How Malaysian income tax works
Malaysia taxes residents on a progressive scale. Your income is split into bands, and each band is taxed at its own rate — from 0% on the first RM5,000 up to 30% on the highest incomes. Crucially, tax is charged on your chargeable income, which is your total income after reliefs. So two people earning the same salary can pay very different tax depending on how many reliefs they claim. If your chargeable income is RM35,000 or below, an RM400 rebate wipes out most or all of your tax.
YA 2026 income tax rates in full
These are the resident rates for year of assessment 2026, the same schedule the calculator above runs on. Each band taxes only the slice of chargeable income that falls inside it, so reaching the 19% band does not put your whole income at 19%.
| Chargeable income | Rate | Tax on this band |
|---|---|---|
| RM0 to RM5,000 | 0% | RM0 |
| RM5,001 to RM20,000 | 1% | RM150 |
| RM20,001 to RM35,000 | 3% | RM450 |
| RM35,001 to RM50,000 | 6% | RM900 |
| RM50,001 to RM70,000 | 11% | RM2,200 |
| RM70,001 to RM100,000 | 19% | RM5,700 |
| RM100,001 to RM400,000 | 25% | RM75,000 |
| RM400,001 to RM600,000 | 26% | RM52,000 |
| RM600,001 to RM2,000,000 | 28% | RM392,000 |
| RM2,000,001 and above | 30% | No ceiling |
Chargeable income is your income after reliefs, not your salary. Separately, an RM400 rebate cancels the tax when chargeable income is RM35,000 or less. Rates last checked 8 September 2026.
What tax looks like on RM3,000, RM5,000 and RM8,000 a month
Three salaried workers, year of assessment 2026, employment income only. The only reliefs assumed are the ones a salaried filer gets anyway: the RM9,000 individual relief, EPF at the usual 11% employee rate (capped at RM4,000) and the combined SOCSO and EIS line (capped at RM350). Claim anything else and your own figure comes out lower than these.
| Working | RM3,000 a month | RM5,000 a month | RM8,000 a month |
|---|---|---|---|
| Annual gross salary | RM36,000 | RM60,000 | RM96,000 |
| Less: individual relief | RM9,000 | RM9,000 | RM9,000 |
| Less: EPF relief | RM3,960 | RM4,000 | RM4,000 |
| Less: SOCSO and EIS relief | RM252 | RM350 | RM350 |
| Chargeable income | RM22,788 | RM46,650 | RM82,650 |
| Tax before rebate | RM233.64 | RM1,299.00 | RM6,103.50 |
| Less: individual rebate | RM400.00 | None | None |
| Tax payable | RM0.00 | RM1,299.00 | RM6,103.50 |
The RM3,000 earner lands under the RM35,000 rebate threshold, so the RM400 rebate wipes out the whole bill and nothing is payable. Every figure above is produced by the same tax engine as the calculator, not typed in by hand, so type RM3,000 into the box above and you will get the same answer.
How this compares with your PCB
If you are employed, your employer already deducts tax from your salary every month as PCB (also written MTD). That deduction is an estimate, worked out from your pay and whatever details your employer holds. It is not your final tax bill.
Your annual return is where the estimate gets trued up. Your real reliefs, the ones your employer never saw, come off your income, your actual tax for the year is worked out, and the PCB you have already paid is set against it. If the PCB was more than the final tax, the difference comes back to you as a refund. If it was less, you pay the balance. That is the whole reason two colleagues on identical salaries can end the year one getting money back and one writing a cheque.
PCB counts as your final tax only in a narrow case: one employer all year, employment income only, correctly deducted, and no joint assessment. Even then, not filing forfeits any refund you were owed, so most people are better off filing. To see where you would land, put the PCB from your payslips or EA form into the tax already deducted box in the calculator above and it will show the refund or the top-up.
How to pay less tax (legally)
The simplest lever is reliefs. Beyond the automatic individual relief, EPF and SOCSO, you can claim lifestyle spending, medical and education insurance, life insurance or takaful, SSPN savings for your children, childcare fees, and medical care for your parents — among 20+ others. The catch is evidence: LHDN can ask for your receipts and you must keep them for 7 years. That's exactly what MyTaxMate is for — it scans your receipts, tracks each relief against its cap, and gets your form filing-ready. See what LHDN actually fines people for →
Frequently asked questions
- How much income tax will I pay in Malaysia?
- It depends on your chargeable income — your total income minus your tax reliefs. Malaysia uses progressive resident rates from 0% up to 30%, so only the portion of income in each band is taxed at that band's rate. Enter your income above to get an estimate for the year of assessment you choose.
- What is chargeable income?
- Chargeable income is your total annual income after subtracting all your tax reliefs (such as the individual relief, EPF, lifestyle, insurance and others). Tax is calculated on this figure, not on your gross salary — which is why claiming every relief you qualify for matters.
- How can I reduce my income tax legally?
- By claiming every tax relief you're entitled to and keeping the receipts. Common ones include lifestyle (books, gadgets, internet, sports), medical and education insurance, life insurance, SSPN education savings, childcare, and medical care for your parents. LHDN requires you to keep supporting documents for 7 years.
- When is the income tax filing deadline?
- For salaried individuals (Form BE) it's 30 April, or 15 May if you file online via MyTax. For individuals with business or freelance income (Form B) it's 30 June, or 15 July online.
- Is this calculator accurate?
- It uses the real MyTaxMate tax engine and the latest LHDN rates, so the headline number reflects current law. It's still an estimate that covers the most common reliefs — your final figure depends on every relief and rebate you qualify for. It isn't tax advice.
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