{"id":18255,"date":"2022-03-09T19:00:00","date_gmt":"2022-03-09T11:00:00","guid":{"rendered":"https:\/\/www.comparehero.my\/blog\/uncategorized\/income-tax-how-much.html"},"modified":"2026-03-26T15:59:45","modified_gmt":"2026-03-26T07:59:45","slug":"income-tax-how-much","status":"publish","type":"post","link":"https:\/\/www.comparehero.my\/blog\/tax-planning\/income-tax-how-much.html","title":{"rendered":"Income Tax Malaysia 2022: Who Pays and How Much?"},"content":{"rendered":"\n

It\u2019s that time of the year again- the season where legally employed Malaysians and their employees figure out their income tax rate, calculate their tax reliefs and add up their tax refund.<\/p> \n

Now if you\u2019re legally employed in Malaysia, or you are an employer here, you would have to pay taxes. However, in this article, we\u2019ll be solely focusing on individual income tax<\/strong>, which means tax paid by employees in Malaysia<\/strong>.<\/p> \n

If this is all still new to you, or if you just need a quick refresher, we\u2019ve got you covered. Here is our guide to exactly how much tax you\u2019ll have to pay in 2022.<\/p> \n

Who should pay taxes?<\/h2> \n

According to Lembaga Hasil Dalam Negeri (LHDN)<\/a>\u2013also known as the Inland Revenue Board\u2013those earning at least RM34,000 a year after EPF deductions need to pay taxes<\/strong>. Those who fail to do so can face legal action, so make sure you do your part and declare your income.<\/p> \n

However, you should still file your taxes even if you earn less than RM34,000 annually. You won\u2019t have to pay anything, but it is still necessary to declare your income. At this juncture, it\u2019s worth mentioning that there\u2019s a difference between filing your tax returns and paying taxes<\/strong>, as not everyone who files their returns will need to pay tax\u2013only those who earn RM34,000 and more a year.  <\/p> \n

Adding on to this, any income that you earn outside of Malaysia is not taxable<\/strong>. You are also not required to pay taxes in Malaysia if you have been employed for less than 60 days<\/strong>. You will, however, need to declare ALL types of income (part time and freelance included)<\/strong> that you earn in Malaysia.<\/p> \n

Do foreigners who are working in Malaysia need to pay tax?<\/h3> \n

Yes, like Malaysian nationals, all foreigners who have been employed in Malaysia for over 182 days are eligible to be taxed under standard Malaysia income tax laws and rates. However, foreigners working in Malaysia must visit the nearest LHDN branch or Non-Resident Branch to give notice of their chargeability within 2 months of their arrival in Malaysia.<\/p> \n

How are my taxes calculated?<\/h2> \n

Firstly, the total of all your incomes in the whole tax year will be added<\/strong>. Then, if you qualify for any of the tax exemptions and reliefs, those amounts will be deducted from your income amount. Tax exemptions and reliefs are \u2018discounts\u2019 you can get for certain expenses<\/strong> made in the year. We\u2019ll look at what exemptions you can for the 2021 tax year shortly but for now, this is what you need to know:<\/p> \n

Total income – tax exemptions and reliefs = chargeable\/taxable income<\/strong><\/p> \n

Your tax rate is calculated based on your taxable income. So the more taxable income you earn, the higher the tax you\u2019ll be paying. Per LHDN\u2019s website<\/a>, these are the tax rates for the 2021 tax year.<\/p> \n

\"guide-income-tax-2022-01\"<\/p> \n

Coming back to the tax exemptions and reliefs, these are all the ones that were announced by the government during the 2022 Budget speech<\/a>:<\/p> \n

Individuals and families<\/strong><\/p> \n