Payroll taxes
in Malaysia.

Q: What is the tax bureau of Malaysia called?

Inland Revenue Board of Malaysia.

Q: Is there an employer payroll tax contribution in Malaysia?

Yes. Employer contributions (maximum) total 14.45%.

Q: How does the payroll tax system of Malaysia work?

Payroll taxes are paid via the Inland Revenue Board of Malaysia’s online tax portal .

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What is the average employer tax rate in Malaysia?

At the time of writing, the Corporate Income Tax rate in Malaysia is 24%.

Note that the Corporate Income Tax rate is expected to rise to 25% by the end of 2023.

Malaysia – 2023 CIT tax rates

Taxable income (RM)	Tax rate
0 < RM 150,000	15%
RM 150,001 to RM 600,000	17%
RM 600,001+	24%

What is the average employee tax rate in Malaysia?

Personal Income Tax in Malaysia is calculated according to a progressive system of taxation.

Taxable income is based on yearly income in RM.

Malaysia – Individual Income Tax

Taxable Income (RM)	Tax rate 2023
5.000 – 20.000	1%
20.000 – 35.000	RM150 + 3% of income above 20.000
35.000 – 50.000	RM600 + 8% of income above 35.000
50.000 – 70.000	RM1,800 + 13% of income above 50.000
70.000 – 100.000	RM4,400 + 21% of income above 70.000
100.000 – 250.000	RM10,700 + 24% of income above 10.000
250.000 – 400.000	RM46,700 + 24.5% of income above 50.000
400.00 – 600.000	RM83,450 + 25% of income above 400.000
600.000 – 1.000.000	RM133,450 + 26% of income above 600.000
1.000.000 – 2.000.000	RM237,450 + 28% of income above 1.000.000
2.000.000+	RM517,450 + 30% of income above 2.000.000

Non-residents pay a flat rate of 30% on total taxable income

Employer contributions in Malaysia

Employer contributions in Malaysia total a maximum of 14.45%.

Employer contributions include;

The Employee Provident Fund/EPF, Malaysia’s compulsory pension scheme which is mandatory for local nationals & permanent residents of Malaysia but voluntary for expats. The employer contribution is 13% (or 12% if the monthly salary is below RM5,000)
The Social Security Organization/SOCSO which covers for the Employment Injury Insurance Scheme/EIIS and the Invalidity Pension Scheme/IPS. The maximum employer contribution is 1.25%
The Employment Insurance System/EIS funds employment-related benefits and the reemployment placement program. The employer contribution is 0.2%.

Malaysia – Employer contributions

Contribution item	Contribution rate
Employees Provident Fund/EPF	12-13%
The Social Security Organization/SOCSO	1.25%
The Employment Insurance System	0.2%

Employee contributions in Malaysia

Employee contributions in Malaysia total a maximum of 11.2%.

Mandatory employee contributions include;

The Employees Provident Fund/EPF. Note this is mandatory for local nationals & permanent residents but voluntary for expatriates. The employee contribution totals 11%.
The Employment Insurance System/EIS. The employee contribution is 0.2% of salary.

Malaysia – Employee contributions

Contribution item	Contribution rate
Employees Provident Fund/EPF	11%
Employment Insurance System	0.2%

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FAQs

What is the tax bureau of Malaysia called?

Inland Revenue Board of Malaysia.

Is there an employer payroll tax contribution in Malaysia?

Yes. Employer contributions (maximum) total 14.45%.

How does the payroll tax system of Malaysia work?

Payroll taxes are paid via the Inland Revenue Board of Malaysia’s online tax portal.

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