Malaysians have to file our income tax every year to the Inland Revenue Board of Malaysia (IRBM). We can start submitting our tax returns from 1 March 2024, and have a submission deadline of 30 April 2024 or 15 May 2024 for e-filing.
In 2023, the Malaysian government collected RM39.7 billion from individual income tax – a rise of 17.6% from 2022. According to its forecast for 2024, individual income tax revenue is expected to rise 6.9% to RM42.5 billion.
The collected tax will be allocated by the government to strengthen national security, develop public infrastructures and improve the welfare of all Malaysians.
Filing Your Income Tax
Malaysia has the self-assessment system (SAS) where taxpayers declare their own income and expenses, calculate their income tax, submit their Income Tax Return Form (ITRF) and make tax payments.
Individuals with an annual income of more than RM34,000 and Monthly Tax Deduction (MTD) are required to file their income.
You can declare your income online by submitting your form via MyTax. Log in to your MyTax account using your identification number and password. Then, you can choose the right form according to your income.
Alternatively, you can also declare your income manually by downloading and sending a hardcopy of the form to IRBM’s office.
You can declare your income with these different types of forms for different sources of income.
| Forms | Individuals |
| Form BE | Resident individuals with employment income and do not run a business |
| Form B | Resident individuals who have a business and employment income as well as other types of income |
| Form M | Non-resident individuals who have business, employment income and others |
You need to submit your form on or before the following due dates for employment and business income:
| Income | Online | Manual |
| Employment | 15 May 2024 | 30 April 2024 |
| Business | 15 July 2024 | 30 June 2024 |
Read Also: Malaysians’ Guide To Important Personal Finance Dates And Events In 2024
Types Of Taxable Income
Individuals have to pay income tax on a variety of their income sources, including:
- Gains/profit from a business;
- Gains/profit from employment;
- Dividends, interest or discounts;
- Rent, royalties or premiums;
- Pensions, annuities or other periodic payments; and
- Gains/profit not falling under any of the foregoing paragraphs.
Meanwhile, foreign income has been taxable since 2022. However, the Malaysian government has given an exemption, effective from 2022 to 2026, to individual residents, where they won’t be taxed on their foreign income, provided that it’s already taxed in the country of origin.
For example, if you are working in Singapore but living in Malaysia, you would have to pay income tax in Singapore and not Malaysia.
Tax On Business Income
Aside from employment income, individuals will have to also file tax on income gained from businesses such as sole proprietorships and partnerships. Self-employed individuals with income from online business or e-hailing will also need to file tax on their income.
Depending on your business income, you will be taxed at a rate from 0% to 30%.
You will also be eligible to claim tax reliefs and expenses for business owners.
Income Tax Rates
Malaysia has a tiered tax rate system according to income brackets. Individuals with an annual income of RM5,000 and below are in the lowest income bracket while individuals whose annual earnings exceed RM2 mil are in the highest income bracket.
| Category | Chargeable Income | Calculations (RM) | Rate (%) | Tax (RM) |
| A | 0 – 5,000 | On the First 5,000 | 0 | 0 |
| B | 5,001 – 20,000 | On the First 5,000 Next 15,000 |
1 | 0 150 |
| C | 20,001 – 35,000 | On the First 20,000 Next 15,000 |
3 | 150 450 |
| D | 35,001 – 50,000 | On the First 35,000 Next 15,000 |
6 | 600 900 |
| E | 50,001 – 70,000 | On the First 50,000 Next 20,000 |
11 | 1,500 2,200 |
| F | 70,001 – 100,000 | On the First 70,000 Next 30,000 |
19 | 3,700 5,700 |
| G | 100,001 – 400,000 | On the First 100,000 Next 300,000 |
25 | 9,400 75,000 |
| H | 400,001 – 600,000 | On the First 400,000 Next 200,000 |
26 | 84,400 52,000 |
| I | 600,001 – 2,000,000 | On the First 600,000 Next 1,400,000 |
28 | 136,400 392,000 |
| J | Exceeding 2,000,000 | On the First 2,000,000 Next ringgit | 30 | 528,400 |
For example, if your chargeable income is RM52,000, the following will be your tax calculations:
Tax on first RM50,000: RM1,500
Tax on next RM2,000: 11% x RM2,000 = RM220
Total tax payable: RM1,720
Claiming Tax Relief
The government offers tax relief on a range of expenses to ease the burden of income tax payments for certain individuals.
