Income Tax Calculator Malaysia
Easily estimate your annual personal income tax liability with our accurate and up-to-date calculator. Designed for employees, freelancers, and self-employed individuals, this tool helps you understand your financial obligations based on the latest LHDN tax brackets.
Calculate Your Income Tax
Annual Tax Payable
Est. Monthly Tax (PCB)
Tax Breakdown Summary
| Category | Amount (RM) |
|---|---|
| Annual Gross Income | |
| Total Reliefs | () |
| Chargeable Income | |
| Basic Tax | |
| Rebates (LHDN / Zakat) | () |
| Final Tax Payable |
Understanding Your Tax Assessment Results
The results generated above provide a detailed Malaysia income tax estimate for the current Year of Assessment (YA). Under Malaysia’s Self-Assessment System (SAS), it is the taxpayer's responsibility to accurately compute their chargeable income and tax liability. Understanding the breakdown of these figures is crucial for effective financial planning and ensuring compliance with the Inland Revenue Board of Malaysia (LHDN).
Key Terminology Explained
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Taxable (Chargeable) Income:
Many taxpayers confuse their gross annual salary with their taxable income. Your Chargeable Income is your total gross income minus all eligible tax reliefs (such as EPF contributions, life insurance premiums, lifestyle relief, and medical expenses). LHDN calculates your tax based on this reduced figure, not your total earnings. Maximizing your reliefs is the primary strategy for legally lowering your tax bracket.
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Estimated Tax Payable:
This is the net amount you owe to the government after applying Malaysia's progressive tax rates to your Chargeable Income. Note that this figure is calculated after deducting any tax rebates (such as Zakat, Fitrah, or the RM400 individual rebate for chargeable income below RM35,000). If you are an employee, this amount is typically collected via monthly tax deductions (PCB), but the final figure is reconciled when you file your return.
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Effective Tax Rate vs. Marginal Tax Rate:
Your result displays your Effective Tax Rate, which is the actual percentage of your total income that goes toward tax. This is often significantly lower than your "Marginal Tax Rate" (the rate applied to your highest bracket of income). Because Malaysia uses a tiered structure—where the first portion of your income is taxed at 0%, the next at 1%, and so on—your average tax burden is diluted.
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Tax Reliefs vs. Tax Rebates:
It is vital to distinguish between these two tools. Reliefs reduce your taxable income (e.g., RM9,000 individual relief), effectively moving you to a lower tax bracket. Rebates (like Zakat) are deducted directly from the tax bill itself, dollar-for-dollar. This calculator accounts for both to provide a precise final estimate.
Note: This tool provides an estimate for planning purposes. Final tax assessments should be filed via MyTax (e-Filing) using Form BE (for employees, deadline typically April 30th) or Form B (for individuals with business income, deadline typically June 30th).
How Malaysian Income Tax Works
The Malaysian personal income tax system operates on a progressive tax rate structure. Administered by the Inland Revenue Board of Malaysia (LHDN), this means that high-income earners pay a higher percentage of tax than low-income earners. The system is designed to be equitable, ensuring that individuals contribute to the nation's development based on their financial capacity.
Annual Income vs. Chargeable Income
A common misconception is that tax is calculated on your gross salary. In reality, Malaysia taxes your Chargeable Income. This is your total annual income minus specific exemptions and eligible tax reliefs. By maximizing these reliefs—such as EPF contributions, medical insurance, and lifestyle expenses—you effectively lower your chargeable income, which may drop you into a lower tax bracket.
The Role of PCB (Monthly Tax Deduction)
For most employees, tax is collected in advance through a mechanism known as Potongan Cukai Berjadual (PCB). This is a monthly deduction from your salary that acts as an installment toward your final tax bill. However, the PCB is an estimate. The final tax liability is only determined when you file your return. If your PCB deductions were too high, you will receive a refund; if they were too low, you must pay the difference. You can verify the accuracy of your deductions using our Monthly Tax Deduction (PCB) Calculator.
Reducing Tax: Reliefs, Rebates, and Zakat
Taxpayers have several tools to manage their tax liability legally:
- Tax Reliefs: These are deductions from your total income. Common examples include the standard individual relief, child relief, and education fees. You can estimate your total deductions with the Tax Relief Calculator.
- Tax Rebates: Unlike reliefs, rebates are deducted directly from the calculated tax amount. LHDN provides a standard rebate for individuals with chargeable income below RM35,000.
- Zakat: For Muslim taxpayers, Zakat payments (such as Zakat Fitrah and Zakat Pendapatan) are treated as a tax rebate. This is a significant benefit, as it reduces your tax payable on a dollar-for-dollar basis. It is essential to keep official receipts of these payments for auditing purposes. You can plan your contributions using the Zakat Calculator.
Filing Your Taxes
Regardless of whether your PCB covers your tax liability, filing your annual return (Form BE for employees or Form B for business owners) is mandatory for those meeting the income threshold. This annual filing reconciles your actual income against the tax paid, allowing you to claim refunds for any overpayment or settle any outstanding dues to LHDN.
Accuracy, Assumptions & Limitations
Sources & Methodology
The logic powering this Malaysian Income Tax Calculator is grounded in the official personal income tax framework established by the government. Our algorithm simulates the calculation process used during tax assessment to provide you with a reliable estimate.
