How to navigate the Malaysian income tax maze (2024 estimates)

Hello everyone in the world!

Remember when your parents told you that "adulting" meant more than just paying the bills?

Well, guess what?

This includes the not-so-fun task of filing income taxes.

But there's no need to worry.

This guide is designed to be your partner in crime. In other words, how to navigate the maze of Malaysian income tax in 2024 (based on 2023 income).

So, do you think you have to pay income tax?

Before we get into it, let's address the elephant in the room.

Do I even need to file a tax return?

Here's a quick overview:

If you live in Malaysia and your annual income after EPF deduction exceeds RM34,000 (which equates to approximately RM2,833.33 per month!), you must register as a taxpayer and file a tax return.

Wait, resident? What does that mean?

Think of it this way.

If you holiday in Malaysia for at least 182 days (not necessarily consecutive!) in a year, you are considered a resident under Malaysian tax law.

So even if you're an alien superstar who just got a job here, you might have to pay taxes if he stays here for more than six months.

Great tax rate announcement!

So how much tax do you actually have to pay?

Malaysia has a progressive tax system, so be careful.

In other words, the more money you earn, the higher the percentage of taxes you pay.

Here's a simplified breakdown (note that these are 2023 tax rates applied to 2024 contributions):

RM0 to 5,000: 0% (Lucky!)

RM5,001 to RM20,000: 1%

RM20,001 to RM35,000: 3%

RM35,001 - RM50,000: 6% (Budget 2023 provided relief to middle-income earners!)

RM50,001 to RM70,000: 11%

RM70,001 to RM100,000: 19%

RM100,001 to RM250,000: 24%

RM250,001 to RM400,000: 25%

RM400,001 to RM600,000: 26%

RM600,001 – RM2,000,000: 28%

Over RM2,000,000: 30%

Wait, is this taxable income or a tax payment?

Calm down!

Don't confuse taxable income with the taxes you actually owe.

Here's the secret formula:

Tax Payable = Taxable Income – Personal Tax Benefits – Tax Allowances – Tax Exemptions

Think of taxable income as your total income after certain deductions (like EPF contributions).

Personal tax allowances, tax credits and tax credits all help reduce the amount of tax you have to pay.

Tax benefits available!

Let's talk about benefits, deductions, and exemptions

These terms may seem confusing, but they're all your allies in reducing your tax burden.

Here's a quick overview:

Tax Benefits: This includes personal expenses like life insurance, his EPF contributions, parents' medical expenses and even purchasing self-help books to eventually rebuild himself and grow. applies to what we all need. Be sure to check out the complete list of approved tax breaks you may be eligible for.

Tax Credit: Similar to a tax credit, but more specific. Please consider donating. You may be able to claim a tax deduction for donations made directly to approved organizations or charities. Good news? You can spread the love and claim royalties to multiple charities.

Tax Free: This is basically a tax-free zone for certain types of income, such as interest earned on term deposits.

Ready to file? Let's do it!

Now that you have this knowledge, filing your tax return will no longer be such a daunting task.

If you are just an adult

Mastering Malaysian Income Tax (2024 Assessment) - Chill Guide Inside!

Feeling lost in the maze of Malaysian income tax? ‍ This guide is your ultimate partner! Discover resident requirements, tax rates, reliefs & deductions in an easy-to-understand way. Don't pay more than you have to! #adulting #taxseason