Multi-company payroll in Malaysia: running several Sdn Bhds and transferring staff between them
Running a holding company and two operating Sdn Bhds? Here's how payroll, tax and statutory contributions work when staff belong to — and move between — companies in the same group.
Many Malaysian businesses grow into groups: a holding company, an operating company, a property or services company, perhaps a new Sdn Bhd for each project or outlet. Customers see one business. Payroll and LHDN see separate employers — and that distinction drives almost every rule in this guide.
General guidance, not tax advice
Inter-company transfers raise questions of tax, employment law and contracts. LHDN has no special "group transfer" rule, so confirm unusual cases (secondments, cross-border moves, retirements) with your tax adviser.
One group, many employers
Each Sdn Bhd that employs people needs its own:
- Employer numbers with KWSP (EPF), PERKESO (SOCSO/EIS) and LHDN (employer's E number), plus HRD Corp registration where required
- Monthly submissions and payments for EPF, SOCSO, EIS, PCB and HRDF
- Form EA for each of its employees and its own Form E and CP8D at year-end
- Bank file from its own payroll account, and its own books (in Xero, usually one organisation per company)
The HRDF headcount is also per employer: a group of three companies with six Malaysian employees each isn't one employer with 18.
What changes when an employee moves to another group company
Unless the arrangement is a secondment (the employee stays employed by the original company and is lent to another), moving someone to a sister company means their employment with the first company ends and a new one starts. For payroll, treat it like a leaver at one company and a joiner at the other — with some continuity you can choose to preserve.
| Area | Old company | New company |
|---|---|---|
| Final pay | Pays wages up to the last day, plus anything due on cessation | — |
| EPF / SOCSO / EIS | Contributes for wages it paid | Contributes from the first month it pays, under its own employer numbers; the employee's member numbers don't change |
| PCB | Deducts PCB up to the last month | Calculates PCB using the year-to-date from the old company (via TP3) so the annual tax is right |
| LHDN notices | CP22A at least 30 days before the employee ceases — not required where their income is subject to PCB | CP22 within 30 days of the employee starting |
| Form EA | Issues Form EA for its period of employment | Issues Form EA for its period |
| Leave and service | Settles or transfers leave per your policy | Recognises prior service if the contract says so |
Why TP3 matters
PCB is designed to spread the annual tax evenly across the year. If the new company calculates PCB as if the employee had no earlier income this year, it will usually under-deduct, leaving the employee with a tax bill when they file. The TP3 form carries the year's remuneration, EPF, PCB and zakat from the previous employer into the new employer's PCB calculation.
Service continuity
Length of service affects annual leave, sick leave, notice periods and termination benefits under the Employment Act. When the move is the employer's decision, most groups recognise continuous service in the new contract — say so explicitly in the transfer letter.
Admin access in a group
A group payroll team often looks like this: an owner who sees everything, an HR manager for HQ, a branch admin for each outlet, and a finance person who only needs reports. Good group payroll software lets you:
- See every company from one login, switching in a click
- Give each admin access to specific modules (off / view / manage)
- Limit an admin to specific employees — e.g. only front-desk staff — including running payroll for them
- Keep salary data of HQ and other admins away from branch admins
How altomateHR handles group payroll
- One login, every Sdn Bhd — each with its own statutory numbers, payroll runs, bank file, year-end forms and Xero organisation.
- Transfer an employee to another company now or on a future date. Personal details always move; payroll, bank and this year's year-to-date move when you tick them, so the new company's PCB starts from the right place. Draft payroll in both companies is flagged to re-run, and the carried year-to-date is recalculated when the old company submits.
- Duplicate someone to employ them in two companies at once, with salary and history kept separate.
- Employment history shows joins, leaves and transfers on one timeline.
- Scoped admins: per-module access and access limited to chosen policies, including running payroll for their own people only.
Read more in inter-company transfers and scoped admins.
FAQ
Is moving an employee to a sister company a new employment for tax purposes?+
Generally yes. Unless it is a secondment, the employee ceases employment with one company and starts with another, so each company reports its own period on Form EA and the new company files CP22.
How do I make sure PCB is correct after an inter-company transfer?+
The new company should use the employee's year-to-date remuneration, EPF, PCB and zakat from the old company, normally provided on a TP3 form, in its PCB calculation. altomateHR can carry the year-to-date across when you transfer the employee.
Do I need to submit CP22A when an employee moves to another group company?+
CP22A is not required where the employee's income is subject to PCB. Check LHDN's current guidance for retirements, employees leaving Malaysia and other special cases.
Can one payroll system run payroll for several Sdn Bhds?+
Yes. altomateHR lets one login manage payroll for every company in a group, each with its own statutory numbers, payroll runs, forms and Xero connection.
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