Payroll taxes
in Malaysia.

Q: What is the tax bureau of Malaysia called?

Inland Revenue Board of Malaysia.

Q: Is there an employer payroll tax contribution in Malaysia?

Yes. Employer contributions (maximum) total 14.45%.

Q: How does the payroll tax system of Malaysia work?

Payroll taxes are paid via the Inland Revenue Board of Malaysia’s online tax portal .

SALARY PAYMENT IN Malaysian Ringgit (MYR, RM)

CONTRACT LANGUAGES Malay / English

PAYROLL TAX 13.22%

PAYROLL CYCLE Monthly

TIME TO HIRE 24 hours
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Malaysia

What is the average employer tax rate in Malaysia?

At the time of writing, the Corporate Income Tax rate in Malaysia is 24%.

Note that the Corporate Income Tax rate is expected to rise to 25% by the end of 2023.

Malaysia – 2023 CIT tax rates

Taxable income (RM)	Tax rate
0 < RM 150,000	15%
RM 150,001 to RM 600,000	17%
RM 600,001+	24%

What is the average employee tax rate in Malaysia?

Personal Income Tax in Malaysia is calculated according to a progressive system of taxation.

Taxable income is based on yearly income in RM.

Malaysia – Individual Income Tax

Taxable Income (RM)	Tax rate 2023
5.000 – 20.000	1%
20.000 – 35.000	RM150 + 3% of income above 20.000
35.000 – 50.000	RM600 + 8% of income above 35.000
50.000 – 70.000	RM1,800 + 13% of income above 50.000
70.000 – 100.000	RM4,400 + 21% of income above 70.000
100.000 – 250.000	RM10,700 + 24% of income above 10.000
250.000 – 400.000	RM46,700 + 24.5% of income above 50.000
400.00 – 600.000	RM83,450 + 25% of income above 400.000
600.000 – 1.000.000	RM133,450 + 26% of income above 600.000
1.000.000 – 2.000.000	RM237,450 + 28% of income above 1.000.000
2.000.000+	RM517,450 + 30% of income above 2.000.000

Non-residents pay a flat rate of 30% on total taxable income

Employer contributions in Malaysia

Employer contributions in Malaysia total a maximum of 14.45%.

Employer contributions include;

The Employee Provident Fund/EPF, Malaysia’s compulsory pension scheme which is mandatory for local nationals & permanent residents of Malaysia but voluntary for expats. The employer contribution is 13% (or 12% if the monthly salary is below RM5,000)
The Social Security Organization/SOCSO which covers for the Employment Injury Insurance Scheme/EIIS and the Invalidity Pension Scheme/IPS. The maximum employer contribution is 1.25%
The Employment Insurance System/EIS funds employment-related benefits and the reemployment placement program. The employer contribution is 0.2%.

Malaysia – Employer contributions

Contribution item	Contribution rate
Employees Provident Fund/EPF	12-13%
The Social Security Organization/SOCSO	1.25%
The Employment Insurance System	0.2%

Employee contributions in Malaysia

Employee contributions in Malaysia total a maximum of 11.2%.

Mandatory employee contributions include;

The Employees Provident Fund/EPF. Note this is mandatory for local nationals & permanent residents but voluntary for expatriates. The employee contribution totals 11%.
The Employment Insurance System/EIS. The employee contribution is 0.2% of salary.

Malaysia – Employee contributions

Contribution item	Contribution rate
Employees Provident Fund/EPF	11%
Employment Insurance System	0.2%

Hiring in Malaysia, Made Easy

Your business can easily hire employees in Malaysia without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.

FAQs

What is the tax bureau of Malaysia called?

Inland Revenue Board of Malaysia.

Is there an employer payroll tax contribution in Malaysia?

Yes. Employer contributions (maximum) total 14.45%.

How does the payroll tax system of Malaysia work?

Payroll taxes are paid via the Inland Revenue Board of Malaysia’s online tax portal.

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