Tax Rates In Malaysia
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 taxpayer in Malaysia is categorised according to their chargeable income. Based on this, you are put into a tax income band (tax bracket) 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.
Tax rates 2026 (YA 2025)
Based on your chargeable income for 2025, we can calculate how much tax you will be paying for last year’s assessment.
Here are the progressive income tax rates for tax filing in 2026 (YA 2025).
| Category | Chargeable Income | Calculations (RM) | Rate % | Tax (RM) |
|---|---|---|---|---|
| A | 0 - 5,000 | On the First 5,000 | 0 | 0 |
| B | 5,001 - 20,000 | On the First 5,000 Next 15,000 | 1 | 0 150 |
| C | 20,001 - 35,000 | On the First 20,000 Next 15,000 | 3 | 150 450 |
| D | 35,001 - 50,000 | On the First 35,000 Next 15,000 | 6 | 600 900 |
| E | 50,001 - 70,000 | On the First 50,000 Next 20,000 | 11 | 1,500 2,200 |
| F | 70,001 - 100,000 | On the First 70,000 Next 30,000 | 19 | 3,700 5,700 |
| G | 100,001 - 400,000 | On the First 100,000 Next 300,000 | 25 | 9,400 75,000 |
| H | 400,001 - 600,000 | On the First 400,000 Next 200,000 | 26 | 84,400 52,000 |
| I | 600,001 - 2,000,000 | On the First 600,000 Next 1,400,000 | 28 | 136,400 392,000 |
| J | Exceeding 2,000,000 | On the First 2,000,000 Next ringgit | 30 | 528,400 |
Source: LHDN
How do you calculate your income tax rate?
Here’s an example of how to calculate your tax based on the personal income tax rate above:
Chargeable income: RM65,850
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.
