Malaysia Personal Income Tax Guide 2013 – Rates, Exemptions, Rebates

Paying your personal income tax and filling in tax returns can be a daunting matter, as there are many financial, technical and even legal considerations to be made when you file it in at Lembaga Hasil Dalam Negeri (LHDN or Hasil).

Our most popular guide for 2012, Malaysia Personal Income Tax Guide 2012 has now been updated with this guide, for your tax returns in 2013! Remember that you file in 2013, but for the 2012 calendar year of income and expenses

Update 25th October 2013: Income tax rates for 2015 reduced by 1-3% across bands



Do you earn more than RM29,775.00 per year (about RM2,480 per month) including all benefits, allowances, bonuses, overtime and commissions? You need to have a tax file with your income tax automatically deducted from your income, and reading this guide could save you up to RM100s on your tax expense!

If you earn less than RM29,775.00 per year, you don’t have to open a tax file and should not be paying any tax. If your employer is still deducting tax from your salary you should claim it all back. Read this guide to find out how!

If you are a salaried worker or civil servant under a Potongan Cukai Bulanan (PCB) or Monthly/Schedular Tax Deduction (MTD) system, you may be overpaying (or underpaying!) RM100’s of tax. Use our income tax calculator to find out how much you should be been paying, and how much you have actually been paying under the MTD system.

If you are self-employed or own your own business you may still be overpaying or underpaying on your tax.

For both employees and businesspeople, there are many widely known and less widely known ways to legally and legitimately reduce your tax via exemptions, relief and rebates.

The SaveMoney Malaysia Income Tax Calculator

Our very nerdy web team has created a simple tool which helps you calculate your tax based on how much you earn (or hope to earn!). Many people may be paying the wrong amount of tax!



Click for a quick and simple way to find out how to see how much the taxman will take from you (or has already taken)!

Resident of Malaysia Income Tax Rate Table for 2012 (for filing in 2013)

The personal income tax rate for Residents of Malaysia follows a progressive tax schedule, this means that the higher your chargeable income, the higher the tax rate you will have to pay.

For most non-residents (people who stay in Malaysia less than 182 days per year) the tax rate is 26% on all income earned in Malaysia with the exception of some professions which can be taxed at 15% (Public Entertainers etc) and 10% (payment for equipment servicing, technical advice and rent).

Note that your chargeable income is not the same as your gross salary or actual income for the year (in fact chargeable income is usually much lower), more on this later.

In the Malaysia Budget 2013 tabled in September 2012, the Government announced a tax rate reduction of 1% for all taxpayers with a chargeable income of RM50,000 or less. Remember this is only effective in 2013 (ie when you file your taxes in 2014). For assessment year 2012 (filing in 2013), the following rates apply:

Chargeable Income Tax Rate Cumulative Tax Budget 2013 Tax Rate Budget 2013 Cumulative Tax Saving
From RM0 – RM2,500 0% RM0 0% RM0 RM0
From RM2,501 – RM5,000 1% RM25 0% RM0 RM25
From RM5,001 – RM10,000 3% RM175 2% RM100 RM75
From RM10,001 – RM20,000 3% RM475 2% RM300 RM175
From RM20,001 – RM35,000 7% RM1,525 6% RM1,200 RM325
From RM35,001 – RM50,000 12% RM3,325 11% RM2,850 RM475
From RM50,001 – RM70,000 19% RM7,125 19% RM6,650 RM475
From RM70,001 – RM100,000 24% RM14,325 24% RM13,850 RM475
RM100,001 and Above 26% 26%

If your chargeable income was RM20,000 you will have to pay RM475 of tax. This can be done by either calculating each tax rate one by one (0% x RM2,500 + 1% x RM2,500 + 3% x RM5,000 + 3% x RM10,000 = RM475) or using the Cumulative Tax column.

If your chargeable income was RM25,000, you will have to pay RM475 + (7% x RM5,000) = RM475 + RM350 = RM825 of tax.

Chargeable Income

How do I calculate chargeable income?

Chargeable Income = Taxable income – Tax exemptions – Tax Reliefs


You have RM60,000 salary, RM1,000 local bank interest income and RM10,000 property rental income a year, so your taxable income is RM71,000. You get  the standard RM9,000 individual tax relief as well as the RM6,000 relief for EPF contributions (your EPF contribution should have been 11% of RM60,000, ie RM6,600 but you only get to minus off max RM6,000). All local bank interest income is Tax Exempted (see below).

So your Chargeable Income is

Chargeable Income = RM71,000 – RM1,000 – (RM 9,000 + RM6,000) = RM55,000.

Using the table above, your income tax for the year is RM3,325 + (19% x RM5,000) = RM4,275.00

*This is a simple example, for more information on your actual situation please use our Income Tax Calculator or continue reading this guide.

Taxable Income

Lembaga Hasil Dalam Negeri (LHDN) classifies taxable income as the following:

  1. Business or Profession
  2. Employment
  3. Dividends
  4. Interest
  5. Discounts
  6. Rent
  7. Royalties
  8. Premiums
  9. Pensions
  10. Annuities
  11. Others

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