Malaysia Income Tax Guide 2026: Complete Salary Breakdown

Malaysia's income tax system uses progressive tax brackets, meaning higher earners pay higher rates. This comprehensive guide covers everything you need to know about Malaysian income tax for 2026.

Quick Summary (TL;DR)

Key Points for 2026:

• Tax-free threshold: RM5,000 annually
• Progressive rates: 0% to 30%
• Standard deduction: RM9,000
• EPF contribution: 11% (employee) + 12% (employer)
• SOCSO & EIS: Mandatory for employees

Tax Brackets for 2026

Malaysia's tax brackets for resident individuals in 2026:

Income Range (MYR)	Tax Rate
0 - 5,000	0%
5,001 - 20,000	1%
20,001 - 35,000	3%
35,001 - 50,000	8%
50,001 - 70,000	13%
70,001 - 100,000	21%
100,001 - 150,000	24%
150,001 - 400,000	24.5%
400,001 - 600,000	25%
600,001 - 2,000,000	28%
Above 2,000,000	30%

Personal Relief and Deductions

Standard Personal Relief

• Individual: MYR 9,000
• Disabled individual: MYR 6,000 additional

Common Deductions

• EPF contributions: 11% of salary
• SOCSO contributions: 0.5% of salary (up to MYR 69.70/month)
• EIS contributions: 0.2% of salary (up to MYR 19.75/month)

Salary Examples

Example 1: MYR 50,000 Annual Salary

Gross Income: MYR 50,000 Personal Relief: MYR 9,000 Taxable Income: MYR 41,000

Tax Calculation:

• First MYR 5,000: MYR 0 (0%)
• Next MYR 15,000: MYR 150 (1%)
• Next MYR 15,000: MYR 450 (3%)
• Next MYR 6,000: MYR 480 (8%)

Total Tax: MYR 1,080 Take-home (before EPF/SOCSO): MYR 48,920

Example 2: MYR 100,000 Annual Salary

Gross Income: MYR 100,000 Personal Relief: MYR 9,000 Taxable Income: MYR 91,000

Tax Calculation:

• First MYR 5,000: MYR 0 (0%)
• Next MYR 15,000: MYR 150 (1%)
• Next MYR 15,000: MYR 450 (3%)
• Next MYR 15,000: MYR 1,200 (8%)
• Next MYR 20,000: MYR 2,600 (13%)
• Next MYR 21,000: MYR 4,410 (21%)

Total Tax: MYR 8,810 Take-home (before EPF/SOCSO): MYR 91,190

Tax Filing Deadlines

• Individual (Form BE): April 30, 2026 (for 2025 income)
• Individual (Form B): June 30, 2026 (if filing online)

Tips to Reduce Your Tax

1. Maximize deductions: Contribute to EPF, purchase life insurance
2. Claim all eligible reliefs: Medical expenses, education fees
3. Consider tax-efficient investments: Unit trusts, bonds
4. Keep proper records: Receipts for all deductible expenses

Frequently Asked Questions

What is the tax-free threshold in Malaysia for 2026?

The tax-free threshold is RM5,000 annually for resident individuals. Income below this amount is not subject to income tax.

How much EPF should I contribute in Malaysia?

The minimum EPF contribution is 11% for employees and 12% for employers. You can voluntarily contribute up to 23% for better retirement savings.

Do I need to pay SOCSO if I earn less than RM4,000?

Yes, SOCSO contributions are mandatory for all employees regardless of salary amount, but the rates vary based on your income level.

When is the deadline for income tax filing in Malaysia 2026?

The deadline is April 30, 2026 for individuals filing Form BE (employment income). For e-filing, the deadline is typically May 15, 2026.

Can I claim tax relief for insurance premiums?

Yes, you can claim up to RM3,000 for life insurance premiums and medical insurance premiums as tax relief.

Step-by-Step: How to Calculate Your Malaysia Tax

Step 1: Determine Your Annual Income

Add up all sources of employment income for the year.

Step 2: Apply Standard Deductions

Subtract RM9,000 (standard personal relief) from your annual income.

Step 3: Calculate Tax Using Brackets

Apply the progressive tax rates to your taxable income using the brackets above.

Step 4: Add Statutory Deductions

Calculate EPF (11%), SOCSO (0.5%), and EIS (0.2%) contributions.

Step 5: Calculate Take-Home Pay

Subtract total tax and statutory contributions from gross income.

Conclusion

Understanding Malaysia's tax system helps you plan your finances better. Use our Malaysia Tax Calculator to get exact calculations for your salary and explore different scenarios.

Disclaimer: This information is for educational purposes. Tax laws may change. Consult a tax professional for personalized advice.