There are two methods to calculate tax in Malaysia. Don’t worry! This guide will walk you through both methods, ensuring you understand and can accurately apply each one.

Computerized calculation will be based on the LHDN PCB calculator. This calculation method considers the employee's taxable income, EPF contributions, marital status, and dependent children for the year. Follow the steps below to use the LHDN PCB calculator for accurate tax calculations.

• The first month of income in the current year, typically in January.
• For new joiners who started mid-year without previous previous employment income recorded. 

In PCB calculator, you may key in the following details:

Once done, click "CALCULATE".

PREVIOUSLY EMPLOYED IN CURRENT YEAR

Select "Previously Employed in Current Year" for employee with accumulated income prior to the current payslip of the same year. This calculation can be applied if the employee has received a salary in previous months of the current year.

Example: 

• Payroll: March
• Marital status: Married and spouse is working
• Children: Under 18 or in education (100%)

Input the following details in the calculator: 

Previous months income prior to March:

• Year-to-date taxable income from January to February: 11000.00
• Total EPF from January to February: 1210.00
• Total MTD from January to February: 321.70

This data can be found in the staff tax details. Refer to the guide on how to access it. 

Tax Details: Employee MTD and Income Info (in MYR)

Tax Details: Employee Deduction Info (in MYR)

Copy the accumulated income above and input it under ACCUMULATED REMUNERATION section in the calculator. 

March payroll details:

• Taxable income: 5500.00
• EPF: 605.00

Copy the current month income above and input under CURRENT MONTH'S REMUNERATION section. 

Once completed, click "CALCULATE". 

Non-computerized calculation

Non-computerized calculation is based on the PCB table. This method does not require the employee's previous income; it will only calculate based on the current month's payroll.

• Taxable income: 5500.00
• EPF: 605.00 (maximum 333.333333 per month)
• Marital status: Married and spouse is working
• Children: Under 18 or in education (100%)

Based on the employee status, the employee is under category 2, KA1. The calculation is: 5500.00 - 333.333333 = 5166.67

In the table, the staff PCB will be 162.15.

Additional guidelines: 

• What is the difference between computerized and non-computerized calculation method?
• Normal Remuneration vs. Additional Remuneration
• How to set Monthly Tax Deduction calculation method?
• How to input employee's previous employment income?
• How do I key in my backdated payroll?