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T20, M40 And B40 Income Classifications In Malaysia Team Team

Last updated 24 March, 2022


Malaysians are categorised into three different income groups: Top 20% (T20), Middle 40% (M40), and Bottom 40% (B40).

This is based on the Department of Statistics' (DOSM) Household Income and Basic Amenities (HIS/BA) survey of 2019. HIS/BA is conducted twice every five years. Over the years, the bar for each group’s income level has increased and this is one of the indicators of economic growth.

Related: Our Comprehensive Personal Income Tax E-filling Guide (2021 LHDN)

The concepts and terms used here are summarised as:

  • HOUSEHOLD: A person or a group of people (related or unrelated) who usually live together in a living quarters and make provisions (expenses) for food and other necessities of life together. In 2019, the average size of Malaysian households was 3.9 persons.
  • INCOME RECIPIENT: Household members who receive income in the reference period of the survey, and with at least one income recipient. In 2016 and 2019, average income recipients in Malaysia was 1.8 persons.
  • HOUSEHOLD INCOME: Overall income that is earned by household members, whether in cash or kind, and can be referred to as gross income. In 2019, the average monthly income in Malaysia is RM7,901
  • MEDIAN HOUSEHOLD INCOME: is the "middle" income number within a range of household incomes, arranged from low to high. For example, in Taman Bintang, there are five household incomes of RM5,000, RM10,000, RM15,000, RM20,000, and RM25,000; the median household income will be RM15,000. The median is used because it represents a more accurate representation of the area than a mean number (the average).
  • MEAN HOUSEHOLD INCOME: is the "average" income number where all household incomes are added up and divided by the number of households.

So how do we get classified into the B40, M40, and T20 income groups?

Median Monthly Income By Household Group
Household Group Median Income 2019 (RM) Median Income 2016 (RM)
T20 15,021 13,148
M40 7,093 6,275
B40 3,166 3,000

Household median income for T20, M40, and B40 in 2019 and 2016

Monthly Income Range By Household Group
Household Group Income Range 2019 (RM) Income Range 2016 (RM)
T20 > 10,971 > 9,619
M40 4,851 - 10,970 4,360 - 9,619
B40 < 4,850 < 4,360

Income range for T20, M40, dan B40 in 2019 dan 2016

Keep in mind that the income group definitions are not fixed. The names, B40, M40, and T20, represent percentages of the country's population of Bottom 40%, Middle 40%, and Top 20% respectively. The values may increase or decrease year-to-year, depending on the country's GDP, which is why the median household income is used as the determinant instead.

Though the income levels for each group has improved over the past three years, we should not ignore the escalating costs of living resulting from inflation and slower wage growth. To be exact, if we include inflation into the picture (3.15%, 2.1%, 2.09%, and 4.1% respectively in 2014, 2015, 2016, and first half of 2017), the ringgit’s value is diminishing.

It was also reported that the average monthly income of employees, based on the 2016 Salaries and Wages Survey Report by the Department of Statistics, increased from RM3,045 in 2016 to RM3,495 in 2019.

See also: Best Credit Cards For Different Income Groups

To explain this situation better, here’s the median income level for each state and you can see if you and your family are above or below the median standard.


Source:  Household Income and Basic Amenities Survey Report 2019, Department of Statistics Malaysia

Median Household Income By States In Malaysia
State Median Income 2019 (RM) Median Income 2016 (RM)
W.P. Kuala Lumpur 10,549 9,073
W.P. Putrajaya 9,983 8,275
Selangor 8,210 7,225
W.P. Labuan 6,726 5,928
Johor 6,427 5,652
Melaka 6,054 5,588
Pulau Pinang 6,169 5,409
Terengganu 5,545 4,694
Negeri Sembilan 5,055 4,579
Perlis 4,594 4,204
Sarawak 4,544 4,163
Sabah 4,235 4,110
Perak 4,273 4,006
Pahang 4,440 3,979
Kedah 5,522 3,811
Kelantan 3,563 3,079

Income differences between each state are quite significant based on the report above. T20 median income in Kelantan, Perlis and Pahang, can be compared to the median income of the M20 group in Kuala Lumpur.

According to a report prepared by the Department of Statistics Malaysia on Gross Domestic Product (GDP), seven states have surpassed the national level by 4.3% for the year 2019. Selangor achieved an increase of 6.7% while the Federal Territories by 6%. Apart from the three states, Kelantan also increased to 5.3%, the Federal Territory of Labuan by 5.2%, Negeri Sembilan 5.1%, Kedah 4.6% and Perlis 4.6%.

See also: Jobs with the Highest Starting Salaries for Fresh Graduates in Malaysia

Apart from Kuala Lumpur, Selangor, and Putrajaya; Pulau Pinang and the remaining 12 states’ median income level did not exceed the median income level for the M40 group in Malaysia. This means the rest still have a gap to close in order to improve the income gap between urban and rural areas.

Nonetheless, it is satisfying to see the huge jump in both Terengganu and Perak state’s median income level from 2014, most likely thanks to a boost in the tourism sector.

To give you a clearer picture, we also found out the top 20 districts in the country with the highest median household income in 2016. However, this does not mean you can get the same for moving into any of these areas. You might if you work hard and be smart about it!

Districts with the highest median household income in 2016

10 Districts With The Highest Median Household Income
District Median Income 2019 (RM)
Petaling, Selangor 8,993
Sepang, Selangor 8,937
Gombak, Selangor 8,501
Hulu Langat, Selangor 8,361
Klang, Selangor 7,888
Kulai, Johor 7,536
Bintulu, Sarawak 7,380
Johor Bahru, Johor 7,342
Kuala Langat, Selangor 6,950
Timur Laut, Pulau Pinang 6,902

Now that you know about the median income in different states and some districts, you should find out if your financial position is better or worse than the average Malaysians here. Making financial decisions are not easy, so remember to check out our blog for the latest insights and make your life better!

See also: Budget 2019: Summary Infographics to See

The team is comprised of many talented individuals, sharing their knowledge, experiences and research to help others make better financial decisions.