What is the Malaysia Income Tax?
Malaysian income tax is administered by LHDN at progressive rates from 0% to 30%. Individual reliefs are unusually generous — the RM9,000 individual relief plus lifestyle, medical, education, insurance and childcare reliefs can substantially reduce chargeable income.
EPF is the mandatory retirement fund: employees contribute 11% and employers 13% (12% above RM5,000 monthly). EPF contributions attract relief up to RM4,000.
Formula & worked example
Tax = progressive bands from 0% to 30%
Worked example: RM90,000 income with RM9,000 of reliefs and 11% EPF. After the RM4,000 EPF relief, chargeable income is RM77,000, producing tax of about RM5,030 — an effective rate of just 5.6%. After EPF and SOCSO, net annual income is roughly RM74,710.
How to use this malaysia income tax calculator
- Enter your gross annual income.
- Add up all reliefs — individual, lifestyle, medical, education, insurance, childcare.
- EPF relief is capped at RM4,000 and combined with life insurance in some categories.
- Check the effective rate — reliefs make it far lower than the marginal band suggests.
Smart tips
- Track lifestyle relief spending through the year — books, sports equipment, internet and electronics all qualify up to the annual cap.
- PRS (Private Retirement Scheme) contributions give an extra RM3,000 of relief on top of EPF.
- SSPN education savings for children generate additional relief and are often overlooked.
- Keep all receipts for seven years; LHDN can request substantiation for any relief claimed.
- Voluntary EPF contributions above the mandatory rate earn dividends historically around 5–6% tax-free.
Frequently asked questions
What are Malaysian income tax rates?
Progressive from 0% up to RM5,000, rising through 1%, 3%, 6%, 11%, 19%, 25%, 26%, 28% and 30% for the highest incomes. This is the scale LHDN publishes for assessment years 2023 to 2025; check hasil.gov.my for any later revision.
What is EPF?
The Employees Provident Fund — Malaysia's mandatory retirement scheme. Employees contribute 11% and employers 12–13%.
What reliefs can I claim?
Individual relief of RM9,000, plus lifestyle, medical, education, insurance, childcare, PRS and SSPN reliefs, each with its own cap.
When is the Malaysian tax deadline?
Individual returns are generally due by 30 April for employment income, or 30 June for business income.
Want the theory behind the numbers? Browse the Money Blog for worked guides.
Written by Gurjeet Singh, Sharpen Solutions. Last reviewed 15 Oct 2026. Sources: LHDN (Inland Revenue Malaysia) — individual tax rate schedule, YA 2023–2025. How we check these numbers.