By RinggitWise Editorial Team · Last reviewed: 24 April 2026 · 10 min read
The Complete Guide to Malaysian Tax (YA 2025/2026)
Malaysia operates a progressive territorial tax system — meaning income earned in Malaysia is taxed at increasing rates as you earn more, and most foreign income remains tax-exempt for individuals. The Inland Revenue Board (LHDN) administers personal tax via Form BE (employees) and Form B (business income). Filing season runs from 1 March to 30 April annually for Form BE, and to 30 June for Form B. The five calculators above cover personal income tax, corporate tax, RPGT, stamp duty, and SST — the five taxes most Malaysians encounter.
Personal Income Tax Brackets — YA 2025/2026
For the year of assessment 2025 (filed in 2026), Malaysia uses the following progressive brackets for tax-resident individuals:
| Chargeable Income | Rate | Tax on Bracket |
|---|---|---|
| First RM5,000 | 0% | RM0 |
| Next RM15,000 (5,001–20,000) | 1% | RM150 |
| Next RM15,000 (20,001–35,000) | 3% | RM450 |
| Next RM15,000 (35,001–50,000) | 6% | RM900 |
| Next RM20,000 (50,001–70,000) | 11% | RM2,200 |
| Next RM30,000 (70,001–100,000) | 19% | RM5,700 |
| Next RM300,000 (100,001–400,000) | 25% | RM75,000 |
| Next RM200,000 (400,001–600,000) | 26% | RM52,000 |
| Next RM1,400,000 (600,001–2,000,000) | 28% | RM392,000 |
| Above RM2,000,000 | 30% | — |
Non-resident individuals (those in Malaysia less than 182 days) are taxed at a flat 30% with no reliefs. Tax residency status matters significantly — if you can satisfy the 182-day rule, you save thousands.
Worked Example: A RM85,000 Salary in 2025
Hafiz earns RM85,000/year in 2025. He has standard EPF contributions, RM3,000 in life insurance, RM2,400 in SOCSO/EIS, RM6,000 in lifestyle (laptop + sport equipment + internet), and RM4,000 in EPF voluntary contribution.
- Gross income: RM85,000
- Less: EPF (11%): −RM9,350
- Less: SOCSO/EIS: −RM240
- Less: Personal relief: −RM9,000
- Less: Life insurance: −RM3,000
- Less: Lifestyle: −RM2,500 (capped)
- Less: EPF voluntary: −RM4,000 (counts toward RM7,000 EPF+life cap)
- Chargeable income: RM56,910
- Tax payable: approximately RM2,460
- Effective rate: 2.9%
Without the reliefs, his tax would have been ~RM5,200 — a savings of RM2,740. This is why claiming every available relief matters.
Top Tax Reliefs Most Malaysians Miss
- EPF voluntary contribution — RM4,000. Top up via i-Akaun. Get 5.50% dividend AND tax relief simultaneously.
- PRS (Private Retirement Scheme) — RM3,000. Until YA 2030. Public Mutual, AmInvest, Affin Hwang all offer PRS funds.
- Lifestyle relief — RM2,500. Books, computer, smartphone, broadband, gym. Keep receipts.
- Education fees (self) — RM7,000. Master's, PhD, or professional qualifications (CPA, ACCA, CFA).
- Medical insurance — RM3,000. Separate from life insurance. Stack with EPF + PRS for combined RM10,000+ in reliefs.
- SSPN (National Education Savings) — RM8,000. Saving for kids. Tax-deductible AND earns ~3.5% dividend.
- EV charging — RM2,500. For installation of EV charging at home (until YA 2027).
- Sports equipment — RM1,000. Sports equipment, gym memberships, sports tournament fees.
RPGT (Real Property Gains Tax) — When You Sell Property
Profit from selling Malaysian property is taxed under RPGT rates that depend on holding period and citizenship:
- Year 1–3 holding (Malaysian citizen): 30% on gain
- Year 4 (Malaysian citizen): 20%
- Year 5 (Malaysian citizen): 15%
- Year 6+ (Malaysian citizen): 0% on residential, 5% on commercial/companies
- Foreigners: 30% (year 1–5), 10% thereafter
Allowed deductions before tax: legal fees, valuation fees, agent commission, renovation costs (with receipts), and a one-time RM10,000 exemption per Malaysian citizen. The RPGT calculator above models all these.
Stamp Duty on Property Transfer
| Property Value | Rate |
|---|---|
| First RM100,000 | 1% |
| RM100,001 – RM500,000 | 2% |
| RM500,001 – RM1,000,000 | 3% |
| Above RM1,000,000 | 4% |
First-home buyers: full stamp duty exemption on properties up to RM500,000 (under various housing initiatives). Loan agreement stamp duty is a flat 0.5% of loan amount.
Common Tax Filing Mistakes
- Missing the deadline. Late filing penalty: 10% of tax due, then 5% per additional month. Always submit by 30 April even with estimated figures — you can amend later.
- Not keeping receipts. LHDN can audit up to 7 years back. Keep digital scans of all relief receipts.
- Forgetting EA Form / EC Form data. Make sure your e-Filing matches the EA form your employer issued.
- Claiming reliefs you don't qualify for. Lifestyle relief requires actual receipted spending — don't claim the full RM2,500 if you only spent RM1,200.
- Ignoring foreign-sourced income changes. From YA 2022, Malaysian-resident individuals are taxed on foreign-sourced income remitted to Malaysia (with various exemptions until 2026). Check current rules before remitting.
- Missing PCB reconciliation. If your monthly PCB (employer deduction) was higher than your final tax, you're owed a refund. File even if PCB seems correct.
Important: Tax laws change every Budget. The calculator above reflects YA 2025/2026 rules per LHDN's published brackets and reliefs. For complex situations (multiple income sources, foreign income, business income, capital allowances), consult a registered tax agent. See our full disclaimer.