Salary rate
Annual
Month
Semimonthly
Weekly
Day
Hour
Withholding
Salary
RM 2,578
Employees' Provident Fund (EPF)
- RM 304
Social Security Organization (SOCSO) contribution
- RM 15
Employment Insurance System (EIS) contribution
- RM 6
Total tax
- RM 325
Net pay
* RM 2,253
Marginal tax rate
7.7%
Average tax rate
12.6%
87.4%
Net pay
12.6%
Total tax
Total tax
Net pay
The Taxberg
RM 2,253
Net pay
RM 412
Tax the employer pays
RM 325
Tax you pay
Total tax paid
RM 736
Did you know your employer also pays tax on your salary? It costs the employer RM 412 to pay you RM 2,578. In other words, every time you spend RM 10 of your hard-earned money, RM 2.86 goes to the government.
Real tax rate
24.6%
So, with you and the employer both paying tax, what used to be a 12.6% tax rate now rises to 24.6%, meaning your real tax rate is actually 12% higher than what it seemed at first.
Summary
If you make RM 2,578 a year living in Malaysia, you will be taxed RM 325. That means that your net pay will be RM 2,253 per year, or RM 188 per month. Your average tax rate is 12.6% and your marginal tax rate is 7.7%. This marginal tax rate means that your immediate additional income will be taxed at this rate. For instance, an increase of RM 100 in your salary will be taxed RM 7.74, hence, your net pay will only increase by RM 92.26.
Bonus Example
A RM 1,000 bonus will generate an extra RM 923 of net incomes. A RM 5,000 bonus will generate an extra RM 4,613 of net incomes.
NOTE* Deductions are calculated based on the tables of Malaysia, income tax. For simplification purposes some variables (such as marital status and others) have been assumed. This document does not represent legal authority and shall be used for approximation purposes only.