Malaysia: Statutory and Financial Aid Impact to Employers and Employees During Covid-19 Crisis
On 27 March 2020, the new Prime Minister of Malaysia, Tan Sri Muhyiddin Yassin, announced the economic stimulus package. Valued at RM250bil, the package will benefit all Malaysians working in the country.
Governments and corporations, in response to the unexpected patterns of development, are mobilizing funds to ensure that both businesses and their staff are financially safeguarded from all the complexities that are arising from the Covid-19 situation.
Please find below a list of the relevant impacts relating to both employee and employer, with special emphasis on payroll, statutory and financial aid.
Impacts on the Employee
Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN)
- Deferment of PTPTN loan repayment for all borrowers for six months
Social Security Organisation (SOCSO)
SOCSO's Early Benefit Payment
- SOCSO has revised the pension and benefit payments schedule to insured persons and their dependants
- Monthly benefit payment will be credited earlier, beginning this month
- Invalidity Pension / Survivor's Pension
- Dependant's Benefit
- Periodic Permanent Disablement Benefit
- Constant-Attendance Allowance
Social Security Organisation (SOCSO)
- Implementation of Employment Retention Program (ERP) for employees who received unpaid leave notice. ERP is an immediate financial assistance provided for employees who have been instructed to take no paid leave by their employers who are economically affected by the Covid-19 pandemic.
- Skills training programme
- SIP PLUS 600 - Temporary financial incentive worth RM600 a month for a maximum of 3 months for Insured Persons with Loss of Employment and are registered with EIS but do not meet the Contribution Qualifying Conditions (CQC).
More information can be found here.
Employees Provident Fund (EPF)
- Reduction of statutory contribution rate for employees from 11% to 7%
More information can be found here.
Employees Provident Fund (EPF)
- Under the “i-Lestari Withdrawal” scheme, eligible EPF members can withdraw up to MYR500 per month from Account 2 for a period of 12 months starting from 1 April 2020 until 31 March 2021. This is open to all members aged below 55 years old.
More information can be found here.
Lembaga Hasil Dalam Negeri (LHDN)
Submission timeline of Return Form Filing for year 2020 will be extended:
- Form BE - Extended to 30.06.2020
- Form B - Extended to 31.08.2020
- Form M (Non-business) - Extended to 30.06.2020
- Form M (Business) - Extended to 31.08.2020
Lembaga Hasil Dalam Negeri (LHDN)
- Tax incentive for donations to tabung Covid-19
- In order to encourage donations from the public, tax deductions will be given for donations made to the following fund for the year of assessment 2020
Housing Loan Deductions
The Government welcomes the willingness of banking institutions to offer a 6-month moratorium, conversion of credit card balance to term loans and restructuring of corporate loans. Implement a six-month moratorium on loan repayments and restructure outstanding credit card balances involving about RM100 billion starting April 1 (employers who have got hire purchase and housing loan deductions from employee’s monthly payroll, please take note).
More information can be found here.
Impacts on the Employer
Human Resources Development Fund (HRDF)
- Levy Exemption for all 63 sub-sectors for six (6) months, starting March 2020 salary
- 2020 Training Stimulus Package – 80% subsidy on training course fee for all registered employers
More information can be found here.
Social Security Organisation (SOCSO)
Wage Subsidy Programme. This information is no longer available.
Lembaga Hasil Dalam Negeri (LHDN)
Submission timeline of Return Form Filing for year 2020 will be extended:
- Form E 2019 - Extended to 31.05.2020
Lembaga Hasil Dalam Negeri (LHDN)
- PCB (CP39) / CP38 payment deduction for March 2020 salary will be due on 30.04.2020
Lembaga Hasil Dalam Negeri (LHDN)
- Withholding tax which falls between 18 to 14.04.2020 can be made beginning 15.04.2020 - 30.04.2020
Employees Provident Fund (EPF)
- The EPF will introduce the Employer Advisory Services (EAS) programme on 15 April 2020
- This service includes options for deferral of payments, restructuring and rescheduling of employer contributions
More information can be found here.
To learn more about Malaysia’s tax and business landscape, browse our Global Insight Guide.
Find more information and guidance on coronavirus support measures for businesses, employers and employees on the activpayroll latest news page.