Notice Period
Per contract (typically 1–3 months)
Final Pay
Within 7 working days
EPF Access
After resignation
Key Law
Employment Act 1955
Who does the Employment Act 1955 cover? Since 2023 amendments, the Employment Act applies to ALL employees in Peninsular Malaysia and Labuan regardless of salary. This means everyone is entitled to the protections below, including managers and professionals earning above the old RM2,000 threshold.
Step 1: Serving Your Notice Period
Your notice period is defined in your employment contract. In the absence of a contract term, the Employment Act 1955 sets minimum notice periods based on length of service.
Minimum Statutory Notice Periods (Employment Act 1955)
| Length of Service | Minimum Notice Period |
|---|
| Less than 2 years | 4 weeks |
| 2 years to less than 5 years | 6 weeks |
| 5 years or more | 8 weeks |
Most employment contracts for professionals specify 1–3 months. Your contract notice period overrides the statutory minimum if it is longer. If your contract period is shorter, the statutory minimum applies.
Key Points on Notice
- Submit a written resignation letter — email is acceptable; hard copy is better. State your last working day clearly.
- Notice starts the day after your resignation is acknowledged by your employer, not the day you hand it in.
- Your employer may counter-offer or request an extended notice — you are not obligated to accept.
- Garden leave: Your employer can place you on paid garden leave (stay home but remain on payroll) during your notice period — this is legal and common for senior roles.
Step 2: Pay-in-Lieu of Notice (Bayaran Ganti Notis)
Instead of serving the full notice period, either party can opt for pay-in-lieu — paying the equivalent salary for the unserved notice period.
- You can pay-in-lieu to leave immediately — your employer deducts the equivalent notice period salary from your final pay
- Your employer can pay-in-lieu to release you immediately — they pay you the notice period salary and you leave without working the notice
- The rate is your basic salary only — allowances and benefits are not included in the pay-in-lieu calculation unless specified in your contract
- Mutual agreement is best — get any early release in writing to avoid disputes on your final payslip
Step 3: Final Pay and Payslip
Under the Employment Act 1955, your employer must pay all wages due within 7 working days of your last day of employment.
- Final salary — pro-rated for the month if you leave mid-month
- Unutilised annual leave encashment — you are entitled to be paid for unused annual leave
- Any outstanding claims — expenses, overtime, allowances not yet paid
- Pay-in-lieu of notice — if applicable (as above)
- Deduction for unserved notice — if you are leaving before your notice period ends
- Request your final payslip in writing — keep it for your tax return and LHDN records
If your employer delays final pay: File a complaint with the Labour Department (Jabatan Tenaga Kerja) via
eaduan.jtksm.gov.my. Late payment is a violation of the Employment Act.
Step 4: Get Your Form EA
Form EA is your annual income statement from your employer — the Malaysian equivalent of a payslip summary for tax purposes.
- Employers must issue Form EA by 28 February of the following year for all employees who worked for them during that year
- If you resign mid-year, you will still receive your Form EA in February of the next year — or you can request it earlier for tax purposes
- Keep all your Form EAs if you changed jobs during the year — you will need one from each employer for your tax return
- Check for accuracy — ensure total income, EPF contributions, and PCB/MTD deductions are correct
Step 5: EPF (KWSP) — What Happens After Resignation
Your EPF savings remain in your account after resignation. You do not lose them.
- Employer contributions stop immediately after your last day. Your own contribution from your final salary is still deducted and remitted by the employer.
- Your EPF savings continue to earn dividends — the funds are not frozen, and EPF continues to credit annual dividends to your account.
- You can access Account 3 (Akaun Fleksibel) — under the 3-account EPF structure introduced in 2024, Account 3 funds can be withdrawn flexibly at any time.
- Account 1 and Account 2 remain locked until age 55 (full withdrawal) or specific approved purposes (housing, education, medical) before then.
- Update your EPF beneficiary while still employed — it is easier to do this via the MyKWSP portal or EPF counters while you have active employment status.
MyKWSP app: Use it to check your EPF balance, view contribution history, update beneficiary details, and apply for partial withdrawals — all without visiting an EPF office.
