Filing income tax in Malaysia is not optional if you earn above the threshold — and "my company already does PCB" is not a valid reason to skip it. PCB (Potongan Cukai Bulanan, also called MTD — Monthly Tax Deduction) is an estimate your employer deducts from your salary each month. It is not your final tax bill. The annual e-Filing return is where the actual calculation happens, and the difference between what you've paid via PCB and what you actually owe (or are owed back) gets settled.
This guide walks through who needs to file, what the current tax brackets look like, which reliefs most employees miss, and how the e-Filing process works from start to finish.
Want to know what you will owe before you file? Estimate it with the income tax calculator for Malaysia, and check the monthly PCB your employer should be deducting with the salary and PCB calculator.
Last updated 11 October 2026 · money.com.my Editorial
Who needs to file income tax in Malaysia?
Any individual whose annual employment income exceeds RM34,000 (after EPF deduction) is required to file an income tax return with LHDN (Lembaga Hasil Dalam Negeri Malaysia — the Inland Revenue Board).
This applies even if:
- Your employer already deducts PCB every month
- You had no additional income beyond your salary
- You expect a refund, not a bill
The filing requirement is based on gross income exceeding the threshold — not on whether you owe additional tax.
Key deadlines:
| Form | Who Files It | Deadline |
|---|---|---|
| Form BE | Employees (employment income only) | 30 April |
| Form B | Individuals with business income | 30 June |
| Form e-BE / e-B | Electronic filing (same forms, filed via mytax.hasil.gov.my) | Same due dates, plus LHDN's 15-day e-Filing grace: 15 May (e-BE) and 15 July (e-B); 15 May 2026 and 15 July 2026 for YA2025 |
An e-Filed return received within the 15-day grace is treated as received on time, and the grace also covers paying any balance of tax (source: LHDN, Return Form Filing Programme for the Year 2026).
If you have only employment income, you file Form BE (or e-BE online). If you run a sole proprietorship or have business income alongside your salary, you file Form B.
What are the income tax rates for YA2025?
Malaysia uses a progressive tax system. This means your income is taxed in layers — each layer at a higher rate. Your first RM5,000 of chargeable income is always tax-free, regardless of how much you earn in total.
| Chargeable Income (RM) | Rate | Tax on Band (RM) | Cumulative Tax (RM) |
|---|---|---|---|
| 0 – 5,000 | 0% | 0 | 0 |
| 5,001 – 20,000 | 1% | 150 | 150 |
| 20,001 – 35,000 | 3% | 450 | 600 |
| 35,001 – 50,000 | 6% | 900 | 1,500 |
| 50,001 – 70,000 | 11% | 2,200 | 3,700 |
| 70,001 – 100,000 | 19% | 5,700 | 9,400 |
| 100,001 – 400,000 | 25% | 75,000 | 84,400 |
| 400,001 – 600,000 | 26% | 52,000 | 136,400 |
| 600,001 – 2,000,000 | 28% | 392,000 | 528,400 |
| Above 2,000,000 | 30% | — | — |
Worked example: An employee with a chargeable income of RM72,000 (after reliefs) does not pay 19% on the entire amount. They pay 0% on the first RM5,000, 1% on the next RM15,000, 3% on the next RM15,000, 6% on the next RM15,000, 11% on the next RM20,000, and 19% on the final RM2,000. Total tax: RM3,700 + RM380 = RM4,080 — an effective rate of about 5.7%.
Understanding marginal rates matters because it changes how you think about reliefs. Every RM1,000 of relief you claim reduces your chargeable income at your top marginal rate. If your top bracket is 19%, a full RM4,000 medical or education insurance relief (the YA2025 cap) saves you RM760 in actual tax.
Which tax reliefs can most employees claim?
