The Inland Revenue Board (IRB) has reminded employers to properly handle their employees’ tax obligations, cautioning that gaps in compliance can create tax complications down the line. The reminder came from IRB corporate services department senior executive Sharifah Hakimah Syed Abu Bakar, speaking on Bernama Radio’s Tax Clinic programme on Tuesday, 9 June 2026.

Your PCB Deduction Depends On What Your Employer Has On File

The monthly tax deduction, known as Potongan Cukai Bulanan (PCB), is calculated based on personal details your employer holds, including your marital status, number of children, and income level. Sharifah Hakimah noted that employers are required to update these details regularly, since outdated information affects how much is deducted from your pay each month.

Employees can submit Form TP1 up to twice a year to inform their employer of individual deduction and rebate claims for PCB purposes. If you joined a new employer mid-year, details of your previous employment income are submitted via Form TP3. Sharifah Hakimah said employers are responsible for letting staff know these forms exist, so employees receive the full tax relief they are entitled to.

Joining Or Leaving A Company Triggers Separate Filings

Employers must notify the IRB when a new taxable employee joins, within 30 days of the start date. This is done through Form CP22, which has been submitted digitally via the e-CP22 application on the MyTax portal since 1 September 2024.

When an employee leaves or passes away, employers must file Form CP22A for the private sector or Form CP22B for the public sector. The form must be submitted 30 days before the termination date, or within 30 days of notification of death. This filing is what allows the IRB to issue a tax clearance letter, which employees may need to close out any outstanding tax balance.

Where Employer Lapses Affect Employees Directly

Most of the obligations outlined by the IRB sit with the employer, but the consequences of non-compliance tend to land on the employee. An incorrect PCB calculation over several months can produce a larger-than-expected tax balance when you file your annual return. A missing or inaccurate EA form, which employers in the private sector are required to prepare and submit alongside Form E and C.P.8D, can delay your filing or cause you to declare more taxable income than you should.

Sharifah Hakimah also noted that all documents relating to income, PCB, forms, and salary statements must be kept for up to seven years for audit and compliance purposes. If you ever need to reconstruct records from a previous employer and those documents no longer exist, that gap can complicate things considerably.

The PCB system is designed to spread your tax liability across the year rather than settle it in a single annual payment. If your employer’s records are outdated or filings are missed, your monthly deduction may not reflect your actual tax position. Personal circumstances such as marriage, a new child, or a mid-year job change all affect how much PCB should be deducted, and none of that updates automatically. 

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Christina Chandra

Christina writes about personal finance with an eye for making the complicated feel straightforward. She is drawn to the everyday money decisions people face and genuinely enjoys finding the clearest way to explain them. Between articles, she is probably napping, on a hiking trail, or terrorising her sister’s cats.

About THE AUTHOR

Christina Chandra

Christina Chandra

Christina writes about personal finance with an eye for making the complicated feel straightforward. She is drawn to the everyday money decisions people face and genuinely enjoys finding the clearest way to explain them. Between articles, she is probably napping, on a hiking trail, or terrorising her sister's cats.

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