For example, if you’re caring for your elderly parents, you’re entitled to tax relief on medical treatment and carer expenses for your parents. You can also claim lifestyle expenses such as books, computers, sports equipment and internet subscriptions for tax relief.
Here’s a list of claimable expenses for the year of assessment 2023:
| Tax Relief | Amount (RM) |
| Individual and dependent relatives | 9,000 |
| Medical treatment, special needs and carer expenses for parents (Medical condition certified by medical practitioner) | 8,000 (Restricted) |
| Purchase of basic supporting equipment for disabled self, spouse, child or parent | 6,000 (Restricted) |
| Disabled individual | 6,000 |
Education fees (Self):
|
7,000 (Restricted) |
Medical expenses on:
|
10,000 (Restricted) |
Expenses (Restricted to RM1,000) on:
|
|
Expenses (Restricted to RM4,000) for child aged 18 and below:
|
|
Lifestyle – Expenses for the use / benefit of self, spouse or child in respect of:
|
2,500 (Restricted) |
Lifestyle – Additional relief for the use / benefit of self, spouse or child in respect of:
|
500 (Restricted) |
| Purchase of breastfeeding equipment for own use for a child aged 2 years and below (Deduction allowed once in every 2 years of assessment) | 1,000 (Restricted) |
| Child care fees to a registered child care centre / kindergarten for a child aged 6 years and below | 3,000 (Restricted) |
| Net deposit in Skim Simpanan Pendidikan Nasional (Net deposit is the total deposit in 2023 MINUS total withdrawal in 2023) | 8,000 (Restricted) |
| Husband / wife / payment of alimony to former wife | 4,000 (Restricted) |
| Disabled husband / wife | 5,000 |
| Each unmarried child and under the age of 18 years old | 2,000 |
| Each unmarried child of 18 years and above who is receiving full-time education (“A-Level”, certificate, matriculation or preparatory courses). | 2,000 |
Each unmarried child of 18 years and above that:
|
8,000 |
| Disabled child | 6,000 |
| Additional exemption of RM8,000 disable child aged 18 years old and above, not married and pursuing diplomas or above qualification in Malaysia @ bachelor degree or above outside Malaysia in program and in Higher Education Institute that is accredited by related Government authorities | 8,000 |
| Life insurance and EPF Civil servants’ pension schemes, non-civil servants pension schemes and self-employed category:
|
7,000 (Restricted) |
| Deferred Annuity and Private Retirement Scheme (PRS) | 3,000 (Restricted) |
| Education and medical insurance | 3,000 (Restricted) |
| Contribution to the Social Security Organization (SOCSO) | 350 (Restricted) |
| Expenses on charging facilities for Electric Vehicle (Not for business use) | 2,500 (Restricted) |
Paying Your Income Tax
Once you successfully submit your form online, a notification will appear to indicate confirmation on receiving your form.
To find out how much income tax you need to pay, you will need to look at the MTD amount that has been deducted from your monthly salary and tax payable.
If the MTD amount paid is not sufficient to cover the tax payable, you will have to pay the remaining balance to the Inland Revenue Board of Malaysia (IRBM). You can pay online through the ByrHasil application or at the IRBM office.
Read Also: How You Can Enjoy Tax Incentives By Investing In A Start-Up In Malaysia
Follow Us On Telegram & Instagram!
Join our Malaysia Telegram channel (@dollarsandsensemy) and follow our Malaysia Instagram Page (@dnsmalaysia) as we bring you the latest finance content in Malaysia!
