PCB/MTD vs CP38: Payroll Handling

Different starting points

PCB/MTD is the routine monthly income-tax deduction from remuneration. CP38 deductions follow specific instructions issued by HASiL. A CP38 instruction is not a reason to stop calculating the employee’s normal MTD. Confirm the instruction’s details with HASiL where anything is unclear.

A practical handling checklist

• Verify the employee and retain the authority’s instruction through an approved channel.
• Record the specified amount and applicable deduction periods.
• Keep normal MTD and CP38 separately identifiable in the payroll records.
• Check the current submission and payment requirements.
• Reconcile the deductions and retain the relevant evidence.
• Escalate employee cessation, insufficient pay or an ambiguous instruction rather than improvising a deduction.

Avoid changes without authority

A conversation with an employee does not replace an official instruction. If a deduction arrangement changes, obtain and verify the relevant evidence before altering payroll. Keep a record of what changed and who authorised the update.

Official references

Check the current authority guidance when applying rules to an employee or payroll period. Sources reviewed on 22 September 2026.

• HASiL: employer responsibilities
• HASiL: explanation of MTD and CP38