How Malaysian income tax works
Malaysia uses a progressive tax system. Each ringgit of your chargeable income is taxed at the rate of the bracket it falls into — not all your income at the highest rate. This is why your effective tax rate is always lower than your marginal rate.
The calculation has three steps: figure out your chargeable income (gross minus reliefs), apply the bracket rates, then subtract any applicable rebate.
The formula
Tax = Σ (income in bracket × bracket rate)
Final Tax = Tax − RM 400 rebate (if Chargeable ≤ RM 35,000)
Tax brackets — YA 2025 (resident individuals)
| Chargeable income (RM) | Rate | Tax on bracket (RM) |
|---|---|---|
| 0 – 5,000 | 0% | 0 |
| 5,001 – 20,000 | 1% | 150 |
| 20,001 – 35,000 | 3% | 450 |
| 35,001 – 50,000 | 6% | 900 |
| 50,001 – 70,000 | 11% | 2,200 |
| 70,001 – 100,000 | 19% | 5,700 |
| 100,001 – 400,000 | 25% | 75,000 |
| 400,001 – 600,000 | 26% | 52,000 |
| 600,001 – 2,000,000 | 28% | 392,000 |
| Above 2,000,000 | 30% | — |
Source: Lembaga Hasil Dalam Negeri Malaysia (LHDN). Rates apply to YA 2023, 2024, and 2025 — unchanged across these years.
Common reliefs you can claim (YA 2025)
- Personal relief: RM 9,000 (automatic for every resident)
- EPF & life insurance: up to RM 4,000 (mandatory EPF) + RM 3,000 (life insurance/takaful)
- Lifestyle: up to RM 2,500 — books, sports gear, internet, gym, electronics
- Medical: up to RM 10,000 — serious illness, fertility, vaccinations, health screening
- Parents: RM 1,500 each (parents above 60 with income under RM 24,000)
- Children: RM 2,000 each (basic), more for tertiary education
- SSPN (education savings): up to RM 8,000
- Voluntary EPF / PRS: up to RM 4,000 (extra above mandatory)
Reduce next year's tax bill — legally
Voluntary EPF (i-Saraan) and PRS contributions both qualify for tax relief. For someone in the 11% bracket, a RM 4,000 PRS contribution saves RM 440 in tax — and grows for retirement.
Compare PRS providers →Frequently asked questions
Do I need to file taxes in Malaysia?
What is the RM 400 rebate?
How is PCB different from annual tax?
Do I pay tax on bonuses?
What if my income is below the threshold?
Other Malaysian calculators
This calculator uses official LHDN YA 2025 brackets but does not cover every relief or special situation. For complex cases — joint assessment, business income, foreign income, special incentives — consult a registered tax agent. Not financial advice. See our methodology for the full formula.