Reliefs reduce your chargeable income before the tax brackets are applied. These are the ones most commonly used by salaried employees:
| Relief | Maximum (RM), YA2025 | Notes |
|---|---|---|
| Individual | 9,000 | Automatic — everyone gets this |
| EPF (mandatory + voluntary) | 4,000 | Includes employee's share; employer's share does not count |
| Life insurance / takaful premiums | 3,000 | Policy on your own life, your spouse's life or your joint lives (not a child's life) |
| Medical & education insurance / takaful | 4,000 | Separate from life insurance — claim both if you have both. It was RM3,000 for YA2023–24 |
| Education fees (self) | 7,000 | Approved courses: degree, masters, professional qualifications |
| Lifestyle | 2,500 | Books, magazines, newspapers, internet subscription, computer, smartphone or tablet, skill courses |
| Sports (additional lifestyle relief) | 1,000 | Sports equipment, facility rental, competition fees, gym membership — separate from the RM2,500 |
| SSPN (net deposit) | 8,000 | PTPTN education savings for children |
| Medical expenses (parents) | 8,000 | Must have medical certification from registered practitioner |
| Child relief | 2,000 – 8,000 | RM2,000 per child (under 18). RM8,000 per child in tertiary education |
| Disabled individual | 7,000 | Additional relief if you are a registered OKU (it was RM6,000 for YA2024) |
The individual relief of RM9,000 is applied automatically. Everything else requires you to declare it during e-Filing and keep supporting documents.
The 7-year rule: LHDN can audit your return going back 7 years. Keep receipts for everything you claim — insurance premium confirmations, lifestyle purchase invoices, medical bills, SSPN statements. A shoebox of receipts is fine. A folder on Google Drive is better.
How do you file via e-Filing, step by step?
Step 1 — Register and Log In
Go to mytax.hasil.gov.my. If this is your first time, you need to register for a tax identification number (TIN). You will need your MyKad (IC) number and a Malaysian phone number for OTP verification.
If you already have a tax file but have never used the online system, you can register for e-Filing access at the same portal. The first-time setup takes 5–10 minutes.
Step 2 — Select the Correct Form
After logging in, navigate to e-Filing and select e-BE (for employment income only) or e-B (if you have business/freelance income). Most salaried employees with no side business will use e-BE.
Step 3 — Verify Pre-Filled Employment Income
For employees, LHDN pre-fills your employment income based on the EA form your employer submitted. Cross-check this against your actual EA form — the one your employer gave you by end of February. If the figures don't match, use the EA form figures and flag the discrepancy. Common mismatches occur when you changed jobs mid-year or received late bonuses.
Step 4 — Enter Deductions and Reliefs
This is where most of the actual work happens. Go through each relief category and enter the amounts you're claiming. Have your documents ready:
- EPF statement from i-Akaun (kwsp.gov.my)
- Insurance/takaful premium statements
- Medical receipts for parents
- SSPN annual statement
- Lifestyle receipts (books, gym, internet bills, gadgets)
The system walks you through each category. Enter the actual amount spent, up to the maximum allowed for each relief.
Step 5 — Review the Tax Computation
The system calculates your total chargeable income (gross income minus reliefs), applies the tax brackets, and shows your tax payable. It then compares this against the total PCB your employer already deducted throughout the year.
Step 6 — Submit and Check Your Balance
- If tax payable > PCB paid: You owe LHDN the difference. Payment can be made online via FPX or at LHDN counter.
- If PCB paid > tax payable: You are entitled to a refund. LHDN will credit your bank account directly.
After submitting, you will receive an acknowledgement with a reference number. Save or print this.
Which filing mistakes cost you money?
1. Not filing because "PCB is already deducted." PCB is a monthly estimate. It does not account for your full set of reliefs, your spouse's income situation, or any changes during the year. Many employees are entitled to refunds they never claim because they assume PCB settled everything.
2. Missing the deadline. Late filing is an offence under section 112 of the Income Tax Act 1967 (see below), and tax paid late is increased by 10% under section 103(3). If you cannot file by 30 April, file anyway — a late return with correct figures is better than no return at all.
Warning
Late filing and late payment are treated separately.
