PCB in Salary Payslip stands for Potongan Cukai Bulanan, a Malay term which translates to Monthly Tax Deduction. It is a series of monthly deductions that are mandatory for certain taxpayers in Malaysia to comply with income tax requirements.
This is often seen on Malaysian salary payslips and is part of the mechanism used by the government to collect income tax. The amount of PCB deducted typically depends on the individual’s monthly salary and other taxable income. It is a common deduction that employees would encounter in their salary payslips.
What is PCB in salary payslip?
Why PCB is required?
This system requires employers to deduct income tax from their employee’s monthly salary. The deducted amount is then remitted to the LHDN.
The goal is to spread the tax burden evenly across the year instead of requiring employees to pay a lump sum during tax filing season.
What is the minimum salary to pay PCB in Maaysia?
PCB (Potongan Cukai Bulanan), also known as Monthly Tax Deduction, is a series of monthly deductions that an employer must make from an employee’s salary in Malaysia.
The minimum salary to pay PCB is RM 2,500 per month. However, if the employee’s monthly wage does not exceed RM 2,500, the employer is not required to make a PCB deduction, but it is still subject to income tax if the annual income exceeds the chargeable income level.
How to calculate PCB manually based on my salary?
PCB (Potongan Cukai Bulanan) or Monthly Tax Deduction is a type of income tax that is deducted directly from a Malaysian employee’s monthly salary. To calculate PCB manually, you can follow these steps:
- Calculate your total monthly taxable income. This typically includes your basic salary, fixed allowances, and other taxable income sources.
- Subtract your EPF (Employees Provident Fund) contribution from your total monthly taxable income. The maximum amount of EPF contribution that can be deducted for tax purposes is RM4,000 per year or RM333.33 per month.
- Apply the appropriate tax rate to your taxable income. The tax rates in Malaysia are progressive and range from 0% to 30% depending on your annual income.
Here is an example of how to calculate PCB:
Let’s say your monthly salary is RM5000 and your EPF contribution is RM550.
Step 1: Calculate your total monthly taxable income
RM5000
Step 2: Subtract your EPF contribution
RM5000 – RM333.33 = RM4666.67
Step 3: Apply the appropriate tax rate
If your annual income is less than RM35,000, the tax rate is 0%. If it’s between RM35,001 and RM50,000, the tax rate is 1%. If it’s between RM50,001 and RM70,000, the tax rate is 3%, and so on.
For this example, let’s say the tax rate is 3%.
Your PCB would be RM4666.67 x 3% = RM139.99
Please note that this is a simplified example. The actual calculation may be more complex depending on your individual circumstances, and it’s best to consult a tax professional if you’re unsure.
However, the easiest way to calculate PCB is by using the PCB calculator provided by the Inland Revenue Board of Malaysia (LHDN) on their official website.
Is there any MTD PCB calculator available on LHDN website?
Yes, a PCB (Potongan Cukai Bulanan) which also called MTD (Monthly Tax Deduction) calculator is available on the LHDN (Inland Revenue Board of Malaysia) website.
Not only that, they do provide PCB deduction tables and guidelines on how to calculate PCB. For the actual calculation, individuals may need to use third-party online PCB calculitors or manually calculate it according to the provided tables and guidelines.
You can access it here: http://calcpcb.hasil.gov.my/index.php?&lang=eng