1. How Income Tax Is Calculated In Malaysia

Malaysia uses a progressive tax system where higher income earners pay a higher percentage of tax. The tax is calculated by applying different rates to portions of your income within specific tax brackets, then subtracting any eligible rebates.

2. Understanding the Tax Calculation

The calculator uses Malaysia's progressive tax formula:

Where:

• Taxable Income — Your annual income after deductions and exemptions
• Tax Rate — Progressive rate based on income brackets
• Rebates — Tax reliefs and rebates you're eligible for

Explanation: Different portions of your income are taxed at different rates, with the first RM5,000 being tax-free.

3. Malaysia's Progressive Tax System

Details: Malaysia has different tax brackets for single and married individuals. The tax rates range from 0% to 26% depending on your income level and filing status.

4. Using the Calculator

Tips: Enter your annual taxable income in RM, select your filing status, and include any tax rebates you're eligible for. The calculator will apply Malaysia's current tax rates automatically.

5. Frequently Asked Questions (FAQ)

Q1: What counts as taxable income in Malaysia?
A: Taxable income includes employment income, business profits, dividends, rental income, etc., after allowable deductions.

Q2: When is the tax filing deadline?
A: Typically April 30th for e-Filing and April 15th for manual filing for the previous year's income.

Q3: What are common tax rebates in Malaysia?
A: Common rebates include personal relief (RM9,000), EPF relief (up to RM4,000), and lifestyle relief (up to RM2,500).

Q4: Are there different rates for residents and non-residents?
A: Yes, non-residents are taxed at a flat rate of 30% with no tax reliefs.

Q5: How often are tax brackets updated?
A: Tax brackets may be revised in the annual budget, typically announced in October.