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Introduction
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Examples for calculating taxes
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Deep, Deep Dive
Young Family (Self Employed)
Aina is a contract worker who is married. Her husband has no income as he has not worked in the last two years. She made a total of RM80,000 in the year. She has two kids. One child is 12 years old and the other is 18 years old and doing a diploma that costs RM8,000 for the year.
As a contract worker, she has no EPF contributions but she contributes 10% of her earnings to her Private Retirement Scheme (PRS). During the year, she paid RM5,000 for medical insurance. She bought one laptop for RM2,400. She also supports her father with his medical bills.
| Description | RM | Explanation |
| Salary per annum | 80,000.00 | Total income earned in the year |
| All other income | – | No other income |
| Total income | 80,000.00 | |
| Tax reliefs | ||
| – 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) | -2,000.00 | RM2,000 relief for each unmarried child under 18 years |
| -Personal and Family (Child) | -8,000.00 | Relief for each unmarried child over 18 years doing a diploma or any higher qualification (maximum RM8,000) |
| -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 |
| – PRS | -3,000.00 | Aina can only claim this amount as the relief for the PRS scheme contributions is limited to RM3,000 |
| -Medical | -3,000.00 | You can claim this relief of up to RM3,000 if you have expenses related to education or medical insurance.In this case, although Aina spent RM5,000 on medical insurance, she can only claim for the maximum amount. |
| – Lifestyle | -2,400.00 | The lifestyle relief is limited to RM2,500. However, since she only spent RM2,400, she can only claim that amount. |
| Total Chargeable income | 47,100.00 | Although Aina earned RM80,000 during the year, her total chargeable income is RM47,100 because of the tax reliefs. |
| Tax payable on RM47,100 of chargeable income
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| – 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 | |
| – Balance RM12,100 (8%) | 968.00 | |
| Tax Payable | 1,568.00 | |
| Tax Rebates | ||
| – Zakat | -1,000.00 | 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 | 168.00* | From her tax payable of RM1,568, the total tax Aina has to pay is only RM168 because of the deductions from her tax rebates. |
*If you are self-employed, and don’t make monthly payments towards your taxes, you will have to pay the full amount when you file your taxes.
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