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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 (“shorter period”) but that period is linked to a period of physical presence of 182 or more “consecutive” days in the following or preceding year (“longer period”). 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 2020

YA 2021

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

14

1,800

13

70,000

4,600

21

4,400

21

100,000

10,900

24

10,700

24

250,000

46,900

24.5

46,700

24.5

400,000

83,650

25

83,450

25

600,000

133,650

26

133,450

26

1,000,000

237,650

28

237,450

28

2,000,000

517,650

30

517,450

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 (w.e.f applications received by the Malaysian Investment and Development Authority [MIDA] from 7 November 2020 until 31 December 2021)

 
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
  • technical or management services fees*#
  • payment for services rendered in connection with use of property or installation or operation of any plant, machinery or other apparatus purchased from a non-resident person*

10

Dividends (single tier)

Exempt

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

30

Income other than the above

10

* Only services rendered in Malaysia are liable to tax. 
# Services liable to tax refers to any advice, assistance or services rendered in Malaysia, and is not only limited to services which are of technical or management in nature.

 

Personal reliefs for resident individuals

Types of relief

YA 2021 (RM)

Self

9,000

Disabled individual - additional relief for self

6,000

Spouse

4,000

Disabled spouse - additional spouse relief (Note 5)

5,000

Child:

 

  • per child (below 18 years old)

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 (Note 1)

4,000*

Private Retirement Scheme contributions and Deferred annuity scheme premium (until YA 2021, extended to 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) (Note 6)

8,000*

Parental care relief (until YA 2020):

  • father
  • mother

 

1,500

1,500

Employee’s contribution to Social Security Organisation (SOCSO)

250*

Medical expenses for self, spouse or child suffering from a serious disease, expenses incurred on fertility treatment, or vaccination up to RM1,000 (w.e.f YA 2021) (including fees of up to RM500 (RM1,000 w.e.f. YA 2021) incurred by self, spouse or child for complete medical examination)

8,000*
(Note 7)

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 skills or qualifications or any course of study for a degree at Masters or Doctorate level undertaken for the purpose of acquiring any skill or qualification. This includes fees for attending upskilling and self-enhancement courses , limited to RM1,000 (w.e.f YAs 2021 to 2022)

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 (w.e.f. YA2021) of books, journals, magazines, newspaper and other similar publications 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 child care centre and kindergarten (Note 2)

3,000*

Deposit for child into the Skim Simpanan Pendidikan 1Malaysia account established under Perbadanan Tabung Pendidikan Tinggi Nasional Act 1997 (until YA 2020, extended to YA 2022)

8,000*

Domestic travelling expenses (payment for accommodation and fee for entrance to tourist attractions) (Special Relief) (Note 3)

1,000*

Additional relief (on top of lifestyle relief) for purchase of personal computer, smartphone or tablet (Special Relief) (Note 4)

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 of RM500 (w.e.f. YA 2021)

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. 
2. For YA 2020 and YA 2021. Previously the relief was limited to RM1,000 in YA 2019. 
3. For expenses incurred between 1 March 2020 until 31 December 2021. 
4. For purchases made between 1 June 2020 until 31 December 2020.
5. Previously limited to RM3,500 in YA 2020.
6. Previously limited to RM5,000 in YA 2020.
7. Previously limited to RM6,000 in YA 2020.

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.

 


This publication is a quick reference guide outlining Malaysian tax information which is based on taxation laws and current practices. This booklet also incorporates in coloured italics the 2021 Malaysian Budget proposals announced on 6 November 2020 and the Finance Bill 2020. These proposals will not become law until their enactment and may be amended in the course of their passage through Parliament.

This booklet is intended to provide a general guide to the subject matter and should not be regarded as a basis for ascertaining the liability to tax in specific circumstances. No responsibility for loss to any person acting or refraining from acting as a result of any material in this publication can be accepted by PricewaterhouseCoopers. Readers should not act on the basis of this publication without seeking professional advice.

 

Published by
PricewaterhouseCoopers Taxation Services Sdn Bhd (464731-M)
Level 10, 1 Sentral, Jalan Rakyat, Kuala Lumpur Sentral,
P.O. Box 10192, 50706 Kuala Lumpur, Malaysia
Tel: 03-21731188 Fax: 03-21731288


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