Employment Contract Stamping in Malaysia

The‍‌‍‍‌‍‌‍‍‌ Malaysian government had a major policy change in 2025 regarding the necessity of stamping of employment contracts under the Stamp Act 1949. The result of this is that employers of various types of businesses from local startups to large foreign multinational corporations operating in Malaysia are put under a legal obligation to have the contracts with their employees duly stamped. Otherwise, they will be liable for monetary fines and suffer difficulties in terms of compliance with the ‍‌‍‍‌‍‌‍‍‌law. Malay Mail+1

Understanding this requirement is critical for HR teams, finance leaders, and business owners — especially as digital compliance tools like Advintek’s e-Invoice and digital document management solutions become essential for efficient regulation compliance.

What Is Employment Contract Stamping?

Stamping is an official process under Malaysian law where documents — including employment contracts — must bear a stamp duty to be legally recognized under the Stamp Act 1949. A stamped contract carries legal weight, becomes admissible in court, and ensures HR compliance with statutory requirements. Intune

Under the First Schedule, Item 4 of the Stamp Act 1949, employment contracts are treated as chargeable instruments subject to a fixed RM10 stamp duty per contract. Malay Mail

Key Dates & Mandatory Compliance Timeline

Time Period	Stamp Duty Obligations	Penalties
Before 1 Jan 2025	Employers must still stamp to regularize documentation, but stamp duty may be exempted and penalties waived*	No penalties if conditions met
1 Jan – 31 Dec 2025	RM10 per contract required	Penalty waiver if stamped by 31 Dec 2025
From 1 Jan 2026	RM10 per contract required	Penalties apply for late stamping

* Exemptions and waivers were introduced to ease the transition as announced by the Inland Revenue Board of Malaysia (LHDN). Human Resources Online

Important Deadlines Employers Should Know

31 Dec 2025: Last chance for penalty-free stamping of 2025 contracts. CentralHR
30 Days from signing (from 2026 onwards): Employment contracts must be stamped within this window to avoid penalties. KCCCI

Why Employers Must Comply

Even though the stamp duty is relatively small (RM10), the legal and operational implications are significant:

Legal Admissibility

An unstamped contract may be inadmissible in court until stamp duty (and penalties, if any) are paid — potentially undermining legal protections in disputes. CentralHR

Avoidance of Penalties

Failure to stamp on time can trigger escalating penalties under Section 47A of the Stamp Act 1949, such as:

RM50 + % (up to 3 months delay)
RM100 + % (more than 3 months delay) CentralHR

Stronger HR Governance

Regular stamping aligns with robust HR recordkeeping and compliance practices, strengthening audit readiness. Intune

Who Is Responsible for Stamping?

The employer is generally responsible for stamping and paying the duty — as they are usually the party that executes the contract first. CentralHR

This means HR and finance teams must coordinate closely to ensure:

Contracts are stamped within deadlines
Copies are properly stored
Records are digitally managed for audit trails

How Employers Can Simplify Compliance

While the rules aren’t new, enforcement is now far more stringent — especially with nationwide audits underway by the Inland Revenue Board. Malay Mail

Use Digital Tools for Stamp Duty and e-Invoicing

This is where Advintek’s compliance solutions are invaluable:

E-Invoice & Employment Contract Management — With the Advintek e-Invoice platform (https://einvoice.advintek.com.my/), employers can:

Digitally store stamped contracts
Track compliance deadlines
Maintain official records for audit readiness
Integrate invoice and contract workflows for HR + finance teams

The platform helps you bring legal document workflows into one unified digital system, reducing manual errors and ensuring you never miss a statutory requirement.

Practical Steps to Meet Stamping Requirements

Here’s a quick roadmap for HR and business leaders:

1. Audit Your Employment Contracts
- Classify contracts by signing date
- Identify those needing stamping or penalty regularization
2. Use LHDN’s STAMPS Portal or Digital Tools
- Submit contracts via the official LHDN STAMPS online system
- Consider integrating with Advintek’s digital compliance suite for automated tracking CentralHR
4. Track Deadlines Closely
- Time-stamp and digitally file each stamped contract
- Ensure contracts signed from 2026 onwards are stamped within 30 days
4. Maintain Relay Documentation
- Retain stamped copies in both physical and digital formats
- Log details in HR systems for audit trails

Why Digital Compliance Is Not Optional

With the legal landscape tightening and the IRB actively auditing employers for unstamped contracts, traditional manual workflows expose companies to risks. Embracing digital tools like Advintek’s e-Invoice compliance platform enables you to:

Automate stamping reminders
Digitally house documents with secure access
Link staffing records with financial compliance
Future-proof your HR operations against stricter regulation

Summary: What Employers Must Know

Employment contract stamping is now enforced with clear deadlines and penalties under the Stamp Act 1949. Malay Mail
All contracts must be stamped, usually within 30 days. KCCCI
RM10 stamp duty applies, with penalties for late compliance. CentralHR
Digital tools are essential for seamless compliance — and Advintek offers robust solutions at https://einvoice.advintek.com.my/.

Make compliance effortless. Elevate your documentation workflows.

Explore the platform today: https://einvoice.advintek.com.my/