💥 Foreign Workers & E-Invoicing: Don’t Play Play Ah, IRBM IS Watching! 💥

Published: 28 May 2025

 Let’s be real — if you run a business in Malaysia, especially in construction, manufacturing, plantations or cleaning services, there’s a high chance you rely on foreign workers to keep operations running.

But with the 2025 rollout of e-Invoicing, many employers are suddenly asking…

If you’re unsure about all this confusion between foreign workers and e-Invoicing – you’re not alone. And this article is for you.

We’ll go through this step by step.

First, let’s look at the types of FOREIGN WORKERS IN MALAYSIA:

🚧 Category 1: "They work for me. Full-time. Got permit."

Translation: They’re your employees.

✅ No e-invoice needed.

Just process their salaries via payroll. Done and dusted. IRBM happy.

💡 Reminder: They must be legal employees with valid permits under your company name. No funny business.

👷 Category 2: "Freelancers-lah. I call them when I need."

Translation: Generally, they are categorized as ‘Contract for Service’. They provide specific services to the company in exchange for payment.

💥 Yes, e-Invoice needed — but they must issue it to you.
If their income is below RM150,000 a year, they’re exempt — so they can issue a normal receipt.

🔍 Your job? Keep their passport copy, job description, and proof of payment. You’ll need it if IRBM comes knocking.

🧑‍🔧 Category 3: "We get our workers from an agent."

Translation: Third-party supplier.

📄 The agency issues you an e-invoice — not the workers, not you.

💡 You pay the agency. The agency handles the workers. You just keep the records.

🧹 Category 4: "These guys just show up. I pay daily."

Translation: Casual workers, ad hoc hires, pick-up by contractors for short-term jobs.

This one gets tricky.

Even if they’re not “employees” on paper, if you control their schedule, tools, and payment, IRBM sees it as a ‘Contract of Service’.

What do you need to do if foreign workers cannot issue e-Invoices?

You know, in some situations, casual workers are hired by companies to help with certain short-term jobs. They do not control how work is done and will just follow the company’s instructions – scheduled hours, etc.

These workers are considered as ‘Contract of Service’ (like an employment relationship) as compared to ‘Contract for Service’ (outsourcing) and is therefore not considered as service providers and cannot issue e-Invoices on their own.

In this case, to record these payments accordingly, the company will have to issue self-billed invoices in accordance with IRBM’s e-Invoice Guidelines.

When issuing self-billed e-invoices, just use these IRBM-approved codes:

• TIN: Use “EI00000000030”
• Passport No.: Use the most recent one you have, or write “NA”
• Classification: “036 Self-Billed - Other”
• Description: Be specific, e.g., “one-day painting work”, “site clean-up labour”

📌 Know Your Worker. Know Your Risk.

Before jumping into e-invoicing, make sure you:

✅ Identify the type of working relationship

✅ Record everything — even that one-off weekend cleanup guy

✅ Follow IRBM's e-Invoice guidelines to avoid audit headaches

🚨 Bonus Tip: Avoid This Common Mistake!

If you’re hiring illegal workers (no permits, no documents), STOP NOW. Not only are you breaking immigration laws, but there’s also zero way to justify it under e-invoicing.

You could face:

❌ Tax penalties
❌ Immigration raids
❌ Business license risks

It’s just not worth it.

📣 Final Word from the Tax Pros

e-Invoicing isn’t just about systems — it’s about knowing who you’re hiring and how you’re paying them. We’ve seen companies fined just because they “didn’t know” how to classify their foreign workers.

Let us help you get your records straight, stay compliant, and avoid costly mistakes.

📞 Call us before IRBM calls you.