How to do Pcb Calculator 2022 For HRMS Malaysia?
Monthly Tax Deduction (MTD or PCB, Potongan Cukai Bulanan) was introduced in January 1995, is a system of tax recovery where employers make deductions from their employees’ remuneration every month in accordance with the PCB Calculator Malaysia deduction schedule for HRMS Malaysia. This is mandatory, in that neither the employer nor employee has any choice in the matter.
PCB is a mechanism in which employers deduct monthly tax payments from the employment income of their employees.
Most people, however, are quite confused with the PCB calculator malaysia and income tax filing. Many are shocked to find out the amount of tax they would have to pay after all the calculation because they assume that PCB is the final tax.
Do I need to file a tax return?
Minimum Requirements (Effective Year 2019)
If you earn (after EPF deductions) a minimum of RM 34,000 yearly or RM 2,833 monthly, then you must file a tax return, unless you are exempted from doing so under the conditions set out below.
Employers’ Responsibilities Based on PCB Malaysia Forms
| Form CP22 | Notification of New Employee – an employer is required to notify the Inland Revenue Board (IRB) via Form CP22 of the commencement of employment of its employees in Malaysia within one month of the date of commencement of employment. |
| Form CP22A | Cessation of Employment – an employer is required to notify the IRB of the cessation of employment of an employee by the completion of Form CP22A at least 30 days before the date of cessation unless the employee is subject to the Monthly Tax Deduction (MTD) and deduction has been made by the employer or whose income is below the minimum amount subject to MTD, and employer is aware that the employee is to be employed elsewhere in Malaysia. |
| Form CP21 | Departure from Malaysia for a Period Exceeding 3 Months – an employer is required to notify the IRB of departure of an employee (most of the case will be expatriate) from Malaysia for a period of more than 3 months by the completion of Form CP21. The employer is required to withhold any money in the employer’s possession owing to the expatriate who has ceased or is about to cease employment until 90 days after the IRB receives the Form CP21 or upon receipt of the tax clearance letter, whichever is earlier. The employer can then release the balance of money withheld from the employee after the settlement of the outstanding taxes (if any) as shown in the tax clearance letter. |
| Form E | Every employer must furnish the Form E of its employees’ employment income no later than 31 March of the following year. |
| Form EA | Statement of remuneration (Form EA) completed and provided to the employee on or before the last day of February of the following year for employee’s personal income tax purpose. Form EA is not required to be sent to IRB. |
How to Calculate PCB Calculator 2022?
The Pcb calculator malaysia depends on the resident status of the employee.
There are 2 types of residency as follows:
a. Non Resident Employee
MTD of an employee who is not resident or not known to be resident in Malaysia shall be calculated atthe rate of 28 % of his remuneration.
Example :
Employee is not resident in calendar year 2016.
Total monthly remuneration : RM3,000.00
MTD calculation : RM3,000.00 x 28%
Total MTD : RM840.00
b. Resident Employee
MTD of an employee who is resident or known to be resident in HRMS Malaysia is derived after deducting all allowable deductions under the Act.
MTD formula are categorized into four. The employer may change the category of remuneration based on the approval from the IRBM for HRMS Malaysia.
The formula are based on:
i. Computerised calculation for Normal Remuneration
ii. Computerised calculation for Additional Remuneration
iii. Computerised calculation for Returning Expert Program
iv. Computerised calculation for Knowledge worker at specified region (ISKANDAR)
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PCB and Exemption from Filing a Tax Return
Even if you pay PCB Calculator Malaysia every month, you are still obligated to file a tax return unless you meet the conditions below, in which case you may opt not to file a tax return for HRMS Malaysia.
Conditions:
- Your only source of income is your employment income;
- You have been working for 12 months in the calendar year with the same employer;
- Your employer has been deducting PCB Calculator from your salary, correctly;
- Your employer is not paying any of your taxes; and
- You have not opted for a joint assessment with your spouse.
If any of those conditions are not met, then you must file a tax return.
If you meet the above conditions and have not submitted a tax return by the deadline for submission (April 30th) you will be deemed to have made an election not to submit a return.
Benefits of filing a tax return
There are benefits of to file a personal income tax return. In the case that if you have somehow underpaid your taxes for the year, filing a tax return will save you trouble down the road.
Imagine this, you still owe LHDN tens of thousands tax when you are about to retire! On the other hand, you may have overpaid taxes and filing a tax return will allow you to claim a tax refund for HRMS Malaysia.
What are the deadlines for PCB Calculation 2022?
An employer who fails to remit payment on or before the 15th of the following month (if the 15th is a holiday the deadline will be the last working day before the 15th) can be fined and/or imprisoned .
The fine is a minimum of RM 200 and not more than RM 2,000 or 6 months imprisonment or both. An employer who does not deduct MTD or deducts but fails to remit the MTD to IRBM can be prosecuted in a civil court. With this, the MTD not deducted becomes a debt to the Government in HRMS Malaysia.Â
Furthermore, a late payment penalty of 10% will be imposed on the balance of tax not paid after 30th April following the year of assessment. If the tax and penalty imposed is not paid within 60 days from the date the penalty is imposed, a further penalty of 5% will be imposed on the amount still owing.
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