Malaysia Income Tax Brackets: What Your Actual Tax Rate Is After Reliefs
Edited by Teh Kim Guan, ACMA, CGMA · Updated 2026-06-24
Your income tax bracket tells you the rate on the last ringgit you earn, not the rate on everything you earn. Most Malaysians who see a 19% or 25% bracket rate are relieved to discover their actual (effective) tax bill is a fraction of that, once reliefs reduce their chargeable income. This guide walks through Malaysia’s income tax brackets for Assessment Year (YA) 2024, explains the difference between marginal and effective rates, and shows three worked examples at different salary levels.
The income tax brackets for YA 2024
Malaysia uses a progressive tax system. The rates below apply to chargeable income, which is your total income minus allowable deductions and personal reliefs. These rates are unchanged from YA 2023 for most brackets, with the top two tiers applying to very high earners. (Source: LHDN Tax Rate page)
| Chargeable Income (RM) | Tax Rate | Tax on This Band |
|---|---|---|
| 0 to 5,000 | 0% | RM 0 |
| 5,001 to 20,000 | 1% | RM 150 |
| 20,001 to 35,000 | 3% | RM 450 |
| 35,001 to 50,000 | 6% | RM 900 |
| 50,001 to 70,000 | 11% | RM 2,200 |
| 70,001 to 100,000 | 19% | RM 5,700 |
| 100,001 to 400,000 | 25% | RM 75,000 |
| 400,001 to 600,000 | 26% | RM 52,000 |
| 600,001 to 2,000,000 | 28% | RM 392,000 |
| Above 2,000,000 | 30% | On the excess |
The highest marginal rate of 30% was introduced for ultra-high earners (above RM 2 million chargeable income) from YA 2023 onwards.
Marginal rate vs effective rate: what the difference means
The marginal rate is the tax rate that applies to the next additional ringgit of income. If your chargeable income is RM 72,000, your marginal rate is 19%, but only the slice of income between RM 70,001 and RM 72,000 is taxed at that rate.
The effective rate is your total tax bill divided by your total chargeable income. Because lower bands are taxed at lower rates, your effective rate is always lower than your marginal rate, often significantly so.
Here is a quick illustration:
| Chargeable Income | Marginal Rate | Estimated Total Tax | Effective Rate |
|---|---|---|---|
| RM 30,000 | 3% | RM 450 + RM 150 = RM 600 | ~2.0% |
| RM 60,000 | 11% | RM 3,700 | ~6.2% |
| RM 90,000 | 19% | RM 8,950 | ~9.9% |
| RM 150,000 | 25% | RM 21,700 | ~14.5% |
This is why two colleagues with the same gross salary can have very different tax bills: the one who maximises reliefs has a lower chargeable income, a lower marginal bracket, and a much lower effective rate.
What are “reliefs” and how do they reduce your chargeable income?
Reliefs are amounts LHDN allows you to deduct from your aggregate income before tax is calculated. They are not rebates or discounts on your tax bill. They reduce the income that gets taxed, which means each ringgit of relief saves you money at your marginal rate.
Key reliefs for resident individuals in YA 2024 include:
- Self relief: RM 9,000 (automatic for every individual)
- EPF / approved provident fund contributions: up to RM 4,000
- Life insurance premiums and takaful: up to RM 3,000 (combined with EPF limited to RM 7,000 total for self, if EPF relief is claimed separately; check LHDN notes for interaction with the RM 4,000 EPF limit)
- Medical and dental expenses (self, spouse, children): up to RM 10,000 (of which dental is capped at RM 1,000)
- Medical expenses for parents: up to RM 8,000 (includes full medical examination up to RM 1,000 from YA 2024)
- Lifestyle relief (books, gadgets, internet, self-improvement courses): up to RM 2,500
- Additional lifestyle relief for sports equipment and activities: up to RM 500
- Child relief (unmarried child under 18): RM 2,000 per child
- Child relief (child in full-time tertiary education, age 18 and above): RM 8,000 per child
- SOCSO and EIS contributions: claimable amount based on actual contribution
- Education fees (self, recognized institutions): up to RM 7,000
These are the commonly claimed reliefs. LHDN maintains the full list at hasil.gov.my/en/individual/individual-life-cycle/income-declaration/tax-reliefs/.
Three worked examples
The examples below show how a typical salaried Malaysian arrives at their actual tax bill, not the headline marginal rate. All figures are for YA 2024.
Example 1: Junior executive, RM 60,000 gross annual income
Gross employment income: RM 60,000
Reliefs claimed:
- Self: RM 9,000
- EPF (11% of RM 60,000, but capped): RM 4,000
- Lifestyle (phone, internet): RM 2,000
- Medical (self): RM 1,000
Total reliefs: RM 16,000
Chargeable income: RM 60,000 minus RM 16,000 = RM 44,000
Tax calculation on RM 44,000:
- 0% on first RM 5,000 = RM 0
- 1% on RM 5,001 to RM 20,000 (RM 15,000) = RM 150
- 3% on RM 20,001 to RM 35,000 (RM 15,000) = RM 450
- 6% on RM 35,001 to RM 44,000 (RM 9,000) = RM 540
Total tax: RM 1,140 Marginal rate: 6%. Effective rate on chargeable income: 2.6%. Effective rate on gross income: 1.9%.
