PCB calculator Malaysia 2026: how Monthly Tax Deduction really works

By GrowThenDraw Editorial Team · Updated July 28, 2026 · 15 min read · Editorial policy

Potongan Cukai Bulanan (PCB), or Monthly Tax Deduction (MTD), is an advance payment of employment income tax. It is not normally calculated by taking a rough annual tax number and dividing it into twelve identical pieces.

The computerized method looks backward at accumulated pay and deductions, forward at the regular pay expected for the rest of the year, and separately at additional remuneration paid now. That is why the same salary can produce a different PCB after a bonus, a TP1 claim, a job change or a change in marital information.

Start with tax residency

HASiL separates non-resident and resident employees. A non-resident employee is generally subject to MTD at 30% of taxable remuneration. A resident or employee known to be resident uses the progressive resident schedule after eligible deductions and rebates.

Residence is a legal tax status, not simply citizenship or the country selected on a website. The calculator therefore keeps tax residency separate from the EPF or worker category.

The resident PCB projection formula

For normal remuneration, the method adds net accumulated remuneration, net current remuneration and estimated net normal remuneration for the remaining months. It then subtracts the individual, spouse, disability, child and other eligible relief amounts. In the specification, the resulting projected chargeable income is represented by P.

The annual tax corresponding to P is reduced by accumulated zakat and accumulated PCB, then divided by the number of months remaining including the current month. This produces the current normal-remuneration MTD before current-month zakat.

• Accumulated remuneration means earlier taxable employment remuneration in the same year, including relevant previous-employer information.
• Current normal remuneration is the regular remuneration for this payroll month.
• Estimated future remuneration normally follows the current regular remuneration for each remaining working month.
• Additional remuneration such as a bonus is excluded at this first step and handled separately.

Category 1, Category 2 and Category 3

The low-income B amount in the official tax schedule incorporates the individual rebate and, where relevant, the spouse rebate. Category 1 and Category 3 use the individual treatment. Category 2 generally applies where a married employee qualifies for the spouse deduction and spouse rebate.

In practical calculator language, Category 2 is the married-with-no-income-spouse choice. A married employee whose spouse has income generally uses Category 3. The facts of a joint or separate assessment can matter, so payroll records remain authoritative.

EPF and SOCSO relief are capped

The computerized formula reduces projected remuneration by eligible EPF or approved-scheme contributions, but the compulsory or voluntary EPF component used here is capped at RM4,000 for the year. Once accumulated and current EPF use the cap, no further projected EPF deduction is available.

Employee contributions to PERKESO under the Employees' Social Security Act 1969 or Employment Insurance System Act 2017 qualify for a separate personal deduction capped at RM350 for the year. A salary calculator should track the year-to-date amount rather than subtracting an unlimited monthly contribution twelve times.

How a bonus is calculated

A bonus, non-monthly commission, arrears, gratuity and similar current-month payments are additional remuneration. The method first calculates the normal-remuneration PCB without the current additional amount and projects the total normal PCB for the year.

It then recalculates projected annual chargeable income including the net additional remuneration. The extra MTD is the new annual tax less the projected normal-remuneration MTD and accumulated zakat. The amount paid now is the normal PCB after current zakat plus the additional-remuneration PCB.

• Bonus is not spread evenly over the year for the additional-remuneration step.
• EPF attributable to the bonus can reduce the net additional remuneration, subject to the RM4,000 annual EPF relief cap.
• An additional-remuneration PCB below RM10 is treated as zero under the specification's minimum rule.

Zakat changes PCB but remains a cash deduction

Zakat or fitrah paid through payroll reduces resident PCB as a rebate. If current zakat is larger than the normal PCB, the normal PCB cannot become negative; any treatment of remaining credit follows the accumulated calculation in later months.

For take-home pay, both the net PCB and zakat must still be subtracted from cash salary. Treating zakat only as a tax credit and forgetting its cash deduction would overstate the amount received by the employee.

Truncation, minimum PCB and five-sen rounding

The computerized method truncates relevant calculation results to two decimal places. Normal-remuneration or additional-remuneration PCB below RM10 is treated as zero before the applicable zakat treatment.

The final current-month amount is rounded up to the next five sen: RM100.01 through RM100.04 becomes RM100.05, while RM100.06 through RM100.09 becomes RM100.10. A correct calculator preserves those stages instead of applying ordinary two-decimal rounding too early.

Worked example: RM5,000 regular salary

Assume a resident single Malaysian employee aged 35 earns RM5,000 cash salary in January, has no bonus, taxable benefit, child relief, TP1 claim or zakat, and does not select voluntary LINDUNG 24 Jam. The current KWSP table gives RM550 employee EPF. The PERKESO schedules give RM24.75 employee SOCSO and RM9.90 employee EIS.

After the year projection, RM4,000 EPF cap, RM9,000 individual relief and RM34.65 current PERKESO/EIS relief, projected chargeable income is RM46,965.42. The resident schedule produces projected annual tax of RM1,317.92. Dividing over twelve gives RM109.82 before final rounding, so current PCB is RM109.85.

Employee deductions in this example are RM550 EPF, RM24.75 SOCSO, RM9.90 EIS and RM109.85 PCB: RM694.50 total. Estimated take-home cash pay is RM4,305.50. A different payroll month, accumulated amount or employee status can change the result.

Why a real payslip can differ

Use the calculator as an audit trail and planning estimate, not as authority to alter payroll. Employers should calculate and submit MTD through the official or approved process.

• A previous employer's TP3 remuneration, EPF, PCB or zakat is included.
• Regular pay changed during the year or an earlier bonus was paid.
• The employee has a CP38 instruction in addition to PCB.
• Taxable and exempt allowances, Benefit-in-Kind or accommodation were classified differently.
• The employee claimed itemized TP1 deductions or disability relief.
• A special approved tax rate or expatriate incentive applies.