income tax calculator in malaysia
Money Management

This Income Tax Calculator Guesstimates How Much You Owe LHDN

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Do you know how much you owe LHDN for income tax?

It’s ok, most people don’t. That’s why it’s a good idea to use an income tax calculator in Malaysia before submitting your actual income tax. This is good practice, whether you are a first-time taxpayer or if you have been doing your own taxes for a while.

There are a few income tax calculator in Malaysia but my favourite is KiraCukai.my. Simply input your data and it will automatically calculate your tax payable amount.

*Do note that the final amount may be different from your actual tax payable amount – so only use this tool to guesstimate rather than get the true figure.

This income tax calculator in Malaysia is pretty straightforward, but the accuracy of your income tax guesstimate (lol) depends on the data you provide, which admittedly contains a lot of variables.

However, the basics of it are:

  • How much you earn – Your total income is your annual salary (plus benefits-in-kind, if any) or business profit (sales MINUS expenses) or both, combined.
  • Note: Some sources of income are not subjected or partially subjected to income tax. Also, you may already pay income tax via PCB (Potongan Cukai Bulanan) – in which case, check if you’ve OVERpaid so you can get refund
  • Learning which tax reliefs you can claim – see #2
  • Deducting tax rebate, if any

Because there are a few areas to cover, I’ve divided this article into a compilation of guides covering most-asked questions on paying income tax. Let’s start with..

#1 – For First-timers (Basic Knowledge)

I’m listing here multiple guides and videos suitable for first-timers. Start here if you’ve never submitted income tax your whole life.

Opening your account for the first time:

How much is taxable income in Malaysia for Year Assessment 2021:

According to LHDN Income Tax Rates page, the chargeable income tax in Malaysia for Year Assessment 2021 follows the following table:

CategoryChargeable Income (RM, Annual)Calculations (RM)Rate %Tax (RM)
A0-5000On the First 500000
B5000-20000On the First 5000
Next 15000
10
150
C20001-35000On the First 20000
Next 15000
3150
450
D35000-50000On the First 35000
Next 15000
8600
1200
E50001-70000On the First 50000
Next 20000
131800
2600
F70001-100000On the First 70000
Next 30000
214400
6300
G100000-250000On the First 100000
Next 150000
2410700
36000
H250001-400000On the First 250000
Next 150000
24.546700
36750
I400000-600000On the First 400000
Next 200000
2583450
50000
J600001-1000000On the First 600000
Next 400000
26133450
104000
K1000001-2000000On the First 1000000
Next 1000000
28237450
280000
LExceeding 2000000On the First 2000000
Next Ringgit
30517450
…….

Here’s how it works – let’s say your chargeable income for Year Assessment 2021 is RM80000. Your taxes are:

  • The first RM70000 of your chargeable income (category F) = RM4400
  • The next RM10000 of your chargeable income = 21% of RM10000 = RM2100
  • Total tax payable = RM6500 (before minus tax rebate, if any)

Let’s do another example. Say your chargeable income for Year Assessment 2021 is RM65000. Your taxes are (before minus tax rebate):

  • The first RM50000 of your chargeable income (category E) = RM1800
  • The next RM15000 of your chargeable income = 13% of RM15000 = RM1950
  • Total tax payable = RM3750 (before minus tax rebate, if any)

However, you don’t have to memorise all this 🙂 Simply use the income tax calculator in Malaysia that I recommended, KiraCukai.my and it’ll automatically give your income tax guestimate. This section only applies if you want to calculate your income tax manually.

Helpful videos:

#2 – Knowing all the tax reliefs that you may be eligible for in 2022

After you learned the basics, now you can optimise your income tax filings so you don’t need to pay more than you should. A resident individual is eligible for many types of tax relief.

Click here for the List of Tax Relief for Residential Individuals Year of Assessment 2021 by LHDN, or refer to the image below.

tax relief 2021 malaysia

The majority of tax relief is more or less the same most years, but they might add on or adjust some categories, so you just have to keep yourself updated. For example:

  • SSPN contribution used to be maxed at RM7000 – now it’s RM8000
  • Payment for certain hotels – up to RM1000
  • You can now claim up to RM1000 for vaccinations and RM1000 Covid-19 detection and vaccination

In any case, it’s good practice to know the tax reliefs applicable to you and keep the receipts for at least 7 years. Digital copy works too.

#3 – For very specific situations

Tax computation for sole proprietor in Malaysia (freelancers/self-employed):

Now, I mentioned earlier that business owners must declare business profit as income, which is your sales MINUS expenses.

If you have a business (even small scale or side hustles alongside main job), you MUST register it as a company if you want to claim business-related expenses. Depending on your nature of business, you can register as Sole Proprietorship, Limited Liability Partnership or Company.

For many small-scale online businesses in Malaysia, Sole Proprietorship (single owner) or Partnership (more than one owner) is enough, and the cheapest option.

(According to one tax professional, don’t do Sdn Bhd when you first start out. Only consider Sdn Bhd if you make more than RM150,000 per year (can get better tax rate).

More info:

Tax computation for sole proprietor in Malaysia (other additional sources of income):

Clarification and exemptions for employment income and benefits-in-kind:

If you are upper-management in MNC or similar, check if the perks you get from work are taxable.

Women returning to work after career breaks of at least 2 years are also exempted for up to 12 consecutive months.

If you got audited:

If you get unlucky, and LHDN feels like something isn’t ‘right’ with your tax submission (or nonsubmission), they might audit you.

For Muslims:

Zakat is a type of tax rebate.

For unemployed:

#4 – Comprehensive Income Tax Guides

And last but not least, here are more in-depth guides for those who want to learn the different terminologies in greater detail. You don’t *need* to read these comprehensive guides to file your taxes, but they are great for supplemental information.

Any other questions about income tax?

Are there any other questions not answered about paying income tax in Malaysia? Let me know in the comments section!

(If you have overly complicated questions, might as well ask LHDN yourself for the surest answer. Call the LHDN Hasil Care Line at 03-8911 1000 or email them from here)


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4 Comments

  1. I would like to know, just in case you got the new update too…
    Can the RM2,500 lifestyle combined with the new RM2,500 laptop/tablet/smartphone category and allow a single claim of RM5,000 laptop?

  2. Hi, if I’m working remotely from Malaysia for an international company whose entity not registered in Malaysia, do I still have to pay the tax?

  3. Hi Suraya, I wonder if you or any of the readers here know the definitive answer to this: if you are a self-published author in Malaysia and self-publish novels on international platforms such as Amazon and Google Books, would you be subject to being taxed in Malaysia for income derived from those platforms? For Malaysian self-publishers, Amazon automatically withholds 30% of the sales revenue for tax purposes in the US.

    Also, if you’re not subject to being taxed in Malaysia, should it then be necessary to register a company as a self-published writer who only publishes on international platforms like the above?

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