This post is also available in: Melayu (Malay) 简体中文 (Chinese (Simplified))

Malaysia Personal Income Tax Rate

A graduated scale of rates of tax is applied to chargeable income of resident individual taxpayers, starting from 0% (on the first RM5,000) to a maximum of 30% on chargeable income exceeding RM2,000,000 with effect from YA 2020.

Non-resident individuals pay tax at a flat rate of 30% with effect from YA 2020. Other rates are applicable to special classes of income, eg interest or royalties.

Tax Rate for Resident

	YA 2022		YA 2023 onwards
Chargeable Income	Income Tax Rate (%)	Gross Tax Payable (RM)	Income Tax Rate (%)	Gross Tax Payable (RM)
On RM5,000 Next RM5,000	0 1	0 50	0 1	0 50
On RM10,000 Next RM10,000	– 1	50 100	– 1	50 100
On RM20,000 Next RM15,000	– 3	150 450	– 3	150 450
On RM35,000 Next RM15,000	– 8	600 1,200	– 6	600 900
On RM50,000 Next RM20,000	– 13	1,800 2,600	– 11	1,500 2,200
On RM70,000 Next RM30,000	– 21	4,400 6,300	– 19	3,700 5,700
On RM100,000 Next RM50,000	– 24	10,700 12,000	– 25	9,400 12,500
On RM150,000 Next RM100,000	– 24	22,700 24,000	– 25	21,900 24,000
On RM250,000 Next RM150,000	– 24.5	46,700 36,750	– 25	46,900 37,500
On RM400,000 Next RM200,000	– 25	83,450 50,000	– 26	84,400 52,000
On RM600,000 Next RM400,000	– 26	133,450 104,000	– 26	136,400 112,000
On RM1,000,000 Next RM1,000,000	– 28	237,450 280,000	– 28	248,400 280,000
On RM2,000,000	– 30	517,450 –	– 30	528,400 —————

Several preferential tax incentives are available to specific groups of individuals. Qualified knowledge workers residing in Iskandar Malaysia and employed in qualifying activities are taxed at a preferential rate of 15%. Similarly, knowledge workers, including Malaysian citizens and foreign nationals, residing within the Malaysia-China-Kuantan Industrial Park (MCKIP) in the East Coast Economic Region (ECER) and employed by designated companies are also taxed at 15%.

Under the Returning Expert Programme (REP), approved individuals are taxed at a flat rate of 15% on employment income for a period of 5 years. This incentive aims to encourage Malaysian professionals abroad to return and contribute to the nation’s economy.
Additionally, non-citizen professionals holding C-suite or key positions in companies relocating to Malaysia under approved schemes are taxed at a flat rate of 15%, provided they earn a monthly salary of RM25,000 or more, hold the position for at least 5 consecutive years, and maintain tax residency in Malaysia during the incentive period.
These targeted incentives demonstrate Malaysia’s commitment to attracting talent, promoting regional development, and stimulating foreign investment to drive economic growth.

Dividend Tax on Individual Shareholders

Starting from 1 January 2025, a 2% dividend tax will be imposed on individual shareholders, both residents and non-residents, including individuals holding shares through nominees. This tax applies to chargeable dividend income.However, only individual shareholders with annual dividend income exceeding RM100,000 will be subject to this 2% dividend tax.

Dealing with tax is not an easy thing without the expert’s advice and assistance. Feel free to contact us if you are unsure of how to file your personal income tax.