Personal Income Tax

Tax residence status of individuals

An individual is regarded as tax resident if he meets any of the following conditions, i.e. if he is:

  • in Malaysia for at least 182 days in a calendar year;
  • in Malaysia for a period of less than 182 days during the year but that period is linked to a period of physical presence of 182 or more “consecutive” days in the following or preceding year. Temporary absences from Malaysia due to the following reasons are counted as part of the consecutive days, provided that the individual is in Malaysia before and after each temporary absence:

- business trips

- treatment for ill-health

- social visits not exceeding 14 days

  • in Malaysia for 90 days or more during the year and, in any 3 of the 4 immediately preceding years, he was in Malaysia for at least 90 days or was resident in Malaysia; or
  • resident for the year immediately following that year and for each of the 3 immediately preceding years.

 

Rates of tax

1.   Resident individuals

Chargeable income (RM)

YA 2022

YA 2023

Tax (RM)

% on excess

Tax (RM)

% on excess

5,000

0

1

0

1

20,000

150

3

150

3

35,000

600

8

600

8

50,000

1,800

13

1,800

11

70,000

4,400

21

4,000

19

100,000

10,700

24

9,700

24

250,000

46,700

24.5

45,700

25

400,000

83,450

25

83,200

600,000

133,450

26

133,200

26

1,000,000

237,450

28

237,200

28

2,000,000

517,450

30

517,200

30

  • A qualified person (defined) who is a knowledge worker residing in Iskandar Malaysia is taxed at the rate of 15% on income from an employment with a designated company engaged in a qualified activity in that specified region.
  • An approved individual under the Returning Expert Programme who is a resident is taxed at the rate of 15% for 5 consecutive YAs.
  • A non-citizen receiving a monthly salary of not less than RM25,000 and holding key positions / C-Suite positions is taxed at a flat rate of 15% for a period of 5 consecutive years. This incentive is limited to 5 non-resident individuals employed in each company that has been granted relocation tax incentive under PENJANA initiative (applications received by the Malaysian Investment and Development Authority (MIDA) by 31 December 2022, extended to 2024 for electronic and electrical sector).
  • Foreign-sourced income received by tax resident individuals is exempted from tax during a transitional period from 1 January 2022 to 31 December 2026 except for income which is received through a partnership business in Malaysia. 
2.   Non-resident individuals

Types of income

Rate (%)

Public entertainer’s professional income

15

Interest

15

Royalty

10

Special classes of income:

  • rental of moveable property
  • advice, assistance or services rendered in Malaysia 

10

Dividends (single tier)

Exempt

Business, employment income, discounts, rents, premiums, pensions, annuities, other periodical payments and other gains or profits (include payments received for part-time / occasional broadcasting, lecturing, writing, etc.)

30

Income other than the above

10

 

Personal reliefs for resident individuals

Types of relief

YA 2022 (RM)

Self

9,000

Disabled individual - additional relief for self

6,000

Spouse

4,000

Disabled spouse - additional spouse relief

5,000

Child:

 

  • per child (below 18 years old)

2,000

  • per child (over 18 years old):

receiving full-time instruction (matriculation course / pre-degree / A-Level)

2,000

  • per child (over 18 years old):

receiving full-time instruction of higher education in respect of:

- diploma level and above in Malaysia; or

- degree level and above outside Malaysia

OR serving under articles or indentures in a trade or profession in Malaysia

8,000

  • per physically / mentally disabled child

6,000

  • physically / mentally disabled child (over 18 years of age) receiving full-time instruction at institution of higher education in respect of:

- diploma level and above in Malaysia; or

- degree level and above outside Malaysia

OR serving under articles or indentures in a trade or profession in Malaysia

14,000

Life insurance premiums (Note 1)

3,000*

EPF contributions and contributions to pension schemes by individuals or public servants (Note 1)

4,000*

Private retirement scheme contributions and deferred annuity scheme premium (until YA 2025)

3,000*

Insurance premiums for education or medical benefits

3,000*

Expenses on medical treatment, special needs or carer expenses for parents (evidenced by medical certification)

8,000*

Employee’s contribution to Social Security Organisation (SOCSO) and Employment Insurance System (EIS)

350* 

Medical expenses for self, spouse or child suffering from a serious disease, expenses incurred on fertility treatment, or vaccination up to RM1,000 (including fees of up to RM1,000 incurred by self, spouse or child for complete medical examination, COVID-19 detection test and mental health examinations or consultations, w.e.f YA 2023 expanded to include dental examination and treatment by dental practitioners registered with the Malaysian Dental Council).

8,000*

Fee expended for:

  • any course of study up to tertiary level other than a degree at Masters or Doctorate level, undertaken for the purpose of acquiring legal, accounting, Islamic financing, technical, vocational, industrial, scientific or technological qualification or skill

  • any course of study for a degree at Masters or Doctorate level undertaken for the purpose of acquiring any qualification or skill 

  • any course of study undertaken for the purpose of upskilling and self-enhancement, limited to RM2,000 (until YA 2023)

7,000*

Purchase of supporting equipment for self (if a disabled person) or for disabled spouse, child or parent

6,000*

Lifestyle relief consolidated with the following:

  • purchase or subscription of books, journals, magazines, newspaper and other similar publications (in the form of hardcopy or electronic) for the purpose of enhancing knowledge
  • purchase of personal computer, smartphone or tablet
  • purchase of sports equipment and gym memberships, and
  • internet subscription

2,500*

 

Purchase of breastfeeding equipment

1,000*

Fees paid to childcare centre and kindergarten (until YA 2023, extended to YA 2024)

3,000*

Deposit for child into the Skim Simpanan Pendidikan 1Malaysia account established under Perbadanan Tabung Pendidikan Tinggi Nasional Act 1997 (until YA 2022, extended to YA 2024)

8,000*

Domestic travelling expenses (payment for accommodation, fee for entrance to tourist attractions and domestic tour package) (until YA 2022)

1,000*

Additional relief (on top of lifestyle relief) for purchase of personal computer, smartphone or tablet

2,500*

Additional relief (on top of lifestyle relief) for expenditure related to cost of purchasing sports equipment, entry/ rental fees for sports facilities and registration fees for sports competitions

500*

Costs related to electric vehicle (EV) charging facilities, including installation, rental, hire-purchase of equipment, or subscription fees (YAs 2022 and 2023) 2,500*

* Maximum relief

Note:

1. For public servants under the pension scheme, combined relief up to RM7,000 is given on Takaful contributions or payment for life insurance premium. W.e.f YA 2023 the relief provided for life insurance premiums is expanded to also include voluntary EPF contributions up to RM3,000.

Tax rebates for resident individuals

Types of rebate

RM

Individual’s chargeable income does not exceed RM35,000

400

If husband and wife are separately assessed and each chargeable income does not exceed RM35,000

400 (each)

If husband and wife are jointly assessed and the joint chargeable income does not exceed RM35,000

800

Rebate for Zakat, Fitrah or other Islamic religious dues paid

Actual amount expended

Rebate for departure levy paid for performing umrah and pilgrimage to holy places.

Actual amount expended (twice in a lifetime)

The above rebate granted is deducted from tax charged and any excess is not refundable.

 

Contact us

PwC Malaysia

General enquiries, PwC Malaysia

Tel: +60 (3) 2173 1188

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