Malaysia Income Tax Calculator

How income tax works in Malaysia

Malaysia taxes resident individuals on a progressive scale for Year of Assessment 2025. You are not taxed on every ringgit you earn - only on your chargeable income, which is total income minus tax reliefs.

The first RM5,000 of chargeable income is tax-free. Rates then step up from 1% to 30%, and only the portion of income inside each band is taxed at that band rate.

A worked example

Take someone earning RM60,000 a year (RM5,000 a month) claiming only the standard reliefs - RM9,000 individual relief plus RM4,000 of mandatory EPF. That leaves a chargeable income of RM47,000, and the tax is built up band by band:

The top slice is taxed at 6%, but the effective rate is only about 2.2% of the RM60,000 earned. That gap between your band and your real rate is the most misunderstood part of Malaysian income tax.

Tax reliefs reduce what you pay

Every resident gets an automatic RM9,000 individual relief. Common additional reliefs include EPF contributions (up to RM4,000), life insurance and voluntary EPF (up to RM3,000), lifestyle spending (up to RM2,500), and reliefs for a spouse, children, parents and medical costs. Totalling your reliefs gives a closer estimate.

Reliefs are worth most to higher earners, because each ringgit of relief is saved at your top marginal rate. The same RM2,500 lifestyle relief saves RM150 for someone in the 6% band, but RM625 for someone in the 25% band.

The RM400 rebate

If your chargeable income is RM35,000 or below, you receive a RM400 tax rebate, which often cancels the tax entirely. A rebate is more powerful than a relief: it comes off the tax itself rather than off your income. Landing just above that threshold is worth avoiding - a single extra relief can drop you under it and erase the bill.

Common mistakes this calculator helps you avoid

• Comparing your gross salary to the brackets. Tax applies to chargeable income, after reliefs - always a materially lower figure.
• Fearing a raise. Moving into a higher band taxes only the ringgits above the threshold, never your whole income.
• Forgetting the PCB you already paid. Monthly tax deducted by your employer is offset against this figure, so you may be due a refund rather than a payment.
• Assuming you are a tax resident. Under 182 days in Malaysia in the year means a flat 30% with no reliefs at all, and none of the above applies.