Malaysia PCB / MTD Monthly Tax Deduction Calculator

About the Malaysia PCB / MTD Monthly Tax Deduction Calculator

Check the PCB — Potongan Cukai Bulanan, the monthly tax deduction (MTD) — on any month’s payslip with the formula LHDN sets for payroll software. Enter this month’s pay, the year-to-date figures (or let the calculator work them out from the same pay every month), your family details and any Form TP1 claims, and it shows the PCB to deduct with every step of LHDN’s working: the chargeable income P for the year, the M, R and B of Table 1, the PCB and zakat already paid, the five-sen rounding and the RM10 rule.

Bonuses and other additional remuneration follow LHDN’s five steps, zakat is taken off the month’s PCB, and non-residents pay 30%. A table carries the year on to December with the same pay, so you can see the PCB for the whole year beside the tax on it. Nothing you type leaves your browser.

Without a pass, the free preview shows the month’s PCB in full, with the first rows of the working and of the year; a Pro pass unlocks every figure, the whole working, the year to December, the working to copy and the CSV.

LHDN’s formula

For a resident employee (MTD specification):

• MTD for the month = [(P − M) × R + B − (Z + X)] ÷ (n + 1)
• P = Σ(Y − K) + (Y1 − K1) + (Y2 − K2) × n − (D + S + DU + SU + Q × C + ΣLP + LP1): the year’s chargeable income, from the pay so far (Y) and its EPF (K), this month’s pay (Y1) and EPF (K1), and the same pay for the n months left (Y2) with K2, the rest of the RM4,000 EPF relief spread over those months (or K1 if lower).
• D, S, DU, SU, Q × C: RM9,000 for yourself, RM4,000 for a spouse with no income (category 2), RM7,000 if you are disabled, RM6,000 for a disabled spouse, RM2,000 a child (a child of 18 or over in higher education, or a disabled child, counts as four; both, as eight).
• M, R, B: from Table 1 — the start of P’s tax band, its rate, and the tax up to M less the RM400 rebate (RM800 in category 2) while P is RM35,000 or less.
• Z, X: the zakat and the PCB paid before this month.

Net PCB = PCB − zakat for the month. A non-resident’s PCB is 30% of the month’s remuneration.

Bonuses and other additional remuneration

A bonus, arrears, a gratuity, compensation, a director’s fee not paid monthly or commission and allowances not paid every month are additional remuneration. LHDN works its PCB in five steps: (1) the PCB on normal pay and the year’s PCB without the extra pay, X + PCB × (n + 1); (2) P with the extra pay less its EPF; (3) the tax for the year on that P; (4) the PCB on the extra pay = step 3 − step 1 − zakat paid; (5) the PCB to deduct = the net PCB on normal pay + step 4. The extra tax the bonus adds to your year is deducted in the month it is paid.

Rounding, the RM10 rule and zakat

Every figure is cut to two decimals without rounding (123.4534 becomes 123.45), and the PCB is rounded up to the next five sen (287.02 becomes 287.05). If the PCB, or the PCB on additional remuneration, is under RM10, the employer does not deduct it — but a PCB under RM10 left after taking off the month’s zakat is deducted. Zakat larger than the PCB is not refunded through payroll; it still counts as zakat paid (Z) in later months.

Forms TP1 and TP3

Form TP1 lets you claim reliefs and rebates through payroll in the month you spend the money, instead of waiting for your tax return; your employer keeps it and you keep the receipts for seven years (Form TP1, explanatory notes). Its items and yearly limits:

• C1 Medical, dental, special needs and carer expenses for parents or grandparents: up to RM8,000.
• C2 Basic supporting equipment for a disabled self, spouse, child or parent: up to RM6,000.
• C3 Education fees for yourself: up to RM7,000.
• C4 Medical expenses for yourself, your spouse or child: up to RM10,000.
• C5 Lifestyle: books, computer, smartphone or tablet, internet, skills courses: up to RM2,500.
• C6 Sports equipment, facility fees, competition entry, gym or training: up to RM1,000.
• C7 Breastfeeding equipment (mothers, child aged 2 or under): up to RM1,000.
• C8 Childcare, kindergarten, day-care or after-school transit centre fees (child 12 or under): up to RM3,000.
• C9 Net savings in SSPN (deposits less withdrawals in the year): up to RM8,000.
• C10 Alimony to a former wife (formal agreement): up to RM4,000.
• C11 Life insurance or family takaful (self, spouse or child) and extra voluntary EPF: up to RM3,000.
• C12 Private Retirement Scheme (PRS) and deferred annuity: up to RM3,000.
• C13 Education and medical insurance premiums: up to RM4,000.
• C14 SOCSO and EIS contributions: up to RM350.
• C15 EV charging, food-waste composter or grinder, home CCTV: up to RM2,500.
• C16 Interest on a loan for your first home: up to RM7,000 (RM5,000 for a house above RM500,000 up to RM750,000).
• C17 Entrance fees to tourist attractions and cultural or arts programmes: up to RM1,000.

Zakat you pay yourself and the departure levy for umrah are rebates on Section D: the formula takes both off the month’s PCB, like zakat deducted from salary. Form TP3 tells a new employer what you earned, the EPF, zakat and PCB with earlier employers this year, so the formula starts from the right year-to-date figures (Form TP3).

Limitations

• Follows LHDN’s current specification for computerised MTD calculation; employers using LHDN’s printed PCB schedule may differ by a few ringgit.
• The special formulas for the Returning Expert Programme, knowledge workers in a specified region and approved C-suite non-citizens (15% rates) are not included.
• “Same pay every month” assumes this month’s pay, EPF and zakat in every earlier month, with no bonus, TP1 claim or change of pay; enter the year-to-date figures when that is not so.
• Form TP1 limits are checked against this month’s claims; earlier claims for the same item count only as the total you enter.
• A departure levy for umrah claimed on Form TP1 has no field of its own: LHDN’s formula treats it like zakat, so add it to the month’s zakat.
• The projection keeps this month’s normal pay, EPF and zakat to December, with no further bonus or claims.

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