Examples for calculating taxes
Deep, Deep Dive
Zarin is married with two kids below 18 years old. He earns RM8,000 per month from a single employer. He also has an apartment that he rents out for RM1,000 per month. His wife is a stay-at-home mum who has no income. During the year, he paid RM5,000 for medical insurance.
He bought two laptops, for him and his wife, that cost him RM5,000. Since his dad passed away, he has been supporting his mother’s medical treatment which comes up to RM1,500 per year.
|Salary per annum||96,000.00||Total salary earned in the year|
|Bonus||12,000||Total bonus for the year|
|All other income||0||No other income|
|– Personal and Family (automated)||-9,000.00||Automatic tax relief given to all individuals|
|– Personal and Family (Wife)||-4,000.00||Relief for husband/wife who doesn’t work (maximum RM4,000)|
|– Personal and Family (Child)||-4,000.00||RM2,000 relief for each unmarried child under 18|
|– Medical (Parent)||-1,500.00||You can claim up to RM8,000, if you have medical treatment, special needs and carer expenses for your parents (medical condition certified by medical practitioner)|
|– EPF||-4,000.00||Total EPF deductions for the year (capped at RM4,000)|
|– Medical||-3,000.00||You can claim this relief, which is limited to RM3,000, if you have expenses related to education or medical insurance. In this case, although Zarin has spent RM5,000 on medical insurance, he is only able to claim for the maximum amount.|
|– Lifestyle||-2,500.00||Relief for Lifestyle expenses (maximum RM2,500). He can claim for the first RM2,500 spent on the laptops under here.|
|– Lifestyle – Additional (personal computer / smartphone / tablet)||-2,500.00||Additional relief for purchase of personal computer, smartphone or tablet for self, spouse or child (Maximum RM2,500, in addition to general Lifestyle relief). He can claim for the remaining RM2,500 expense here, for the 2nd laptop he purchased for his wife.
|Total Chargeable income||77,500.00||Although he made RM108,000 for the year, the tax reliefs brought his chargeable income to RM77,500.
|Tax payable on RM77,500 of chargeable income
|On the first RM5,000 (0%)||–||
Based on tax rate for the assessment year 2021
|On the next RM15,000 (1%)||150.00|
|On the next RM15,000 (3%)||450.00|
|On the next RM15,000 (8%)||1,200.00|
|On the next RM20,000 (13%)||2,600.00|
|Balance RM7,500 (21%)||1,575.00|
|– Zakat||-1,500.00||Zakat payments for the year|
|– Rebate for wife with no income||-400.00||Rebate for husband or wife who has no income or earns below RM35,000 of chargeable income.|
|Total Tax Payable||4,075.00*||From his tax payable of RM5,975, Zarin’s total tax payable for the year was lowered to RM4,075 because of the tax rebates.|
*Usually, when you work for a single employer, payments towards your tax will be taken from your salary through Monthly Tax Deductions (PCB). So, you won’t have to pay a huge amount when you file your taxes.