tax on my salary in Malaysia?

Navigating your income tax in Malaysia doesn’t have to be complicated. Whether you’re an employee wondering about your take-home pay or a fresh graduate preparing for your first tax filing, this guide will help you understand how salary tax works in Malaysia for the 2025 Year of Assessment.

We’ll show you how to calculate your tax payable using a simple, real-life example and highlight the key tax reliefs you can use to lower your bill.

Understanding the Progressive Tax System

Malaysia uses a progressive tax system, which means your tax rate increases as your income does. The tax is not charged on your full salary, but on your chargeable income.

Chargeable income is what’s left after you deduct mandatory contributions (like EPF and SOCSO) and all your eligible tax reliefs from your total annual income. This is why maximizing your tax reliefs is so important—it directly reduces the amount of income that’s taxed.

Malaysia Income Tax Brackets for Residents (2025 Year of Assessment)

If you’re a tax resident (staying in Malaysia for at least 182 days in a calendar year), these are the rates that apply to you:

Chargeable Income (RM)	Rate (%)	Tax on Excess (RM)
0 – 5,000	0	0
5,001 – 20,000	1	150
20,001 – 35,000	3	450
35,001 – 50,000	6	900
50,001 – 70,000	11	2,200
70,001 – 100,000	19	5,700
100,001 – 400,000	25	75,000
400,001 – 600,000	26	52,000
600,001 – 2,000,000	28	392,000
2,000,001 and above	30	–

How to Calculate Your Tax: A Practical Example

Let’s imagine you’re an employee with a gross annual salary of RM80,000. You want to know your tax liability for the 2025 tax year.

Step 1: Determine Your Chargeable Income

You start with your gross salary and subtract all your contributions and reliefs.

• Gross Annual Salary: RM80,000
• Less: EPF Contributions: RM8,800 (11% of salary)
• Less: Individual Relief: RM9,000 (Standard relief for all taxpayers)
• Less: Life Insurance & EPF Relief: RM7,000 (Combined total limit)
• Less: Lifestyle Relief: RM2,500 (For things like a new phone or a gym membership)
• Chargeable Income: RM80,000 – RM8,800 – RM9,000 – RM7,000 – RM2,500 = RM52,700

Step 2: Apply the Progressive Tax Brackets

Now, apply the tax rates to your chargeable income of RM52,700.

• On the first RM50,000, the tax payable is RM1,500.
• The remaining amount is RM2,700 (RM52,700 – RM50,000). This falls into the next bracket, which is taxed at 11%.
• Tax on the remaining amount: RM2,700 x 11% = RM297.
• Total Tax Payable: RM1,500 + RM297 = RM1,797

Key Tax Reliefs and Deductions to Know

To lower your chargeable income, make sure you claim all the reliefs you’re eligible for. Here are some common ones for salaried workers:

• Individual & Dependent Relatives: RM9,000
• EPF & Life Insurance: Up to RM7,000
• Lifestyle: Up to RM2,500 (Books, computers, smartphones, internet)
• Medical Expenses (for serious diseases): Up to RM10,000
• Medical Expenses for Parents: Up to RM8,000
• Childcare/Kindergarten Fees: Up to RM3,000 (for children aged 6 or below)

What about Foreigners and Non-Residents?

If you are a foreigner who has been in Malaysia for less than 182 days in a calendar year, you are considered a non-resident for tax purposes.

• Non-residents are taxed at a flat rate of 30% on all income earned in Malaysia.
• They are not eligible for personal reliefs.

Frequently Asked Questions (FAQs)

Q1. How can I reduce my taxable income in Malaysia?

You can reduce your taxable income by making sure you claim all eligible tax reliefs and deductions. Keep all your receipts for expenses on things like lifestyle items, medical checkups, and education fees, as these can significantly lower your final tax bill.

Q2. What is the minimum salary to pay tax in Malaysia?

Generally, you are required to register a tax file if your annual income exceeds RM34,000 after EPF deductions. However, due to reliefs, many people with incomes higher than this threshold may still end up with zero tax payable.

Q3. What is the difference between tax reliefs and tax deductions?

Tax reliefs and deductions both lower your chargeable income. While reliefs are personal allowances for specific expenses (like medical costs or a new laptop), deductions are for mandatory contributions to approved schemes, like EPF and SOCSO.

Q4. Can I claim relief for my parents’ medical expenses?

Yes, for the 2025 tax year, you can claim up to RM8,000 for medical treatment, special needs, and carer expenses for your parents. You must be able to prove these expenses with receipts and a certified medical condition.

Q5. When is the deadline for filing my income tax in Malaysia?

The deadline for salaried individuals (filing Form BE) is typically April 30 of the following year. For example, for the 2025 tax year, the deadline is April 30, 2026. An extension to May 15 is usually given for those who file online.