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CP38 Deductions: How to Set Up an LHDN Instalment Instruction in BrioHR

Use the built-in CP38 deduction item, set it up as a recurring or one-time deduction, and how CP38 flows into the PCB TXT file.

Audience & Scope

Audience: HR Admin

Module: Payroll

Country: Malaysia

Pre-requisites: HR Lounge access to Payroll module enabled; a CP38 instruction letter from LHDN for the employee

The CP38 deduction item already exists

When an employee receives a CP38 instruction from LHDN, use the existing CP38 deduction item in BrioHR — you do not need to create a custom item.

Before you start: before keying in a fixed monthly amount from an LHDN letter, check that the letter is a CP38 instruction (instalment of tax arrears / Tax Deduction Order). Only a CP38 goes into Payroll under Deductions; other LHDN instructions are handled differently.

Method 1 — recurring monthly deduction (typical CP38 instalments)

  1. Go to Employee Profile > Compensation > Deductions > + Add Deduction.
  2. Enter the Effective Date (and End Date if the instruction has one), select CP38 as the Deduction Type, enter the Amount, and Save.

Method 2 — one-time deduction during a payroll run

  1. Go to HR Lounge > Payroll > Run Payroll and open the employee's payroll details.
  2. Click + Add under Deductions, select CP38, enter the amount, and save.

CP38 and the PCB payment file

CP38 deductions included in the payroll are automatically reflected in the LHDN PCB TXT file. Remember, statutory files are only available after the payroll month is completed.