How to count Income Tax Calculator 2022 For Payroll Malaysia?
Generally, the simply definition to understand is a tax levied directly on personal income. An income tax calculator Malaysia is a tax that governments impose on income generated by businesses and individuals. Income taxes are a source of revenue governments to provide public services and provide goods for citizens.
The personal income tax that government collects can help to pay for programs and services such as Social Security, national Security, schools, medicals and roads.
Highlights of Budget 2022 Proposals in Income Tax Matters
- New personal income band for taxable income in excess of RM2mil to be taxed at 30% from 28%.
- Increase in tax relief to RM6,000 for medical expenses including fertility treatment.
- 10-year tax exemption for electronic sector than shifts towards n5G and Industry 4.0.
Personal Income Tax 2022
New Income Tax Band for Resident Individuals
A new chargeable income band for resident individuals such that chargeable income exceeding RM2 million is taxed at 30% instead of the current rate of 28%.
Increase in Income Tax Rate for Non-resident Individuals
Be increased from 28% to 30% with effect from the year of assessment 2020.
Women@Work: Tax Incentives for Women to Return to Work
An exemption from income tax on employment income for maximum period of 12 consecutive months is given to women who return to work after a career break on application to Talent Corporation Malaysia Berhad (“TalentCorp”).
It is proposed that a wage incentive of RM500 per month for 2 years be given to women who return to work after career break and a corresponding hiring incentive of up to RM300 per month for 2 years be given to their employers.
Increase in Tax Relief for Childcare Centre and Kindergarten Fees
The existing tax relief for individual tax payers who enrol their children aged up to 6 years in childcare centres or registered kindergartens be increased from RM1,000 to RM2,000 with effect from the year of assessment 2020.
Tax Relief for Fertility-related Medical Expenses
It is proposed that the scope of the existing tax relief of up to RM6,000 for medical expenses for serious diseases for self, spouse and child be expanded to cover the cost of fertility treatments with effect from the year of assessment 2020.
Increase in Tax Deduction Cap for Donations
Taxpayers other than companies can deduct certain charitable donations of up to 7% of their aggregate income and that payers that are companies can deduct up to 10% of their aggregate income.
Applicable to cash donations or contributions in kind made to certain prescribed institutions, sports activities or projects of national interest.
The scope of the allowable tax deduction be expanded to include the following contributions:
Cash wakaf contributions to state religious authorities or bodies established by state religious authority to administer wakaf;
Cash wakaf contribution to public universities approved by state religious authority to receive wakaf, and
Cash endowment contributions to public universities.
Income Taxpayer Responsibilities
Every individual who is liable to tax is required to declare his income to IRBM. The taxpayer is responsible for:-
- Obtaining and forwarding Income Tax Return Form (ITRF):The taxpayer has to submit via e-Filing or manual form that has been duly completed on or before;
i . Resident Individual and Does Not Carry On Business: 30 April every year
ii. Resident Individual and Carry On Business: 30 June every year
- Declaring income and claiming expenses.
- Computing income tax calculator malaysia payable.
- Keeping records for audit purposes.
- Paying the income tax payable.
Income Tax Record Keeping
Taxpayer is required to keep the following documents for 7 years:
- EA/EC Form
- Original dividend vouchers
- Insurance premium receipts
- Books purchase receipts
- Medical receipts
- Donation receipts
- Zakat receipts
- Children`s birth certificates
- Marriage certificate
- Other supporting documents
- Working sheets (if any)
The calculation of the 7 year period begins from the end of the year in which the ITRF is filed.
Income Tax Self Assessment System (SAS)
Tax administration under SAS is based on the concept Pay, Self Assess and File
Pay : Monthly salary deductions are made for individuals having employment income, or through installment for individuals having business income.
Self Assess : Taxpayers compute their own taxes via income tax calculator malaysia.
File : The ITRF is submitted to the IRBM together with the payment for the balance of the income tax calculator malaysia payable to meet any shortfall in the monthly payments or a claim for repayment if there is an overpayment.
Type of Earnings for Income Tax
In general, a taxpayer is required to pay tax on all kind of earnings, including income tax calculator malaysia from:
- Business or Profession
- Employment
- Dividends
- Interest
- Discounts
- Rent
- Royalties
- Premiums
- Pensions
- Annuities
- Others
Income Tax Calculator Rates For Year 2022
| Chargeable Income | Calculations(RM) | Rate(%) | Tax(RM) |
| 0 – 5,000 | On the first 2,500 | 0 | 0 |
| 5,001 – 20,000 | On the first 5,000 Next 15,000 | 1 | 0 150 |
| 20,001 – 35,000 | On the first 20,000 Next 15,000 | 3 | 150 450 |
| 35,001 – 50,000 | On the first 35,000 Next 15,000 | 8 | 600 1,200 |
| 50,001 – 70,000 | On the first 50,000 Next 20,000 | 14 | 1,800 2,800 |
| 70,001 – 100,000 | On the first 70,000 Next 30,000 | 21 | 4,600 6,300 |
| 100,001 – 250,000 | On the first 100,000 Next 150,000 | 24 | 10,900 36,000 |
| 250,001 – 400,000 | On the first 250,000 Next 150,000 | 24.5 | 46,900 36,750 |
| 400,001 – 600,000 | On the first 400,000 Next 200,000 | 25 | 83,650 50,000 |
| 600,001 – 1,000,000 | On the first 600,000 Next 400,000 | 26 | 113,650 104.00 |
| Exceeds 1,000,000 | On the first 1,000,000 Next Ringgit | 28 | 237,650 ………… |
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