Examples for calculating taxes
Deep, Deep Dive
What is a tax rate?
A tax rate is the percentage used to calculate the tax you will have to pay (your tax payable) from your chargeable income. The higher your chargeable income, the higher your tax rate, and the more tax you’ll pay.
For example, if your net income is RM80,000 and you’ve used your reliefs, your chargeable income will come to RM47,100. This is how your taxes will be calculated:
|Chargeable Income per annum (RM)||Calculations (RM)||Rate %||Tax (RM)|
|0 – 5,000||On the First 5,000||0||0|
|5,001 – 20,000||Next 15,000||1||150|
|20,001 – 35,000||Next 15,000||3||450|
|35,001 – 50,000||Next 15,000||8||1,200|
Your total tax payable will be RM0 + RM150 + RM450 + RM1,200 = RM1,800.
You can easily calculate your tax payable when doing your filing on the LHDN website. However, if you wish to calculate it, do click here.
For the tax rates for assessment year 2022, please click here.