Create a CP38 Deduction 

Use

Under certain circumstances, the IRB may require employers to recover tax owed by employees through deductions from monthly wages by issuing the Form CP38 to employers. Employers, in turn, should then deduct CP38 and STD amounts from employees' remuneration accordingly.

The purpose of this procedure is to then create the relevant CP38 deduction records for the affected employees so that payroll can utilize the information to effect the deductions for the month.

Prerequisites

The additional tax types for Malaysia must be maintained prior to proceeding with the following procedure

 You can configure the additional tax types in the Implementation Guide of the Payroll Malaysia component. Choose Tax ® CP38 ® Define different tax information for CP38.

Procedure

  1. Choose Human resources ® Personnel management ® Administration ® Maintain master data.
  2. Enter the Personnel no. of the employee a CP38 record is to be created for.
  3. Enter the Infotype Schedular Deduction Tax (0198).
  4. Enter the Subtype CP-38 Tax Deduction (01).
  5. Choose Create.
  6. Enter the effective date period for CP38 deductions.
  7. Under the Employee Information section:
  1. Maintain the Income tax number issued by the Inland Revenue Board (IRB).
  2. Maintain the Income tax office where the employee's tax will be remitted to.
  1. If the employer is contributing tax on behalf of the employee, check the box Tax paid by empr.
  1. Save your entries.

Result

At this point, a CP38 record has been created. In order to fulfill the conditions for a CP38 deduction, you will have to run through the follow-on procedure, Create an Additional Tax Deduction.