Step 6: SOCSO and EIS — What Happens
SOCSO (Pertubuhan Keselamatan Sosial / PERKESO)
- Employer contributions to SOCSO stop from your last month of employment
- SOCSO does not have a withdrawal-on-resignation facility — it is an insurance scheme, not a savings account
- SOCSO coverage lapses once contributions stop — if you are injured or fall ill after your last contribution month, you are no longer covered
- Permanent disability and invalidity claims may still be made if the condition arose while you were covered
EIS (Employment Insurance System) — Unemployment Benefits
EIS (Sistem Insurans Pekerjaan / SIP) provides temporary unemployment benefits if you lose your job. It also applies to voluntary resignation — but under more limited conditions.
- For retrenchment / VSS (Voluntary Separation Scheme): You are fully eligible. Claim immediately.
- For voluntary resignation: You are eligible for the Employment Retention Programme (ERP) if you resigned due to constructive dismissal (intolerable workplace conditions, harassment, unreasonable pay cuts). Standard resignation for a new job does not qualify for EIS cash benefits.
- You ARE eligible for EIS job-matching and training benefits even for voluntary resignation — access these via the SIP Portal.
- Claim deadline: 60 days from your last day of employment. Do not miss this window if you are eligible.
- Claim via: sip.perkeso.gov.my or at any PERKESO office.
60-day deadline: EIS SIP claims must be submitted within 60 days of your last working day. After that, you forfeit the benefit — no extensions are granted.
Step 7: Tax Clearance
For Employees Staying in Malaysia (Normal Resignation)
If you are simply changing jobs within Malaysia, no special tax clearance process is needed. Your employer has been deducting PCB (Potongan Cukai Berjadual / monthly tax deduction) throughout the year.
- File your annual LHDN e-Filing as usual by 30 April of the following year
- Declare income from all employers in the same year using their respective Form EAs
- Check if PCB deducted equals your tax liability — if you underpaid, top up via e-Filing; if you overpaid, you will receive a refund
For Employees Leaving Malaysia (Form CP21)
If you are leaving Malaysia permanently or for a long period (emigrating, retiring abroad, relocating overseas), you must obtain tax clearance before your employer can release your final pay.
- Notify your employer at least 30 days before your last day — they must withhold your final pay until tax clearance is obtained.
- Your employer submits Form CP21 to LHDN (Inland Revenue Board) — notifying them that an employee is leaving Malaysia.
- LHDN issues a tax clearance letter (Surat Penyelesaian Cukai) — usually within 30 working days. Your employer can only release your final pay after receiving this letter.
- You may need to visit LHDN to submit any outstanding tax returns or settle any balance before clearance is issued.
Not leaving Malaysia? If you are resigning to join a new job in Malaysia, you do not need Form CP21 and there is no withholding of your final pay for tax purposes.
Step 8: Handover Best Practices
A clean handover protects your professional reputation and ensures smooth departure.
- Prepare a written handover document — list ongoing projects, key contacts, login credentials (to be handed to IT, not personal), pending tasks, and important deadlines
- Back up personal files before handing in devices — company devices are wiped on departure
- Return all company property — laptop, access cards, parking passes, company credit cards, equipment. Get a signed receipt of return.
- Request a reference letter or LinkedIn endorsement from your manager before your last day — it is harder to get after you leave
- Update your personal email on professional accounts — LinkedIn, professional association memberships, industry subscriptions — before your company email is deactivated
Resignation Checklist Summary
- Written resignation letter submitted with last working day stated clearly
- Notice period served or pay-in-lieu agreed in writing
- Final pay received within 7 working days of last day — chase if overdue
- Form EA received (by 28 Feb of following year, or request earlier)
- EPF Account 3 / beneficiary updated via MyKWSP app
- EIS SIP claim filed if eligible — within 60 days of last day
- Tax clearance (Form CP21) arranged if leaving Malaysia permanently
- Company property returned with signed receipt
- Reference letter / LinkedIn endorsement requested
- Personal email updated on all professional accounts before company email deactivated
Pro Tips — What Resigning Employees Miss
- File your EIS (Employment Insurance System) SIP claim within 60 days. Most Malaysians leave EIS money on the table because they don't know it exists or wait too long. If you are retrenched, or if your employer terminates your contract without cause, you are entitled to SIP (Skim Insurans Pekerjaan) payouts — up to 80% of your last salary for the first month, tapering over 6 months. The claim window is 60 days from your last day. Don't miss it.
- Get your resignation in writing — even if your boss seems friendly. Verbal resignations create ambiguity around your notice period start date and final day. Send a brief resignation email immediately after any verbal conversation. The email sets the official clock on your notice period (tempoh notis) and protects you if the relationship sours during your notice period.
