Letter of Extension of Contract Malaysia: Free Template, Format & Sample

A letter of extension of contract is a formal document used to extend an employee's fixed-term employment contract beyond its original end date. It confirms the new contract period, any changes to the employment terms, and serves as written evidence that both the employer and employee agree to continue the employment relationship.

If you're extending an employee's contract, this guide explains when to issue a contract extension letter, what it should include, and provides free templates in both English and Bahasa Malaysia.

What Is a Letter of Extension of Contract?

A letter of extension of contract is issued by an employer to formally confirm that an employee's fixed-term employment contract will continue beyond its original expiry date.

Unlike a new employment contract, an extension letter usually keeps the existing employment terms while updating the contract duration. It provides clarity for both parties and helps maintain accurate HR records.

A contract extension letter typically includes:

Employee's full name
Current position
Original contract period
New contract end date
Salary or benefits (if revised)
Terms and conditions
Employer and employee signatures

Is a Contract Extension Letter Required in Malaysia?

The Employment Act 1955 does not specifically require employers to issue a contract extension letter.

However, documenting any contract extension in writing is considered good HR practice and helps avoid disputes over the employee's continued employment.

A written extension letter also provides clear evidence of the agreed contract period and any revised employment terms.

Contract Extension vs Contract Renewal

Although these terms are often used interchangeably, they are not the same.

Contract Extension	Contract Renewal
Extends the existing contract	Starts a new contract
Usually keeps the same employment terms	Employment terms may be revised
Suitable for short-term extensions	Suitable for a new employment period
Requires an extension letter	Usually requires a new employment contract

If there are significant changes to the employee's role, salary, or responsibilities, issuing a new employment contract is generally more appropriate.

When Should Employers Issue a Contract Extension Letter?

Employers commonly issue a contract extension letter when:

A project requires additional time
Business operations still require the employee
A permanent hiring decision has not been made
A seasonal or temporary role needs to continue
An employee is covering another staff member for a longer period

Ideally, the extension letter should be issued 2 to 4 weeks before the current contract expires to give both parties enough time to review and sign the document.

What Employers Should Know Before Extending a Contract in Malaysia

Before extending an employee's contract, employers should:

Issue the extension letter before the contract expires.
Clearly state the new contract end date.
Confirm whether all existing employment terms remain the same or if any changes apply.
Have both the employer and employee sign the letter.
Update payroll and HR records accordingly.
Update EPF, SOCSO, EIS, and PCB calculations if the employee's salary changes.

Keeping everything in writing helps protect both the employer and employee while ensuring payroll and statutory contributions remain accurate.

Can an Employee Refuse a Contract Extension?

Yes. A contract extension requires the agreement of both the employer and employee.

If an employee chooses not to accept the extension, the employment will generally end on the original contract expiry date unless both parties agree otherwise.

Employers should keep written records of the offer and the employee's decision for future reference.

What Should a Letter of Extension of Contract Include?

A contract extension letter should clearly explain the new contract period and any updated employment terms.

It should include:

Company letterhead
Date
Employee's full name
Current job title
Original contract start and end date
New contract end date
Salary (if revised)
Any changes to employment terms
Statement that all other terms remain unchanged (if applicable)
Employee acknowledgement
Employer's signature

Free Letter of Extension of Contract Template

[Company Name]

Date: [DD Month YYYY]

Dear [Employee Name],

Subject: Extension of Employment Contract

We refer to your employment contract dated [Original Contract Date], under which you were employed as [Job Title].

We are pleased to inform you that your employment contract has been extended from [Extension Start Date] until [New Contract End Date].

Except for the changes stated in this letter, all other terms and conditions of your original employment contract remain unchanged and continue to apply.

Changes (if applicable):

[Updated salary]
[Updated benefits]
[Other employment changes]

Please sign and return a copy of this letter to confirm your acceptance of the contract extension.

We appreciate your continued contribution and look forward to working with you.

Yours sincerely,

[Employer Name]

[Job Title]

Employee Acknowledgement

I acknowledge and accept the extension of my employment contract.

Employee Signature: ______________________

Name: ______________________

Date: _____________________

Surat Pelanjutan Kontrak (Template Bahasa Malaysia)

[Nama Syarikat]

Tarikh: [Tarikh]

Tuan/Puan [Nama Pekerja],

Perkara: Pelanjutan Kontrak Perkhidmatan

Merujuk kepada kontrak perkhidmatan anda bertarikh [Tarikh Kontrak Asal].

Sukacita dimaklumkan bahawa kontrak perkhidmatan anda sebagai [Jawatan] dilanjutkan sehingga [Tarikh Tamat Baharu].

Kecuali perubahan yang dinyatakan di dalam surat ini, semua terma dan syarat kontrak asal anda kekal berkuat kuasa.

Perubahan (jika ada):

[Perubahan gaji]
[Perubahan faedah]
[Perubahan lain]

Sila tandatangani dan kembalikan surat ini sebagai tanda persetujuan anda.

Sekian, terima kasih.

Yang benar,

[Nama Majikan]

[Jawatan]

Pengesahan Pekerja

Saya mengakui dan bersetuju dengan pelanjutan kontrak ini.

Tandatangan: ______________________

Nama: ______________________

Tarikh: ______________________

Perubahan (jika ada):

[Perubahan gaji]
[Perubahan faedah]
[Perubahan lain]

Sila tandatangani dan kembalikan surat ini sebagai tanda persetujuan anda.

Sekian, terima kasih.

Yang benar,

[Nama Majikan]

[Jawatan]

Pengesahan Pekerja

Saya mengakui dan bersetuju dengan pelanjutan kontrak ini.

Tandatangan: ______________________

Nama: ______________________

Tarikh: ______________________

What Happens If You Don't Issue a Contract Extension Letter?

Failing to issue a contract extension letter can create unnecessary uncertainty for both employers and employees.

Without written confirmation:

The employee's continued employment may not be properly documented.
Employers and employees may have different expectations about the contract period.
Disputes over salary, benefits, or the extension date can be harder to resolve.
Payroll, EPF, SOCSO, EIS, and PCB records may become inaccurate.
If an employee continues working after the contract expires without a new agreement, it may increase the risk of disputes over the nature of the employment relationship.

Issuing the extension letter before the contract expires helps minimise these risks.

Free Contract Extension Letter Templates

Need a different contract extension letter format?

Our free template pack includes:

Standard Contract Extension Letter
Contract Extension with Salary Revision
Fixed-Term Contract Extension Letter
Project-Based Contract Extension Letter
Temporary Staff Contract Extension Letter
Probation Contract Extension Letter
Bahasa Malaysia Contract Extension Template

Download the templates and customise them to suit your company's requirements.

FAQs

Can an employer extend a fixed-term employment contract?

Yes. As long as both the employer and employee agree, a fixed-term employment contract can be extended.

How many times can a contract be extended in Malaysia?

There is no legal limit. However, extending the same contract many times may increase the risk of the employee being considered permanent.

Do I need a new employment contract?

Not always. If the employment terms remain the same, a contract extension letter is usually enough. If there are major changes, such as salary or job responsibilities, consider issuing a new employment contract.

Can I send a contract extension letter by email?

Yes. However, it's best to keep a signed copy, either electronically or in print, for your HR records.

What if an employee doesn't sign the extension letter?

Keep a record that the extension was offered and follow up with the employee. It's important to document all communication for future reference.

Looking to Hire Contract or Permanent Employees?

Whether you're hiring fixed-term or permanent staff, AJobThing helps employers reach millions of job seekers across Malaysia.

Find qualified candidates faster and build your team with confidence.

Post your job with AJobThing today.