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Calling all taxpayers! It’s tax season in Malaysia. Did you know that filing and paying your income tax online is incredibly convenient these days? Fortunately, the Inland Revenue Board of Malaysia (IRBM), also known as LHDN, offers several easy ways to get it done at your fingertips.
Income Tax Malaysia 2024: Why Must We Pay, Who Pays, How Much?
Are you aware of the significance of paying income tax in Malaysia and who is responsible for it? Understanding these aspects is crucial for every taxpayer. Whether you’re an individual or a business entity, complying with income tax regulations is mandatory. As for the process, MyTax Portal offers a user-friendly platform for income tax online payments.
If you’re unfamiliar with it, here are some guidelines to help you navigate through the process of paying your income tax online this year seamlessly.
Why Do We Pay Our Income Tax?
Some employees have their annual income tax payments managed through mandatory monthly deductions known as PCB, overseen by their employers. However, sole proprietors and individuals with side incomes may be responsible for settling their tax payments independently if there is a deficit.
This means they must ensure they have sufficient funds to cover their tax liabilities at the end of the tax year. As a taxpayer in Malaysia, failing to pay your income tax will cause legal action to be taken against you.
Paying your income tax contributes as a primary source of revenue for governmental expenditures such as public services, infrastructure, as well as facilities provided for the people.
Who Needs to Pay Income Tax?
If you are a Malaysian earning RM34,000 salary per annum (after EPF deductions), you are eligible to be registered as a taxpayer under the IRBM. Divide that yearly figure into 12 months, it will be around RM2,833.33 per month. This should also include all your taxable income, and not only your monthly wage.
However, married individuals with non-working spouses will only be eligible to pay their income tax if their salary reaches RM46,001 and above annually (after EPF deduction). Other than that, if you run your own business, the chargeable rate to pay for your income tax varies from two percent to 26 percent.
How Much Needs to be Paid?
Notably, you can refer to the Year of Assessment 2023 income tax schedule below for the amount of tax imposed on each resident individual based on their chargeable income. For non-resident individuals, they are subject to a 30 percent flat rate which excludes the income they earned from outside Malaysia.
| Income Tax Schedule for Assessment Year 2023 | ||||
| Category | Chargeable Income (RM) |
Calculations (RM) | Rate (%) | Tax (RM) |
| A | 0 – 5,000 | On the first 5,000 | 0 | 0 |
| B | 5,001 – 20,000 | On the first 5,000
Next 15,000 |
1 | 0
150 |
| C | 20,001 – 35,000 | On the first 20,000
Next 15,000 |
3 | 150
450 |
| D | 35,001 – 50,000 | On the first 35,000
Next 15,000 |
6 | 600
900 |
| E | 50,001 – 70,000 | On the first 50,000
Next 20,000 |
11 | 1,500
2,200 |
| F | 70,001 – 100,000 | On the first 70,000
Next 30,000 |
19 | 3,700
5,700 |
| G | 100,001 – 400,000 | On the first 100,000
Next 300,000 |
25 | 9,400
75,000 |
| H | 400,001 – 600,000 | On the first 400,000
Next 200,000 |
26 | 84,400
52,000 |
| I | 600,001 – 2,000,000 | On the first 600,000
Next 1,400,000 |
28 | 136,400
392,000 |
| J | More than 2,000,000 | On the first 2,000,000
Next RM |
30 | 528,400
|
How to Pay Income Tax Online?
If you’ve overpaid your income tax through monthly deductions, the surplus will be refunded to you using the bank account information you supplied. Conversely, if you owe taxes, you have several payment options available, including e-banking, collection agents, credit and debit cards, and ATMs, among others.
Starting from 1st of April 2021, your income tax payment (except for payment of income tax using credit and debit cards, as well as income tax paid by foreigners) shall only be made through MyTax Portal. Alternatively, you can use commercial banks’ internet banking portal. Here’s how:
Pay Income Tax Online via MyTax Portal
For first timer, there are two things that need to be done before you can proceed with filing and paying your income tax online via MyTax Portal, which are:
- Obtain your TIN (Tax Identification Number) at e-Daftar in MyTax portal. You will receive email with your income tax number within three to five working days.
- Get your digital certificate (e-KYC or e-CP55D) as well as one time PIN to create new account.
Once you have completed these steps, you can follow the steps below:
- Log in to your new account, go to MyTax Portal, select “Identification Card No.” and insert your IC number;
- Go to the top of MyTax Portal page, select “ezHasil Services” and click on “e-filing” to file your taxes by inserting your statutory income and other income you’ve earned for the Year of Assessment 2023;
- You will also have to fill up the tax relief section and submit the tax return;
- If there is additional tax to be paid (which might happen due to higher taxable income even after the mandatory tax deduction), go back to “ezHasil Services” and click on “e-billing” to check your tax bill. Make sure the details are all correct;
- Proceed with “Payment Channel Options” and choose “ByrHASiL” for FPX online payment;
- Select your preferred bank, and click “Next” to complete the payment. It is advisable to save a hard copy of the receipt for your record;
- You can also click on “ByrHASiL” at the main page of MyTax Portal and choose “Payment Using Tax Identification Number (TIN)” to skip step 4 and step 5.
Pay Income Tax via Internet Banking
Other than MyTax Portal, taxpayers can also perform their duty online via their registered commercial bank’s internet banking portal such as;
- CIMB Clicks (individual only)
- CitiDirect (business only)
- HLB Online (individual & business)
- Maybank2u (individual only)
- Maybank2e (business only)
- MyBSN (individual only)
- Pos Online (individual & business)
- Public Bank eBank (individual & business)
- RHB Online (individual only)
Don’t Miss the Deadline, Pay Income Tax Online Today
Now you know how to make your income tax payment online, you’ll also realize that it can take sometimes to familiarize yourself with the system. That’s fine, as long as you don’t miss the deadline. Please note that the deadline for resident individuals to submit their e-filing and ByrHASil is on 15th May 2024.
For any inquiries regarding e-filing, or what can be claimed as income tax, you can refer to other relevant articles by Pesan by Qoala. In addition, for best medical and health insurance to increase your tax relief, visit qoala.my for more information. Qoala is the leading platform for comparing and renewing the best insurance in Malaysia, ensuring a fast, easy, and secure process.
