Malaysia Income Tax 2026: Tax Brackets, PCB Deductions & Available Reliefs
Complete guide to Malaysia's personal income tax — 2026 progressive tax brackets, how PCB (monthly tax deduction) is calculated, all tax reliefs, and how to file your return.
Malaysia uses a progressive income tax system — the higher your income, the higher your tax rate on each additional ringgit earned. For most employees, income tax is collected monthly through PCB (Potongan Cukai Berjadual), where your employer deducts an estimated tax amount and remits it to LHDN. Understanding how your tax is calculated, which reliefs you can legally claim, and how PCB reconciles with your annual return is essential knowledge for every working Malaysian.
Published 2026-02-01 · 10 min read · Salary & Tax
What is PCB?
PCB stands for Potongan Cukai Berjadual — 'Scheduled Tax Deduction'. It is Malaysia's monthly income tax withholding system. Your employer deducts an estimated amount each month and sends it directly to LHDN (Lembaga Hasil Dalam Negeri — Inland Revenue Board).
PCB is not a final tax — it is a prepayment. When you file your annual e-Filing return by April 30, LHDN reconciles your actual tax liability against the total PCB already deducted. You receive a refund if you overpaid, or pay the shortfall if you underpaid (common with bonuses).
Employees can reduce their monthly PCB by declaring reliefs to their employer using Form CP21A at the start of each year. Without a declaration, your employer assumes the basic individual relief only.
Tax Residency: Who Pays Progressive Rates?
Tax residents pay progressive income tax rates with access to all personal reliefs. You are a tax resident if you are in Malaysia for at least 182 days in the calendar year.
Non-residents — including Malaysians who have been abroad for more than 183 days, and most short-term expatriates — pay a flat rate of 28% on Malaysian employment income with no access to personal reliefs.
2026 Income Tax Brackets (Residents)
Tax is calculated on 'chargeable income' — your total income minus all applicable reliefs.
| Chargeable Income | Tax Rate | Tax on This Tier |
|---|---|---|
| First RM5,000 | 0% | RM0 |
| RM5,001 – RM20,000 | 1% | RM150 |
| RM20,001 – RM35,000 | 3% | RM450 |
| RM35,001 – RM50,000 | 8% | RM1,200 |
| RM50,001 – RM70,000 | 13% | RM2,600 |
| RM70,001 – RM100,000 | 21% | RM6,300 |
| RM100,001 – RM400,000 | 24% | RM72,000 |
| RM400,001 – RM600,000 | 25% | RM50,000 |
| RM600,001 – RM2,000,000 | 26% | RM364,000 |
| Above RM2,000,000 | 30% | — |
Tax is progressive — only the income in each tier is taxed at that tier's rate. Earning RM70,001 does not mean all your income is taxed at 21%.
Tax Reliefs You Can Claim (2026)
Each ringgit of relief reduces your chargeable income, lowering the tax you owe.
| Relief | Maximum Amount | Notes |
|---|---|---|
| Individual self | RM9,000 | Automatic — no documentation needed |
| Spouse (no income) | RM4,000 | Only if spouse has no employment income |
| Child under 18 | RM2,000 each | Per qualifying child |
| Child over 18, in full-time education | RM8,000 each | Education certificate required |
| EPF + Life Insurance (combined) | RM7,000 | EPF: up to RM4,000; Life ins: up to RM3,000 |
| Medical expenses (serious illness) | RM8,000 | Licensed medical receipts required |
| Lifestyle (books, sports, internet, devices) | RM2,500 | Per year, with receipts |
| SSPN education savings | RM8,000 | Net deposit into SSPN account |
| Private Retirement Scheme (PRS) | RM3,000 | For contributions into approved PRS funds |
| Medical examination / health screening | RM1,000 | GP or specialist receipts |
| EV/Hybrid charging equipment | RM2,500 | Purchase or charging fees |
| Disabled individual (self) | RM6,000 | Additional relief if self is disabled |
| Disabled spouse | RM5,000 | Additional to spouse relief |
| Disabled child | RM6,000 | Additional to child relief |
Step-by-Step Tax Calculation Example
A Malaysian resident earning RM6,000/month (RM72,000/year), with a non-working spouse and one child under 18, claiming EPF and lifestyle reliefs:
| Item | Amount |
|---|---|
| Gross Annual Income | RM72,000 |
| Less: Individual Relief | –RM9,000 |
| Less: EPF Relief (capped) | –RM4,000 |
| Less: Life Insurance | –RM3,000 |
| Less: Spouse Relief | –RM4,000 |
| Less: Child Relief (1 child) | –RM2,000 |
| Less: Lifestyle Relief | –RM2,500 |
| Less: Medical Examination | –RM1,000 |
| Chargeable Income | RM46,500 |
| Tax on first RM35,000 | RM600 |
| Tax on next RM11,500 @ 8% | RM920 |
| Total Annual Tax | RM1,520 |
| Estimated Monthly PCB | ~RM127/month |
Claiming all available reliefs is legal and encouraged. Keep receipts and documentation for at least 7 years in case of LHDN audit.
Filing Your Annual Tax Return
File your tax return via e-Filing at mytax.hasil.gov.my. The deadline for employment income is April 30 each year. First-time filers must first register for a tax number on the same portal.
Before filing, gather your EA Form (issued by your employer by February 28), receipts for all claimed reliefs, and your annual EPF statement.
Refunds for e-Filing submissions are typically processed within 30 working days. Penalties apply for late filing — up to 10% for first-time offences and higher for repeat offences.