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 2026			Budget 2027 proposal – YA 2027
*Chargeable income (RM)**	Tax (RM)	% on excess	Tax (RM)	% on excess
5,000	0	1	0	1
20,000	150	3	150	3
35,000	600	6	600	6
50,000	1,500	11	1,500	11
70,000	3,700	19	3,700	18
100,000	9,400	25	9,100	24
150,000			21,100	25
400,000	84,400	26	83,600	26
600,000	136,400	28	135,600	28
1,000,000			247,600	30
2,000,000	528,400	30	528,400	30

^{*Chargeable income in respect of the following income is subject to tax at 2%:

- Dividend in excess of RM100,000 from resident companies

- Profit distributions from Limited Liability Partnership (LLP) received by individual partner in excess of RM100,000}

The following categories of individuals are taxed at 15% on the employment income:

An approved individual under the Returning Expert Programme who is a resident. The incentive is for 5 consecutive YAs. Application made by 31 December 2027.

Individuals working in specific economic areas/zones or in the Global Services Hub (refer to the Special Economic Zones and Tax Incentive chapters).

2. Non-resident individuals

Types of income	Rate (%)
Public entertainer’s professional income	15
Interest	15
Royalties	10
Special classes of income: Rental of moveable properties Advice, assistance or services rendered in Malaysia	10
Dividends (single-tier) Up to RM100,000 In excess of RM100,000 chargeable income in respect of dividend income from resident companies	Exempt 2
Business income, 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
LLP’s profits derived from Malaysia Up to RM100,000 In excess of RM100,000 chargeable income in respect of profits of LLP	Exempt 2
Income other than the above	10
Foreign film actors and movie crews who carry out filming in Malaysia	0 - 10

3. Dividend Tax

2% dividend tax is imposed where dividend income in excess of RM100,000 is received by individual shareholders (resident and non-residents, and individuals who hold shares through nominees) from resident companies. The tax is imposed on the chargeable dividend income after eligible tax deductions.

4. Limited Liability Partnership’s Profit Distribution

2% tax is imposed on chargeable income in respect of the LLP’s profit derived from Malaysia received by individual partners, which is in excess of RM100,000 per year. The tax is applied on the chargeable income from such profit distributions after allowable reliefs.

