If you’re wondering how Malaysia’s PCB (Potongan Cukai Bulanan) works or how your employer figures out the deduction on your payslip, you’re in the right place.
PCB, also known as the Monthly Tax Deduction (MTD), is Malaysia’s system for collecting income tax bit by bit each month — instead of you paying it all at once at the end of the year.
Let’s break down how to figure out your PCB deduction, what affects it, and how you can estimate the amount yourself. If you’re preparing a financial plan, the Malaysia Income Tax Calculator provides clear insight into your taxable income.
What Is PCB in Malaysia?
PCB stands for Potongan Cukai Bulanan — a monthly income tax deduction withheld by your employer and paid to LHDN (Lembaga Hasil Dalam Negeri) on your behalf.
It ensures you gradually prepay your annual income tax throughout the year.
Here’s how it works in simple terms:
- Your employer calculates your estimated annual chargeable income.
- They apply the official Malaysia income tax rate.
- The result is divided into 12 months — that’s your monthly PCB deduction.
If you pay more than your actual tax due, you’ll get a refund after filing your return.
You can compare your estimated rate using the Malaysia Income Tax Rate Calculator.
Factors That Influence Your PCB Deduction
Your PCB deduction isn’t the same as your colleague’s — even if your base salary is identical.
That’s because it depends on several personal and financial factors.
| Factor | Description | Impact |
|---|---|---|
| Monthly salary | Your total basic pay + taxable allowances | Higher salary = higher deduction |
| EPF contribution | 9% of your salary goes to EPF (retirement fund) | Reduces taxable income |
| Marital status & dependents | Married employees and parents get extra reliefs | Lowers PCB |
| Bonuses or commissions | One-off payments increase taxable income temporarily | Increases PCB that month |
| Tax reliefs | Education, insurance, and lifestyle reliefs | Can reduce PCB significantly |
If you receive an annual bonus, you can also check its effect on your tax using the Malaysia Bonus Tax Calculator.
Step-by-Step: How to Figure Out Your PCB Deduction
You don’t need to be a payroll expert to understand your deductions.
Here’s a simple step-by-step method you can use.
Step 1: Find Your Gross Salary
Start with your gross monthly income — this includes your base salary and any allowances.
Step 2: Subtract Statutory Contributions
Deduct your EPF (9%), SOCSO, and EIS.
What’s left is your taxable monthly income.
Example:
RM 5,000 salary
– RM 450 (EPF 9%)
= RM 4,550 taxable income
Step 3: Estimate Your Annual Chargeable Income
Multiply your monthly taxable income by 12 (plus any bonuses).
Then subtract tax reliefs and personal deductions you qualify for.
Step 4: Apply the Tax Rate
Use the official Malaysia income tax brackets to calculate your annual tax, then divide by 12 months to estimate PCB.
If you’re unsure, plug your salary and reliefs into the Malaysia Monthly Tax Deduction Calculator to see an accurate monthly breakdown.
Step 5: Compare Against Your Payslip
Your payslip should show “PCB” or “MTD” — if it differs a lot from your estimate, check if your reliefs or marital status were updated with HR.
You can update them anytime using Form TP1.
Example of a PCB Deduction Breakdown
| Item | Amount (RM) | Note |
|---|---|---|
| Gross Monthly Salary | 5,000 | Basic pay + allowances |
| EPF (9%) | – 450 | Mandatory deduction |
| SOCSO (0.5%) | – 25 | Social security |
| EIS (0.2%) | – 10 | Insurance contribution |
| Estimated PCB (13%) | – 200 | Income-tax portion |
| Net Take-Home Pay | 4,315 | Approximate total |
You can use tools like the Malaysia Salary Tax Calculator to check your full deduction scenario.
Why Your PCB Deduction Might Change
PCB is recalculated whenever there’s a change in your pay or personal details. Common reasons include:
- Receiving a bonus or commission
- A salary increment or new allowance
- Declaring new dependents or spouse
- Stopping certain deductions (like insurance or zakat)
If you’re Muslim and contribute zakat through payroll, that amount can offset your PCB. To check how much zakat affects your tax, use the Malaysia Zakat Calculator.
Common Mistakes When Estimating PCB
- Ignoring reliefs – Forgetting to claim lifestyle or insurance deductions can make your PCB look too high.
- Not updating Form TP1 – Outdated dependent info means incorrect monthly tax.
- Assuming bonuses are tax-free – They’re included in taxable income.
- Skipping annual review – Check your payslip each year when LHDN updates its tax brackets.
For a quick annual comparison, visit the Malaysia Property Tax Calculator — it helps understand how various income sources affect your taxes overall.
Frequently Asked Questions
What is PCB on my payslip?
It’s your monthly income tax deduction made automatically by your employer and submitted to LHDN.
Can I calculate PCB manually?
Yes, by estimating your annual taxable income, applying Malaysia’s income tax rates, and dividing by 12. Using a calculator is faster and more accurate.
Why is my PCB different from a coworker’s?
Your PCB depends on your reliefs, dependents, and extra income like bonuses — even small differences can change the deduction.
Can PCB be adjusted mid-year?
Yes. Submit Form TP1 to your employer to update dependents or reliefs so your monthly deduction matches your real situation.
Do I still need to file annual taxes?
Yes. PCB is only a prepayment. During e-Filing, LHDN will confirm if you owe more or get a refund.
- You can check the levy on your wages to see if your employer is deducting the right amount.
- Knowing your PCB amount helps you determine net earnings accurately every month.
- Besides PCB, there are other standard removals that will appear on your monthly pay slip.
- Using a reliable computation tool is the easiest way to verify your monthly deductions.
- Excess PCB payments can often be claimed back as a reimbursement from LHDN at the end of the year.
- Expect a significant jump in deductions when receiving additional yearly payouts from your company.
- Employees working in the south should ensure their PCB aligns with national rates.
Willium is the creator of IncomeTaxCalculatorMalaysia.com, a trusted resource for accurate and easy-to-use tax calculation tools. With a deep understanding of Malaysia’s tax system, he helps individuals and businesses estimate their income tax with confidence. Willium is dedicated to simplifying financial decisions by offering clear, reliable tools and expert guidance, empowering users to stay informed and save time.