11 tax brackets from 0% to 30%
Malaysia's hidden benefit: incredibly low effective rates. A RM 100,000 earner pays just ~RM 8,000 income tax (~8%). No capital gains tax on stocks/crypto. EPF is 11% employee but it's YOUR retirement savings. Foreign income remitted now taxable (since 2022) but many exemptions apply. Generous tax reliefs: lifestyle RM 2,500, medical RM 10,000, education RM 7,000.
Malaysia has one of Asia's most attractive tax regimes: 11 brackets from 0% to 30% with very low effective rates. The first RM 5,000 is tax-free, and rates rise gradually—a RM 100,000 earner (~$21,500) pays just ~RM 8,000 (~8%). No capital gains tax except on real estate sold within 5 years. EPF (Employees Provident Fund) contributions are 11% employee + 12-13% employer—but these are retirement savings you keep, not tax. Generous tax reliefs exist: lifestyle (RM 2,500), medical (RM 10,000), education (RM 7,000), and parents (RM 5,000). Malaysia taxed only domestic income until 2022; now foreign income remitted is taxable (with exemptions). MM2H program offers residency but with stricter 2024 requirements. Filing deadline is April 30. Use our calculator to estimate your Malaysian tax liability.
| Taxable Income | Tax Rate |
|---|---|
| RM 0 - RM 5,000 | 0% |
| RM 5,000 - RM 20,000 | 1% |
| RM 20,000 - RM 35,000 | 3% |
| RM 35,000 - RM 50,000 | 6% |
| RM 50,000 - RM 70,000 | 11% |
| RM 70,000 - RM 100,000 | 19% |
| RM 100,000 - RM 400,000 | 25% |
| RM 400,000 - RM 600,000 | 26% |
| RM 600,000 - RM 2,000,000 | 28% |
| Over RM 2,000,000 | 30% |
Note: These are marginal rates - you only pay the higher rate on income within each bracket.
Source: Inland Revenue Board of Malaysia
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Get Paid as a Contractor →Malaysia has 11 progressive brackets: 0% on RM 0-5,000, 1% on RM 5,000-20,000, 3% on RM 20,000-35,000, 6% on RM 35,000-50,000, 11% on RM 50,000-70,000, 19% on RM 70,000-100,000, 25% on RM 100,000-400,000, 26% on RM 400,000-600,000, 28% on RM 600,000-2,000,000, and 30% above RM 2,000,000. Effective rates are very low—a RM 100,000 earner pays ~8%.
EPF (KWSP/Employees Provident Fund) requires 11% employee contribution and 12-13% employer contribution. Unlike tax, this is YOUR money in a retirement account—withdrawable at age 55 or for approved purposes (housing, medical, education). EPF contributions up to RM 4,000 are tax-deductible. EPF earned 5.5-6% dividends historically—decent returns.
Malaysia offers generous reliefs: personal relief RM 9,000, lifestyle (gadgets, gym, books) RM 2,500, medical expenses RM 10,000, education fees RM 7,000, life insurance RM 3,000, parental care RM 5,000, disabled individual RM 6,000. Child relief RM 2,000-8,000 depending on age/education. These significantly reduce taxable income.
Since January 2022, foreign income remitted to Malaysia is taxable for residents. However, significant exemptions apply: dividends from foreign companies, foreign-source partnership income, and income from employment exercised outside Malaysia. Income from countries with tax treaties can claim foreign tax credit. Previously, Malaysia taxed only domestic income.
Malaysia has no capital gains tax on stocks, bonds, or crypto. Real property gains tax (RPGT) applies to property: 30% if sold within 3 years, 20% years 4-5, and 0% after 5 years (5% for non-citizens after 5 years). This makes Malaysia attractive for investors and traders. Company shares disposing of substantial shareholdings may have different rules.
Last Updated: March 2026