Example 2: Mid-career professional, RM 120,000 gross annual income
Gross employment income: RM 120,000
Reliefs claimed:
- Self: RM 9,000
- EPF (capped): RM 4,000
- Parents medical: RM 4,000
- Child (1 child under 18): RM 2,000
- Lifestyle: RM 2,500
- Medical (self and spouse): RM 3,000
Total reliefs: RM 24,500
Chargeable income: RM 120,000 minus RM 24,500 = RM 95,500
Tax calculation on RM 95,500:
- 0% to RM 5,000 = RM 0
- 1% on RM 15,000 = RM 150
- 3% on RM 15,000 = RM 450
- 6% on RM 15,000 = RM 900
- 11% on RM 20,000 = RM 2,200
- 19% on RM 70,001 to RM 95,500 (RM 25,500) = RM 4,845
Total tax: RM 8,545 Marginal rate: 19%. Effective rate on chargeable income: 8.9%. Effective rate on gross income: 7.1%.
Example 3: Senior manager, RM 240,000 gross annual income
Gross employment income: RM 240,000
Reliefs claimed:
- Self: RM 9,000
- EPF (capped): RM 4,000
- Child (2 children in tertiary education): RM 16,000
- Parents medical: RM 8,000
- Lifestyle: RM 2,500
- Medical (self and spouse): RM 5,000
- Education fees (professional qualification): RM 7,000
Total reliefs: RM 51,500
Chargeable income: RM 240,000 minus RM 51,500 = RM 188,500
Tax calculation on RM 188,500:
- Bands up to RM 100,000: RM 8,950 (as above)
- 25% on RM 100,001 to RM 188,500 (RM 88,500) = RM 22,125
Total tax: RM 31,075 Marginal rate: 25%. Effective rate on chargeable income: 16.5%. Effective rate on gross income: 12.9%.
The RM 400 rebate for lower-income earners
If your chargeable income is RM 35,000 or below, you are entitled to an individual rebate of RM 400, which is deducted directly from your tax payable (not from income). At RM 35,000 chargeable income, the tax before rebate is RM 600. After the rebate, the bill drops to RM 200. This is a rebate, not a relief, so it reduces your actual tax payable ringgit for ringgit.
How PCB (monthly tax deduction) fits in
Most salaried Malaysians have tax deducted monthly through the Potongan Cukai Bulanan (PCB) scheme, administered by LHDN. Your employer uses a schedule to estimate your annual tax liability and spreads the deductions across 12 months. If you claim reliefs correctly through your employer’s payroll system (or via CP38), your end-of-year balance is close to zero. Filing your e-BE or BE return via MyTax confirms the final number.
Key takeaways
- Malaysia’s income tax brackets range from 0% to 30%, but these rates apply only to chargeable income (income after all deductions and reliefs).
- Most salaried Malaysians reduce their taxable income by RM 15,000 to RM 50,000 through reliefs such as self relief, EPF, medical, lifestyle, and child reliefs.
- Your effective rate (total tax divided by chargeable income) is almost always well below your marginal bracket rate.
- A gross income of RM 60,000 can result in an effective tax rate of under 2% with standard reliefs claimed.
- The RM 400 individual rebate wipes out most or all tax for earners with chargeable income below RM 35,000.
- File and verify via MyTax at hasil.gov.my each year to ensure you claim all eligible reliefs.
Frequently asked questions
What is the difference between chargeable income and gross income?
Gross income is everything you earn from employment, freelancing, rental, dividends, and other sources. Chargeable income is what remains after you subtract statutory deductions (like employment expenses) and personal reliefs (self, EPF, medical, children, etc.). Tax is calculated on chargeable income, not gross income.
Am I in the 25% tax bracket if I earn RM 120,000 a year?
Not necessarily. If your gross employment income is RM 120,000 and you claim around RM 24,000 in reliefs, your chargeable income falls to about RM 96,000, which sits in the 19% marginal bracket. Even then, only income above RM 70,000 is taxed at 19%; the earlier slices are taxed at 0%, 1%, 3%, 6%, and 11%.
Do I need to file a tax return if my employer deducts PCB?
Yes, if your total income exceeds the filing threshold (generally RM 34,000 of employment income after EPF deduction for YA 2024). PCB is an advance payment estimate, not a final assessment. Filing confirms your reliefs and triggers any refund owed to you.
What reliefs give the most value per ringgit?
Reliefs are worth more at higher marginal rates. At a 19% marginal rate, every RM 1,000 in relief saves RM 190 in tax. At 25%, the same RM 1,000 saves RM 250. Reliefs with high caps and broad eligibility, such as medical expenses (RM 10,000) and education fees for children (RM 8,000 per child), tend to be the highest-value claims for middle-income earners.
Where can I find the official relief amounts and check for updates?
The authoritative source is the LHDN website at hasil.gov.my. Relief amounts and eligibility conditions can change each year following the annual Budget, so always confirm figures for the relevant YA before filing.
Related guides: Understanding tax-related government bodies in Malaysia | How EPF contributions affect your tax relief
Malaysia-based chartered management accountant (ACMA, CGMA) and embedded executive who has worked across finance, operations, and product roles with Malaysian companies. Every WangWise guide is checked against official Malaysian sources. How we review · About the editor
Educational content only, not financial advice. Verify current figures with official sources.