How to Calculate PCB (Monthly Tax Deduction) in Malaysia?
By LHDN Payroll Architect2 min read • 262 wordsLast Updated: June 2026
Calculating PCB can seem like a daunting challenge due to the complex computerized formula mandated by the Inland Revenue Board of Malaysia (LHDN). However, standardizing your understanding around the underlying localized rules makes it transparent. This handbook breaks down the step-by-step logic of how PCB is calculated in Malaysia, illustrating the crucial mathematical steps using simple annualized examples.
Please Note: This calculator provides an estimate only and is not an official LHDN ( Hasil ), KWSP or PERKESO statutory submission tool. Actual PCB, EPF, SOCSO and EIS amounts may vary depending on employee status, residency, tax relief eligibility, rebates (e.g. spouse/children declarations), TP1/TP3 information, prior employment records within the year, and official updates. Please verify calculation figures against official LHDN portal, KWSP booklets, PERKESO schedules, or consult with a certified payroll/tax compliance specialist.
The Annualized Formula Principle
LHDN uses an annualized simulation for PCB calculations. The current month's taxable income is multiplied by 12 to simulate a full year's earnings. Then, standard statutory deductions (like the compulsory Employee EPF contributions capped at RM4,000, and standard personal relief of RM9,000) are subtracted to compute an estimated Chargeable Income. This number is matched against Malaysian progressive tax brackets to determine annual tax liability, which is subsequently divided by 12 to get the base monthly PCB.
Key Inputs Required for PCB Calculations
To evaluate PCB accurately, the system requires several vital parameters: Monthly Gross Salary, Month of Deduction, cumulative taxable salary from prior employments (represented in TP3 forms), personal tax reliefs (lifestyle, medical, child allowances submitted via TP1 forms), and statutory EPF contributions. Ensuring these inputs are updated prevents over-deductions.
Practical PCB Calculation Example
Let's say you earn RM6,000 a month with an EPF contribution of 11% (RM660/month). Your annual simulated income is RM72,000. Your simulated annual EPF deduction is RM7,920, which gets capped at the maximum EPF relief of RM4,000. Combined with the default personal relief of RM9,000, your total simulated reliefs are RM13,000. Your Chargeable Income becomes RM59,000. Checking the tax brackets, a chargeable income of RM59,000 carries an annual tax of RM2,490. Divided by 12, the estimated monthly PCB is RM207.50.
Frequently Asked Questions (FAQs)
Yes. Bonuses are taxed using a separate additional formula (Formula PCB Tambahan) which evaluates your simulated tax with and without the bonus, deducting the total extra tax cumulative impact in the month the bonus is paid.
Related Calculators & Worksheets
Verified Official Government Sources
We encourage you to audit and verify your tax/salary breakdowns against the latest official Malaysian government directives and statutory booklets:
LHDN / HASiL (Inland Revenue Board)
Official agency governing personal income tax e-Filing, CP39, and PCB computerized policies.
KWSP / EPF (Employees Provident Fund)
Mandatory retirement savings schema, interest rates, and Form 17A contribution policies.
PERKESO / SOCSO (Social Security)
Disability schemas, table schedules, and standard employer/employee Category 1/2 rates.
PERKESO EIS / SIP (Employment Insurance)
Job loss safety plans, application process, and 0.2% rate policies.
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