Jun 5

CP500 Notices – What Employers and HR Managers Need to Know

Effective Date: Year of Assessment (YA) 2026

Recently, many HR departments have received enquiries from employees who were surprised to receive a CP500 (Notis Bayaran Ansuran) from the Inland Revenue Board of Malaysia (LHDN). Some employees assumed it was a mistake because they are already paying tax through Monthly Tax Deductions (PCB), while others were concerned about outstanding tax liabilities.

Why Are Employees Receiving CP500?

What Should Employees Do?

Employees should first determine whether the CP500 is valid. If the employee genuinely receives non-employment income, the CP500 may be correct and should be reviewed carefully. If the employee only receives employment income and believes the notice was issued incorrectly, the following steps are recommended.

Important Update for YA 2026: LHDN has introduced a one-year penalty waiver for eligible individualtaxpayers affected by the CP500 implementation for Year of Assessment 2026. Eligible taxpayers will not be subjected to penalties for missed CP500 instalments during the concession period. However, the notice should still be reviewed and corrected where necessary, as LHDN may otherwise continue assuming theindividual has non-employment income in future years.



Recommendations for Employers

To minimise confusion and repeated enquiries, employers and HR managers may wish to take a proactive approach. While CP500 remains an individual taxpayer matter, clear communication can significantly reduce employee anxiety and unnecessary escalations to HR.
Key Takeaway: While CP500 remains an individual taxpayer matter, proactive communication from HR can help reduce employee anxiety and unnecessary escalations. Equip your team with the right information — and direct them to LHDN for the rest.

Source: LHDN Malaysia
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