- Know whether your employer can make you work your full notice period or pay in lieu. The Employment Act 1955 gives BOTH parties the right to pay in lieu of notice (ganti rugi notis) — meaning your employer can ask you to leave immediately and pay your notice period salary, or you can leave early by compensating the employer. Some companies have their own policies on this. Your contract governs what applies in your specific case.
- Track your leave balance carefully before resigning. Malaysian law requires employers to pay out unused earned annual leave (cuti tahunan terkumpul) upon resignation — this is not discretionary. Calculate your entitlement based on your last payslip and the leave taken in the current year. Discrepancies are common and worth checking. If you have pending medical claims or expense reimbursements, submit them before your last day.
- Update your EPF (KWSP) beneficiary nomination before leaving. Many people only check their EPF when they resign and realise their beneficiary nomination is years out of date (listing an ex-partner or deceased parent). Update it via the MyKWSP app — it takes under 5 minutes and can save enormous complications if something happens to you.
- Request your reference letter early — don't wait until your last week. HR departments are busy, and reference letters take time to draft and get signed. Request it in your first week of notice, not your last day. Also: ask your manager and key colleagues for LinkedIn recommendations now, while the working relationship is fresh. These become harder to get after you've moved on.
Frequently Asked Questions
What is the minimum notice period required by Malaysian law?
Under the Employment Act 1955 (Akta Pekerjaan 1955), the statutory minimum notice period depends on length of service: less than 2 years — 4 weeks notice; 2–5 years — 6 weeks notice; more than 5 years — 8 weeks notice. However, your employment contract may specify a longer notice period (e.g. 1 month or 3 months), which overrides the statutory minimum if higher. If your contract specifies a shorter notice period than the statutory minimum, the statutory minimum applies. Check your Letter of Appointment (Surat Tawaran) for the exact terms.
Is my employer required to pay out my unused annual leave?
Yes — accrued but unused annual leave (cuti tahunan terkumpul) must be paid out upon resignation under the Employment Act 1955. The payout is calculated at your daily rate of pay multiplied by the number of unused leave days. This applies to employees covered by the Employment Act. An employer cannot refuse to pay this out or force you to use leave during your notice period unless you mutually agree. If your employer withholds this, you can file a complaint with the Labour Department (Jabatan Tenaga Kerja).
What is Form CP21 and when do I need it?
Form CP21 is a tax clearance form required when a non-citizen (bukan warganegara) is leaving Malaysia for more than 3 months, or when any employee is leaving the country permanently. The employer is required to notify LHDN 30 days before the employee's last day using Form CP21. LHDN then assesses any outstanding tax before issuing a clearance letter (surat penyelesaian cukai). The employer is obligated to withhold the employee's final salary until LHDN issues tax clearance. Malaysian citizens who are NOT leaving the country permanently do not need Form CP21 — they continue filing personal tax returns normally.
Am I eligible for EIS (Employment Insurance System) payouts?
EIS SIP payouts are available if you were retrenched (redundancy), constructively dismissed (forced to resign due to untenable working conditions), or your fixed-term contract ended. If you voluntarily resign without cause, you are generally NOT eligible for SIP payouts — though you remain entitled to career services and job matching from PERKESO. To check your eligibility and file a claim, go to the SIP portal at
sip.perkeso.gov.my. The claim must be filed within 60 days of your last day.
Can my employer deduct money from my final salary?
An employer may lawfully deduct from your final salary: advance salary repayments (if you received a salary advance), outstanding loans from the company (with prior written agreement), and notice period compensation if you leave before completing your notice. Unlawful deductions include: penalties for "bad performance", arbitrary clawbacks of past bonuses not covered in your contract, or deductions that bring your final pay below minimum wage. If you believe a deduction is unlawful, file an eAduan with the Labour Department at
eaduan.jtksm.gov.my.
When must my employer pay my final salary?
Under the Employment Act 1955, the final salary must be paid within 7 days after your last day of work. This includes all outstanding salary, unused annual leave payout, and any other accrued benefits. If your employer fails to pay within 7 days, this is a breach of the Employment Act. You can file a complaint with the Labour Department (Jabatan Tenaga Kerja) or submit an eAduan online. Keep all payslips and written communications as evidence.
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⚠ Disclaimer: This guide is for informational purposes only and does not constitute legal or financial advice. Employment law and benefit rules can change. Always verify with the relevant government body or consult an employment lawyer for your specific situation. Last reviewed: March 2026.