Chapter 5

Tax Rate: Find Out Which Taxable Income Band You Are In

Malaysia income tax rate

Malaysia practices a progressive rate income tax. This means that your income is not taxed as a whole, but rather different amounts are taxed at different rates. This ranges from 0% to 30% at the highest income band. What this means is that every tax payer in Malaysia is categorised according to their chargeable incomes. Based on this, you are put into a tax income band to pay a certain tax rate.

The Inland Revenue Board (LHDN) revised the income bands above RM100,000 per year starting from the Year of Assessment 2023 in accordance with new tax rates.

This was to reduce the income tax on middle income earners, while increasing taxation on the highest earners.

How much income tax you pay depends on your tax rate

Based on your chargeable income for 2023, we can calculate how much tax you will be paying for last year’s assessment.

Here are the progressive income tax rates for the Year of Assessment 2023 [for tax filing in 2024]:

Chargeable IncomeCalculations (RM)Rate %Tax(RM)
0 - 5,000On the First 2,50000
5,001 - 20,000On the First 5,00010
Next 15,000150
20,001 - 35,000On the First 20,0003150
Next 15,000450
35,001 - 50,000On the First 35,0006600
Next 15,000900
50,001 - 70,000On the First 50,000111,500
Next 20,0002,200
70,001 - 100,000On the First 70,000193,700
Next 30,0005,700
100,001 - 250,000On the First 100,000259,400
Next 300,00075,000
250,001 - 400,000On the First 400,0002684,400
Next 200,00052,000
400,001 - 600,000On the First 600,00028136,400
Next 1,400,000392,000
Exceeding 2,000,000On the First 2,000,00030528,400
Next ringgit---

Source: LHDN

Compare all the options available to find your best

How do you calculate your income tax rate?

Here’s an example on how to calculate your tax based on the personal income tax rate above:

Chargeable income: RM65,850

First RM5,000
Next RM15,000
Next RM15,000
Next RM15,000
Next RM15,850
Total chargeable income: RM65,850
Total tax: RM3,243.50

You can calculate your taxes based on the formula above, and just make sure your total income in the first column comes up to your total chargeable income.

iMoney income tax calculator

Too much math for you?
Go on to the Malaysia income tax calculator to calculate how much tax you will have to pay!

‹ Previous Next: Here's How A Tax Rebate Can Help You Reduce Your Tax Further

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