Personal reliefs for resident individuals

Types of relief	YA 2026 / YA 2027 (RM)
Self	9,000 (Budget 2027 proposed an increase to RM12,000)
Disabled individual - additional relief for self	7,000
Spouse	4,000
Disabled spouse - additional spouse relief	6,000
Child (for each):
Below 18 years old	2,000
Over 18 years old, and receiving full-time instruction (matriculation course / pre-degree / A-Level),	2,000
Over 18 years old, and receiving full-time instruction at an establishment of higher education in Malaysia (diploma level and above) or outside Malaysia (degree level and above), or serving under article of indentures in a trade or profession	8,000
Physically or mentally disabled child	8,000
Disabled child who is receiving full-time instruction at an establishment of higher education in Malaysia (diploma level and above) or outside Malaysia (degree level and above), or serving under article of indentures in a trade or profession	16,000
Life insurance premiums or takaful contributions (self / spouse / children) or additional voluntary contributions to Employee Provident Fund (EPF) or for both	3,000*
Voluntary or obligatory EPF contributions by individuals or civil servants	4,000*
Private retirement scheme contributions and deferred annuity (until YA 2030)	3,000*
Insurance premiums for education or medical benefits (self / spouse / children)	4,000*
Employee’s contribution to Social Security Organisation (SOCSO), Budget 2027 proposed expansion to include Employment Insurance System (EIS) and mandatory contributions under the Self-Employment Social Security Scheme (LINDUNG KENDIRI)	350*
Budget 2027 proposed voluntary employee contributions to the Non-Employment Injury Scheme (LINDUNG 24) and 17 non-mandatory sectors under LINDUNG KENDIRI	150*
Medical expenses for parents and grandparents: Medical treatment Dental treatment Complete medical examination include any vaccination up to RM1,000 Special needs or carer expenses (Budget 2027 proposed to include all expenses incurred at home, day care centres and residential care centres (not limited to medical care expenses))	8,000*
Health and Well-being for self, spouse or child: Treatment for a serious disease Fertility treatment for self or spouse Budget 2027 proposed to include postnatal care services provided by a confinement centre or qualified individual (up to RM3,000) Vaccination registered with the National Pharmaceutical Regulatory Agency - (up to RM1,000) Dental examination or treatment by dental practitioners registered with the Malaysian Dental - (up to RM1,000) Complete medical examination or disease detection fees, purchase of self-testing medical device, or mental health examinations or consultations - (up to RM1,000). Learning disability diagnosis and early intervention program and rehabilitation treatment for learning disability for children aged 18 years old or below (up to RM10,000). Budget 2027 proposed purchase of breastfeeding equipment for children aged 2 years and below, paid by self or spouse (up to RM1,000).	10,000*
Education and Skills Training Fees: 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 for a degree at Masters or Doctorate level undertaken for the purpose of acquiring any qualification or skill recognised by Director General of Skills Development, undertaken for the purpose of upskilling and self-enhancement, limited to RM2,000 (until YA 2026) Budget 2027 proposed revision as follows: Fees incurred for self to undertake courses or studies recognised by any regulatory agency at the Certificate, Diploma, Bachelors, Masters or Doctor of Philosophy level in any field at any local institution or professional body in Malaysia recognised by the Government of Malaysia or approved by the Minister of Finance Fees incurred for self or spouse limited to RM3,000 to undertake upskilling or self-enhancement courses or studies in the field of Technical and Vocational Education and Training (TVET) recognised by the Director General of Skills Development Fees incurred limited to RM2,000 for undertaking: Courses, training and skills and self-enhancement classes unrelated to employment for self or spouse; or Courses, training, classes or tuition in the field of Science, Technology, Engineering and Mathematics (STEM), arts, languages and religion for children.	7,000*
Purchase of supporting equipment for disabled self, spouse, child or parent	6,000*
Lifestyle relief for self, spouse or child for: purchase or subscription of books, journals, magazines, newspaper and other similar publications (hardcopy or electronic form) for the purpose of enhancing knowledge purchase of personal computer, smartphone or tablet internet subscription fees for any other upskilling or self-enhancement courses Budget 2027 proposed recategorizing to Education and Skills Training, and expansion to include the following: - Subscription to artificial intelligence (AI) software and applications for self, spouse or child - Cost of pet adoption from registered animal shelters - Registered veterinary services for vaccination and spaying or neutering procedures	2,500*
Sports equipment and activities for self, spouse, child or parents: Cost of purchasing sports equipment (Budget 2027 proposed inclusion of sports shoes, limited to RM300), Entry / rental fees for sports facilities, Registration fees for sports competition, Gym membership fees or sports training provided by registered sports clubs / societies / companies	1,000*
Purchase of breastfeeding equipment (once in every two YAs) Budget 2027 proposed recategorizing to Health and Well-being.	1,000*
Fees paid to registered childcare centre and kindergarten for child aged six years and below or care centre for child aged 12 years and below for children up to 12 years old	3,000*
Deposit for child into the Skim Simpanan Pendidikan Nasional account, claimable by either parent (until YA 2027)	8,000*
Costs related to - electric vehicle charging facilities, including installation, rental, hire-purchase of equipment, or subscription fees, purchase of food waste composting machine for household use (once either in the YA 2025, 2026 or 2027) Installation or purchase of food waste grinder machine and closed-circuit television (once either in the YA 2026 or 2027) **limited to one purchase each	2,500*
Housing loan interest paid for the first 3 consecutive YAs on residential property (purchased between 1 January 2025 to 31 December 2027) with value of:
RM500,000 and below	7,000*
RM500,000 - RM750,000:	5,000*
Entrance fees to tourist attractions, or arts and cultural programmes (YA 2026 only) (Budget 2027 proposed an extension to YA 2027)	1,000*

^{* Maximum relief}

Tax rebates for resident individuals

Types of rebate	YA 2026 / YA 2027 (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 (claim is limited to two trips in a lifetime).	Actual amount expended

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