Starting January 1, 2025, all employment contracts in Malaysia must be stamped under the Stamp Act 1949. This comprehensive guide explains what employers need to know about this critical compliance requirement.
What is Contract Stamping?
Official Validation
Stamping validates employment contracts through Malaysia’s Inland Revenue Board (LHDN)
Stamp Duty
RM10 fee per contract copy
Compliance Marker
Physical or digital mark showing compliance with the Stamp Act 1949
Legal Requirements
Mandatory Compliance
All employment contracts are “chargeable instruments” under Schedule 1 of the Stamp Act
Based on the Signing Date
Stamp duty is calculated from when the contract was signed, not stamped
Employer Responsibility
Employers must handle stamping and any penalties, not employees
Universal Application
Applies to all nationalities, including foreign employees and companies
Why Stamping Matters
Legal Validity
Unstamped contracts cannot be used in court
Proof of Signing Date
Official evidence of when the contract took effect
Audit-Ready Compliance
Signals proper governance and prevents future issues
While the RM10 fee may seem negligible, skipping this requirement can have serious legal consequences for your business, especially if contract disputes arise.
Costs and Penalties
| Item | Amount |
| Stamp Duty per Contract Copy | RM10 |
| Late (31 days–3 months) | RM50 or 10% (minimum) |
| Late (>3 months) | RM100 or 20% (minimum) |
Late penalties are imposed based on Section 47A of the Stamp Act. Contracts must be stamped within 30 days of signing to avoid these additional fees.
How to Stamp Your Contracts
Complete & Sign
Finalize and sign the employment contract with all parties
Access STAMPS System
Log in to the official platform at https://stamps.hasil.gov.my
Submit & Pay
Upload the document and pay RM10 per copy
Maintain Records
Keep the stamped version in your HR records for compliance
Frequently Asked Questions
What if I forgot and it’s past 3 months?
You can still stamp the contract, but expect to pay the RM100 or 20% penalty, whichever is higher.Who should pay for the stamp duty?
The employer is responsible for payment as part of the onboarding process.Can I use the online system?
Yes, LHDN’s STAMPS system supports online submission and payment for convenience.
Does this apply to contract renewals?
Yes, any new contract or renewal document must be stamped within 30 days of signing.
Why Compliance Matters
Legal Protection
Ensures your contracts are admissible in court if disputes arise
Audit Readiness
Demonstrates proper governance during regulatory reviews
Professional Standards
Reflects a commitment to appropriate business practices in Malaysia
At Kanry, we support businesses in navigating cross-border employment compliance, including Malaysian HR regulations, work pass requirements, and foreign workforce deployment.
Whether you’re hiring locally or managing regional teams, our experts ensure you’re always aligned with the latest legal standards.
Need help staying compliant. Contact us now!