Failing to furnish a return falls under section 112 of the Income Tax Act 1967: a fine of RM200 to RM20,000, imprisonment of up to 6 months, or both (section 112(1)); if LHDN does not prosecute, it may instead require a penalty equal to treble the tax payable for that year (section 112(3)). Separately, tax not paid by the due date is increased by 10% of the amount unpaid under section 103(3). Returns furnished through e-Filing get a 15-day grace period, which also covers paying the balance (see our e-Filing guide).
3. Not claiming reliefs you qualify for. The lifestyle relief (RM2,500) is the most commonly missed. If you bought a phone, paid for internet, or bought books, you likely have claims you're leaving on the table; a gym membership counts too, under the separate RM1,000 sports relief. At a 19% marginal rate, the full RM2,500 lifestyle relief is worth RM475 in real money.
4. Filing jointly vs separately without checking. Married couples can file jointly or separately. The right choice depends on both incomes and which partner claims child relief. There is no universal answer — run the numbers both ways before deciding.
5. Forgetting to declare side income. Freelance work, rental income, and dividends from non-exempt sources are all taxable. If LHDN discovers undeclared income during an audit, the penalties are significantly steeper than if you had declared it upfront.
Will you owe tax or get a refund?
You are likely to owe additional tax if:
- You earned significant non-employment income (rental, freelance, consulting) that had no PCB deducted
- You changed jobs mid-year and your new employer's PCB calculation didn't account for prior earnings
- Your employer under-deducted PCB (common with variable commissions and bonuses)
You are likely to get a refund if:
- You have substantial reliefs — multiple children, education fees, insurance premiums, SSPN
- Your employer over-deducted PCB (common when PCB is calculated on gross salary without accounting for reliefs)
- You were on unpaid leave for part of the year but PCB was based on full-year projections
Refund timeline: LHDN aims to process refunds within 30 working days for e-Filing returns with no issues. In practice, expect 30–90 working days. Refunds go directly to the bank account linked to your LHDN profile — make sure your bank details are current in the mytax system.
What documents do you need before you start?
Gather these before sitting down to file. Having everything ready turns a 2-hour process into a 20-minute one.
| Document | Where to Get It | Notes |
|---|---|---|
| EA form | From your employer (due by end of February) | Shows total salary, allowances, bonuses, EPF, PCB |
| EPF statement | i-Akaun at kwsp.gov.my | Annual contribution statement |
| Insurance/takaful statements | Your insurer or agent | Annual premium confirmation letter |
| Medical receipts | Clinics, hospitals | For parents' medical relief — need doctor's certification |
| SSPN statement | PTPTN | Annual net deposit statement for education savings |
| Rental income records | Your own records | Rental agreements, receipts, expenses for deduction |
| Bank interest statements | Your bank | Most Malaysian savings interest is exempt under Schedule 6, but verify for fixed deposit and foreign interest |
| Lifestyle receipts | Your purchases | Books, internet bills, gym, computer/phone receipts |
How much can missed reliefs cost you?
The e-Filing system at mytax.hasil.gov.my is functional if not elegant. Most employees can complete their return in under 30 minutes once they have their documents ready. The system guides you through each section and pre-fills employment data where available.
The real cost of not filing — or filing carelessly — is not only the penalty. It is the reliefs you never claim. An employee earning RM72,000 with full EPF, lifestyle, and medical insurance reliefs can reduce their chargeable income by RM19,500 (RM9,000 individual + RM4,000 EPF + RM2,500 lifestyle + RM4,000 medical or education insurance, YA2025 caps). That takes chargeable income from RM72,000 to RM52,500, and tax from RM4,080 to RM1,775 — a saving of RM2,305. Every year.
If your EPF contributions are your largest relief, make sure you understand how the account structure affects your withdrawal options. And if you are building savings beyond EPF, our guide to saving money in Malaysia covers the vehicles that make mathematical sense for different income levels.
