Malaysia Personal Income Tax Rate
Rising Global Consultants
Progressive tax rates apply to the taxable income of individual taxpayers. For resident individuals, taxable income ranges from 0% (for the first RM5,000) to a maximum of 30% (for taxable income exceeding RM2,000,000) starting from the 2020 tax year. Non-resident individuals are taxed at a fixed rate of 30%, effective from the 2020 tax year. Different rates may apply to specific types of income, such as interest or royalty income.
Personal Income Tax Information
| 2022 tax year | 2023 tax year and onwards | |||
| Taxable income | Income tax rate (%) | Total Taxable Amount (RM) | Income tax rate (%) | Total Taxable Amount (RM) |
| In RM5,000 The next RM5,000 | 0 1 | 0 50 | 0 1 | 0 50 |
| In RM10,000 The next RM10,000 | – 1 | 50 100 | – 1 | 50 100 |
| In RM20,000 The next RM15,000 | – 3 | 150 450 | – 3 | 150 450 |
| In RM35,000 The next RM15,000 | – 8 | 600 1,200 | – 6 | 600 900 |
| In RM50,000 The next RM20,000 | – 13 | 1,800 2,600 | – 11 | 1,500 2,200 |
| In RM70,000 The next RM30,000 | – 21 | 4,400 6,300 | – 19 | 3,700 5,700 |
| In RM100,000 The next RM50,000 | – 24 | 10,700 12,000 | – 25 | 9,400 12,500 |
| In RM150,000 The next RM100,000 | – 24 | 22,700 24,000 | – 25 | 21,900 25,000 |
| In RM250,000 The next RM150,000 | – 24.5 | 46,700 36,750 | – 25 | 46,900 37,500 |
| In RM400,000 The next RM200,000 | – 25 | 83,450 50,000 | – 26 | 84,400 52,000 |
| In RM600,000 The next RM400,000 | – 26 | 133,450 104,000 | – 28 | 136,400 112,000 |
| In RM1,000,000 The next RM1,000,000 | – 28 | 237,450 280,000 | – 28 | 248,400 280,000 |
In RM2,000,000 | – 30 | 517,450 – | – 30 | 528,400 ————— |
Starting from the 2010 tax year, the employment income of knowledge workers residing in Iskandar, Malaysia, and working in qualified activities will be taxed at 15% of their taxable income. The Malaysian Inland Revenue Board has clarified that eligible individuals can opt for the 15% tax rate by indicating the option on their tax return. Otherwise, taxpayers will be taxed proportionately.
The Income Tax (Confirmation of Knowledge Workers, Qualified Activities, and Specific Areas) Regulations 2010 were issued on September 29, 2010.
These regulations apply to qualified persons approved by the Minister of Finance (from October 24, 2009, but not later than December 31, 2020). With this approval, the employment income received from the designated company will be taxed at a preferential rate of 15% from January 1, 2010.
The decree defines the following items:
(i) Qualified persons
(ii) Designated companies
(iii) Knowledge workers, qualified activities, and specific areas
The specific areas in the Iskandar Development Region are:
(i) Nusajaya
(ii) Western Development Zone
(iii) Johor Bahru Central Business District
(iv) Eastern Development Zone
(v) Kulai – Senai
To encourage skilled Malaysian professionals to return and boost Malaysia’s economic growth, under the Returning Expert Program (REP), eligible individuals’ employment income will be taxed at a fixed rate of 15% for a period of 5 years, starting from the 2012 tax year.
A gazette order was issued on May 24, 2012, known as the Income Tax (Confirmation of Qualified Persons under the Talent Corporation Malaysia Berhad and Specific Tax Years) Regulations 2012 [PU(A) 151], to determine the taxable income of “designated individuals” according to the Income Tax Act.
“Designated individuals” are defined as:
(a) Persons whose application under the Returning Expert Program has been approved by the Minister of Finance;
(b) Their employment income comes from employment with persons residing in Malaysia; and
(c) Their employment starts on or after May 1, 2011.
Further terms and conditions of the Returning Expert Program (REP) can also be found on the Talent Corporation Malaysia Berhad website.
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