Creating a CP38 Deduction 

Use

In certain circumstances, the Inland Revenue Board (IRB) can require employers to recover tax owed by employees through deductions from monthly wages by issuing the Form CP38 to employers. Employers must then deduct CP38 and STD amounts from employees' remuneration.

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

Prerequisites

The additional tax types for Malaysia must be entered before proceeding with the following procedure.

 You can configure the additional tax types using the Implementation Guide of the Payroll Malaysia component. Choose

Tax ® CP38 ® Define different tax information for CP38.

Procedure

  1. From the Area Menu, choose Human Resources ® Personnel Management ® Administration ® HR Master Data ® Maintain.
  2. Enter the Personnel no. of the employee that a CP38 record is to be created for.
  3. Enter the infotype Schedular Deduction Tax (0198).
  4. Enter the subtype CP-38 Tax Deduction (02).
  5. Choose Create.
  6. Enter the effective date period for CP38 deductions.
  7. In the Employee Information group box:
    1. Enter the Income tax number issued by the Inland Revenue Board (IRB).
    2. Enter the Income tax office to which the employee's tax will be remitted.
  8. If the employer is contributing tax on behalf of the employee, select Tax paid by empr.
  9. Save.
  10. Result

    A CP38 record has been created. To fulfill the conditions for a CP38 deduction, you must perform the subsequent procedure,

    Create an Additional Tax Deduction.