Yes. Referral commission is income, and in Malaysia income goes on your tax return even when it is small and comes from a side activity. For most people sharing a homestay link the tax is tiny or zero, the 2% withholding rule will almost never apply, and the record you need is the payout history on your Refer & earn page.
This article is for people who earn our 5% referral commission and want to know where they stand. It is not tax advice. We are a homestay company, not a tax firm, so we will show you the rules we found, the arithmetic, and what our own system does and does not give you, and then point you to someone who can sign off on your return.
If you are new to the programme, read how much a referral can earn and how to cash out first. This one starts after the money reaches your bank.
Do I have to declare referral commission to LHDN?
You should assume yes. Malaysian tax is charged on income, and there is no general exemption for "side income" or for money earned from sharing links. Guides written for influencers and online sellers in Malaysia say the same thing: every source of income, including commissions and rewards, is declared, and records are kept for seven years.
What is less clear-cut is which kind of income it is. If you share a link now and then, it may be treated as other income; if you run it like a small business, with a page, a following and regular posts, it may be business income, which also lets you claim expenses that were wholly and exclusively spent to earn it. That choice is one for your tax adviser, not for us.
How much tax will I actually pay on it?
Usually very little, because the commission is small and Malaysian personal tax starts low. For resident individuals the schedule for YA 2025 and YA 2026 begins like this:
| Chargeable income band | Rate |
|---|---|
| First RM5,000 | 0% |
| RM5,001 to RM20,000 | 1% |
| RM20,001 to RM35,000 | 3% |
| Higher bands | Rising in steps, up to 30% at the very top |
The commission is added on top of everything else you earn, so what matters is the band your total income already reaches. Here is an example. The figures are made up to show the arithmetic; they are not anyone's real earnings.
| Example | Room rate your friends booked in a year | Your 5% | If your top band is 0% | If 1% | If 3% |
|---|---|---|---|---|---|
| A few weekends | RM6,000 | RM300 | RM0 | RM3 | RM9 |
| A busy year | RM12,000 | RM600 | RM0 | RM6 | RM18 |
| A travel group organiser | RM40,000 | RM2,000 | RM0 | RM20 | RM60 |
If your income is in a higher band the number grows with it, but the method is the same: commission times your top rate. People who live outside Malaysia are a different case. Non-resident individuals are taxed at a flat rate in Malaysia, and your home country may tax it too, so ask an adviser where you live.
What is the 2% withholding tax on agent commission, and does it apply to me?
Since 1 January 2022, Section 107D of the Income Tax Act 1967 requires a company to withhold 2% of the gross payment it makes to an agent, dealer or distributor, but only when that person is a Malaysian tax resident individual who received more than RM100,000 from the same company in the previous year of assessment. The test is run every year, and the 2% counts toward the agent's own tax.
Now put our numbers next to that line. Our commission is 5% of the room rate. To receive more than RM100,000 in commission in one year, the stays you referred would need to add up to more than RM2,000,000 of room rate in that year. For a person sharing a link with friends and family, that is not going to happen. In practice the 2% rule is about full-time sales agents, not about you.
What is a CP58 form, and will I get one?
Form CP58 is a statement a company gives to its agents, dealers or distributors showing the monetary and non-monetary incentives it paid them in a calendar year. It comes from Section 83A of the same Act. LHDN's own answer from 2012 says it is required when the total for the year is more than RM5,000, and it is handed to the agent by 31 March of the following year. It is not something you file yourself; you use it to fill in your return.
Again, in our numbers: RM5,000 of commission means about RM100,000 of room rate referred in one calendar year. Very few referrers get there.
Two honest points from our side:
- We have not settled whether a guest sharing a link counts as an "agent" under these rules. It is a reasonable reading but not a certain one, so treat it as an open question rather than a yes or no from us.
- Our Refer & earn page does not produce a tax form. It shows your payout history (below). If your total from us in a calendar year passes RM5,000, write to us and ask for a statement for that year.
What records does our system give me?
Your Refer & earn page in the guest portal keeps a payout history. For each withdrawal it shows:
| What you see | Why it helps at tax time |
|---|---|
| The amount of the payout | The figure you add up for the year |
| How many bookings were inside it | Lets you match the payout to the stays you referred |
| The status (requested, approved, paid or rejected, with the reason if rejected) | Only paid counts as money you received |
| The date you requested it and the date it was paid | Lets you put each payout in the right year |
| Your total paid out so far | A quick check against your bank statement |
The other half of the record is your own bank statement, because the payout arrives by bank transfer. Keep both together.
Do you deduct any tax before paying me?
No. When you withdraw, the full approved amount goes to your bank account; nothing is held back for tax. That is consistent with the rules above, because the 2% withholding only starts once someone passed the RM100,000 line in the previous year. It also means the tax, if any, is yours to declare. Nobody else is paying it for you.
For the same reason we only ask for three things before a withdrawal: your bank, your account number and the account holder's name. We do not ask for your IC number or income tax number at the moment.
Is there anything I can claim against it?
If your adviser treats it as business income, you can claim costs that were wholly and exclusively spent to earn the commission. For most referrers that list is short, because sharing a link on WhatsApp costs nothing. A person who runs paid posts or prints flyers to promote stays may have something to claim; keep the receipts. Do not claim your own holiday. Staying in a unit yourself is not a cost of earning a commission, and you cannot earn commission on your own booking anyway.
So what should I actually do?
- At the end of each year, add up the paid payouts on your Refer & earn page whose paid date falls in that year.
- Check the total against your bank statement.
- Declare it on your return, in the section your adviser tells you to use.
- If the total passed RM5,000, ask us for a statement for that year.
- Keep the page screenshot and bank statement for seven years.
That is about ten minutes a year for most people.
A note on what this article is not
This is general information from public guidance we found in October 2026 (LHDN's 2012 answer on CP58, a 2022 professional firm summary of Section 107D, and current published tax rate tables), plus how our own payout system works. Tax rules change with each budget, and your situation may differ. Check with a licensed tax agent or LHDN before you file.
If you have not started earning yet, the programme itself is simple: 5% of the room rate on every direct stay you refer, RM20 off your friend's first direct booking of RM150 or more, and withdrawals from RM50. Get your referral link on the Affiliate Program page.