How We Calculate Your Estimate
- Framework: We utilize the progressive tax rate structure where higher income brackets attract higher tax rates, consistent with Malaysia's current tax laws.
- Data Source: All tax brackets, relief categories, and rebate thresholds are based on publicly available guidelines and tax schedules published by the Inland Revenue Board of Malaysia (LHDN).
- Calculation Logic: The tool first determines your Chargeable Income by subtracting your input for tax reliefs from your gross annual income. It then applies the specific tax rate for your income band and deducts any eligible rebates (such as Zakat) to arrive at the final tax payable.
Independent Operation: Please note that this website is an independent financial tool and is not affiliated with, endorsed by, or connected to the LHDN or the Government of Malaysia. While we strive to keep our data current with the latest Budget announcements, users should always verify their final tax position with official sources.
Frequently Asked Questions
How does the Malaysian income tax system work?
Malaysia employs a progressive income tax system, meaning that as your income increases, the rate at which you are taxed also increases. The system is administered by the Inland Revenue Board of Malaysia (LHDN), and tax is calculated on your chargeable income rather than your total gross salary.
How do I use this income tax calculator?
Using this tool is straightforward. Simply enter your total annual income, the total amount of tax reliefs you are eligible for, and any Zakat or rebates you have paid. Click the "Calculate" button to instantly see your estimated tax payable and effective tax rate.
What is PCB (Monthly Tax Deduction)?
PCB stands for Potongan Cukai Berjadual. It is a mandatory monthly deduction from an employee's salary that goes toward their annual income tax liability. It serves as an installment plan to avoid a large lump-sum payment at the end of the year.
How do tax reliefs affect my final tax bill?
Tax reliefs act as deductions from your total annual income. By claiming eligible reliefs—such as for medical expenses, education fees, or lifestyle purchases—you reduce your "Chargeable Income," which can potentially lower your tax bracket and reduce the amount of tax you owe.
What is the difference between tax reliefs and tax rebates?
Reliefs reduce your taxable income before tax is calculated. Rebates, on the other hand, are deducted directly from the calculated tax amount itself. Zakat payments and the special government rebate for lower-income groups are examples of rebates.
How does Zakat affect my income tax?
For Muslim taxpayers, Zakat payments (such as Zakat Fitrah and Zakat Pendapatan) are treated as a tax rebate. This means the amount you pay in Zakat is deducted dollar-for-dollar from your final tax payable, subject to the total tax amount.
What does "Taxable Income" or "Chargeable Income" mean?
Taxable or Chargeable Income is the figure used by LHDN to calculate your tax. It is derived by taking your gross annual income and subtracting all eligible tax exemptions and reliefs. It is typically lower than your actual gross salary.
How accurate is this tax calculator?
This calculator uses the specific formulas and tax brackets provided by LHDN for the relevant assessment year. However, it provides an estimate based on the data you input. Complex tax situations involving business income or foreign sources may require a more detailed assessment.
Does this calculator replace the official LHDN assessment?
No, this tool is for estimation and financial planning purposes only. It does not replace the official assessment provided by LHDN. You must still file your annual tax return (Form BE or Form B) via the MyTax portal to determine your final liability.
Which Assessment Year does this calculator apply to?
This calculator is updated to reflect the tax structure for the current Year of Assessment (YA) as announced in the Malaysian Budget. Please check the calculator settings or page details to confirm the specific year being applied.
Who is this tool designed for?
This tool is suitable for employees, freelancers, and self-employed individuals in Malaysia who wish to estimate their personal income tax. It is particularly useful for those planning their finances or checking if their monthly PCB deductions are sufficient.
Are there income types not included in this calculation?
Yes. This basic calculator primarily focuses on employment and self-employment income. It may not account for specialized income sources, capital gains (where applicable), or specific industry incentives that require complex separate calculations.
What happens if I overpaid my tax via PCB?
If your total PCB deductions for the year exceed your actual final tax liability (after accounting for reliefs), you are eligible for a tax refund. This refund is processed by LHDN after you have successfully submitted your annual tax return.
Why is my estimated tax different from my final assessment?
Discrepancies often occur due to unclaimed tax reliefs, inaccurate income reporting, or changes in tax laws mid-year. Ensure you have official receipts for all reliefs claimed to match your final assessment with your estimate.
Where can I verify official tax information?
For the most accurate and legally binding information, always refer to the official website of the Lembaga Hasil Dalam Negeri Malaysia (LHDN) or consult with a licensed tax professional.
About This Tool
Income Tax Calculator Malaysia is a dedicated digital resource built to simplify tax planning for individuals across the country. We understand that navigating Malaysia’s tax framework can be complex, which is why we developed this free tool to help employees, freelancers, and self-employed professionals accurately estimate their personal income tax liability.
Our mission is to provide transparent and accessible financial tools that empower you to make informed decisions about your finances. We adhere to a strict editorial policy to ensure our content is neutral, factual, and helpful. While we use official LHDN data for our calculations, you can view our sources and references to understand the methodology behind the numbers.
To learn more about our team and our commitment to financial literacy in Malaysia, please visit our about us page.