Don’t assume that paying your PCB every month is enough to pass an LHDN PCB Audit.

The PCB audit letter arrived.
Deadline, 14 days.

Boss immediately called HR.
“Our staff PCB all paid properly, right?”

HR checked the payroll.
“Yes, boss. Every month paid on time.”

Everyone relaxed.
Then LHDN asked for the director’s current account ledger.

Inside was a RM60,000 director’s fee.
Credited into the director’s account.
No cash payment.
No PCB deduction.

Suddenly, the audit was no longer an HR problem.
It became the boss’s problem and sumbangan kepada kerajaan.

This is one of the most common mistakes found during an LHDN PCB audit.

Many SME bosses think,
“I haven’t withdrawn the money. Why deduct PCB?”

But LHDN does not only check your bank payment.
They may also check what was credited into your director’s account.
That is why they ask for the ledger.

The second common mistake is bonus paid outside payroll.

December comes.
Company makes profit.
Boss pays himself and a few senior employees a bonus.
Accounts record it.
Bank pays it.

But nobody informs the payroll department.
The result?

Big December remuneration.
Small December PCB.
The numbers already tell LHDN where to look.

The third mistake is the company car.
The company buys the car.
The company pays the instalment, insurance, petrol and maintenance.

Boss uses it every day.
Because no cash is paid to the boss, everyone assumes there is no taxable income.
But a company car or accommodation provided to a director or employee may still be a taxable benefit.
It may need to be valued and reported in Form EA.

Other common mistakes include:

No CP22 for new employees.
No CP22A when employees cease employment.
No CP21 for employees leaving Malaysia.

Employees excluded from the audit schedule because their PCB was zero, even though their monthly gross remuneration reached RM3,100 or more.

A PCB audit is not only checking whether you paid LHDN every month.

LHDN may compare your payroll, accounts, director’s ledger, Form EA, CP8D and company assets.
If all the records tell the same story, the audit may remain administrative.
If they tell different stories, LHDN will start asking more questions.

In many PCB audits, the staff payroll is not the biggest problem.

The boss’s own remuneration is.
Send this to the person handling your payroll.
Better they find the mistake before LHDN does.

Read the full content in our blog
https://www.ktp.com.my/blog/pcb-audit-lhdn/14july2026