Looking to hire in Malaysia

In Malaysia, employees must submit expense claims promptly to keep them eligible for reimbursement and favorable tax treatment. Current-year expenses must be submitted within 60 days of the expense date or within 30 days after returning from a business trip, whichever is later. Prior-year expenses must be submitted no later than February 1 of the following year.

Every expense in Malaysia must be supported by a valid source document such as a receipt or tax invoice; bank statements and transaction listings are not accepted as primary documentation. For phone and internet subscription fees, the employee’s full name must appear on the tax invoice, and if it is missing, the employee should add it in ink directly on the invoice before submitting the claim.

Phone, internet, coworking, and software subscription costs can be reimbursed tax-free when properly documented. Claims must be supported by a tax invoice or receipt that clearly shows the key transaction details, and for subscription services the employee’s name must appear on the tax invoice.

Work tools such as laptops, office equipment and supplies, and postal charges are generally reimbursed on a non-taxable basis when supported by a tax invoice or receipt. Documents must show the transaction date, amount, merchant or service provider, and a clear description of the goods or services; for some items, the employee’s name must also appear on the tax invoice.

Business travel costs are widely reimbursable on a non-taxable basis when backed by appropriate documents such as tax invoices, receipts, booking confirmations, tickets, or relevant e-wallet or transport statements. Documents must show the date, amount, merchant or service provider, and a clear description of the service; for many items, the employee’s name must also appear. Some vehicle-related expenses are subject to a combined annual tax-exempt cap.

Everyday meal costs and reasonable client entertainment can be reimbursed without triggering additional tax when properly supported. Claims should be backed by a tax invoice or receipt that shows the date, amount, and merchant or service provider, and in some cases a description of the purchase and the employee’s name.

A range of other business-related costs, from project expenses and training to insurance and certain personal welfare items, can also be reimbursed on a non-taxable basis when supported by proper documentation. Tax invoices or receipts must show the date, amount, merchant or service provider, and a clear description of the goods or services; for some items, the employee’s name must appear on the tax invoice.

Malaysia does not prescribe a standard statutory per diem rate. Per diem payments are generally treated as travel or subsistence allowances, separate from the MYR 6,000 annual cap for petrol, travel allowance and tolls. Employers should keep records of the approved per diem rates and the business purpose for which they are paid, and employees can submit these per diem amounts as allowances on the platform.

There is no standard mileage reimbursement rate in Malaysia, so employers may set their own rates. Mileage claims must be supported by a mileage log, which can be provided in the claim description and must include the date of travel, the employee’s full name, origin and destination, business purpose, distance in kilometers, and the rate applied.

Bonuses in Malaysia include both contractual and discretionary payments such as incentives and commissions, and they are taxed as additional income. They are subject to income tax and any applicable pension fund contributions, and because Malaysia uses progressive tax rates with withholding at source, the tax withheld in pay periods that include bonus payments may be higher than in regular periods.