamps.hasil.gov.my). Choose "Kemuka Rayuan" to upload the waiver request – a two‑line letter is enough. Contact us here if you require a sample letter. We will provide it to you free of charge.
Pay RM10 per contract through FPX and download the digital certificate.
3. Embed stamping in your onboarding checklist for 2026
Add a 30‑day countdown task to your calendar and register at least one HR executive as the company's e‑Stamping officer.
4. Communicate the change
Send a short memo to recruiters and line managers. Explain that the employer must bear the RM10 (s 29 Stamp Act) – it cannot be deducted from wages without consent.
C. Executive checklist – pin this to your wall
☐ Complete HR contract audit by
31 July 2025
☐ E‑stamp all 2025 contracts; lodge waiver appeals
well before 31 Dec 2025
☐ Add "Stamp within 30 days" to onboarding workflow
for new hires from 1 Jan 2026
☐ Budget: RM10 × expected headcount growth
☐ Train HR on the e‑Stamping portal; file stamped
copies in personnel folders
☐ Calendar reminder in Q4 2025 to check for any
extension or new exemptions.
D. Beyond employment contracts – don't forget the rest
The same RM10 duty hits any document "relating to service", including confidentiality deeds, secondment agreements and mutual separation deeds. Fixed‑term renewals count as fresh contracts and need fresh stamping.
Independent‑contractor or consulting agreements are different – duty is ad valorem (RM1 per RM1 000 of contract value, capped at RM500 000). Talk to tax before issuing a million‑ringgit consultancy.
E. Final thought
IRB's "clarification" is really a polite warning: We gave you an amnesty – now get your house in order. Follow the checklist above and you will spend a modest RM10 per hire instead of explaining a compliance failure to the tax auditor (or the board). Compliance has rarely been this cheap!
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
