Huh? Why report to LHDN if your employer didn’t pay commission? You meant they didn’t pay your tax, isit?
If it’s a commission issue, that’s under JTK, not LHDN. Let me explain.
Under the Employment Act 1955, which is under the purview of JTK, wages include basic salary and any other remuneration paid for work done – this covers commissions or incentive payments. If your commission or incentive is clearly stated in the employment contract, failure to pay is a straightforward breach of contract.
However, the problem is, many employers promise commissions or incentives without spelling it out formally in an agreement. For example, through verbal promises. So how like that?
Well, oral agreements are valid and enforceable in Malaysia, as long as you can prove that terms and that both parties intended to form a contract. According to Section 10(1) of the Contracts Act 1950, “All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration, and with a lawful object, and are not hereby expressly declared to be void.”
Translation: If your boss said, “If you hit your sales target, I’ll pay you RM5,000,” that can form a binding contract. Especially if you actually did the work and hit the target.
Similarly, an implied term can arise from consistent past practice. For example, if the company always paid commission monthly or quarterly, you can argue it’s an implied obligation – even if it’s not written. down. Malaysian courts do recognise implied terms through custom and practice.
Refer to Section 69(1) of the Employment Act, “The Director General may inquire into and decide any dispute between the employee and his employer in respect of wages or any other payments in cash due…”
So, if your company is not paying your commission or incentive as promised, here’s what I recommend:
1. Gather Evidence. Collect all documents and records related to commission or incentive. This includes company policy documents, emails, past payslip, etc.
2. Internal Discussion. Raise the issue internally with HR or your boss first. It could be a genuine oversight or mistake that can be corrected without formal action. Politely document your request and any admission that can help your case later.
3. Lodge a Formal Complaint. If internal efforts fail, your next stop is JTK. For a guide, read this post: https://www.linkedin.com/posts/simlingku_guide-to-lodging-a-complaint-atjtk-some-activity-7338037250816954368-uy24?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAL-iyEBWRSrM8Z92314viMVDnU4r1oE6Fo
In that order.
Gitu.
xoxoxo, AuntyHR