Related Guides
- EPF Complete Guide 2026 — Account 1, 2 & 3 Explained — understand your EPF contributions, dividends, and how voluntary top-ups affect your tax relief
- How to Save Money in Malaysia — A Practical 2026 Guide — the ranked savings plan for Malaysians after tax obligations are handled
- How Bonuses Are Taxed in Malaysia — Complete Guide 2026 — how your annual bonus is taxed, PCB calculation, and strategies to reduce the tax hit
- Medical Tax Relief Malaysia 2026 — Parents, Insurance, Serious Illness — the full breakdown of medical-related reliefs you can claim in your tax return
- SST in Malaysia Explained — the consumption tax you pay in prices and bills, not on your return
Amendment, 10 October 2026. The reliefs in this guide were checked against LHDN's YA2025 relief table (return filed in 2026; hasil.gov.my/en/individu/pelepasan-cukai/, last updated 26 June 2026). Medical and education insurance is RM4,000 for YA2025 (RM3,000 for YA2023 and YA2024), so the worked tax saving is now RM760 at 19%, not RM570 on RM3,000. Sports equipment and gym membership are not part of the RM2,500 lifestyle relief; they are a separate additional relief of RM1,000. Disabled individual is RM7,000, not RM6,000. The closing example was recalculated: RM9,000 + RM4,000 + RM2,500 + RM4,000 = RM19,500 of reliefs takes RM72,000 to RM52,500 chargeable income, and tax from RM4,080 to RM1,775, a saving of RM2,305 (the old "over RM3,500 at 19%" was wrong because the saving crosses the 19% and 11% bands). The FAQ line that serious-disease relief is "separate from the RM1,000 dental/optical relief" was wrong: dental examination and treatment is a RM1,000 sub-limit inside the RM10,000, and LHDN's table has no optical relief. Still outstanding: the other worked examples in this guide were not re-checked beyond the band arithmetic.
Amendment, 11 October 2026. Structural change only: a short answer was added at the top, section headings were rewritten as the questions they answer, and one question was added to the FAQ from this guide's own text. No figure, rule or source was changed. Every figure in the short answer already appears in the body of this guide, and nothing listed above as still outstanding is used in it.
Amendment, 11 October 2026. The Key Deadlines table said e-Filing (Form e-BE / e-B) had the "Same deadlines" as paper forms. LHDN's Return Form (RF) Filing Programme for the Year 2026 (hasil.gov.my/wp-content/uploads/rf-filing-programme-for-2026.pdf) gives a 15-day grace for returns furnished through e-Filing, which also covers payment of the balance of tax: 15 May for e-BE and 15 July for e-B (15 May 2026 and 15 July 2026 for YA2025). The table now says so. The statutory due dates of 30 April and 30 June are unchanged.
Amendment, 11 October 2026 (life insurance). Checked against the Income Tax Act 1967 s49(3) (LHDN's consolidation as at 21 May 2024) and LHDN's YA2025 relief table, item 17(2), by two agents (evidence: reliefs-ya2025/evidence-A.md and evidence-B.md). The guide said "Policies on your own life" → a policy on your own life, your spouse's life or your joint lives; a child's life does not qualify. Family takaful contributions also qualify under item 17(2). The RM3,000 cap is unchanged.
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Every guide on money.com.my is fact-checked against primary sources (LHDN, Bank Negara Malaysia, Gazette Orders) before publication. If you find an error, email corrections@money.com.my — corrections are published with a dated amendment note.
Amendment, 11 October 2026 (late filing). This guide said late filing carries a "10% increase on the tax payable" (example: RM2,000 becomes RM2,200). That 10% is the late-payment increase under section 103(3) of the Income Tax Act 1967, on tax unpaid by the due date. Late filing falls under section 112: a fine of RM200 to RM20,000, imprisonment of up to 6 months, or both, or instead a penalty of treble the tax payable (section 112(3)), as LHDN's Return Form Filing Programme for 2026 cites. Checked against the Act and LHDN's programme by two agents (same check as our e-Filing guide's amendment of this date).