Our Malaysia Managed Payroll Service provides businesses a convenient way to
manage their payroll within both Mainland Malaysia, Sabah and Sarawak.
Our services in Malaysia include:
Social Security Scheme
Employees Provident Fund Act 1991 (Act 452), known as the EPF is a social security institution that provides retirement funding. The fund requires contribution from both the employer and the employee. The employee’s portion of the EPF will be deducted from their salary. Expatriates or foreign citizens are not required to contribute to the EPF.
Inland Revenue Board of Malaysia is one of the main revenue collecting agencies of the Ministry of Finance.
Corporate Income Tax
If the company’s management and control are in Malaysia, the company is regarded as a tax resident. The company’s paid up capital of less than RM2.5 million, including the capital from all its related group of companies are taxed at the following different two-tiered rates for Year of Assessment (YA) 2016 and 2017. Companies with more than RM2.5 million paid up capital will be taxed at 24%.
Resident Company Tax Rates
|Chargeable Income||Tax Rate (%)|
|YA 2016||YA 2017|
|Paid up capital of not more than RM2.5 million||On first RM500,000||19%||18%|
|Company with paid up capital more than RM2.5 million||24%||24%|
Non-Resident Companies’ income accruing in or derived from Malaysia is taxable if it carries on its business through a permanent establishment in Malaysia.
Non-resident Company Tax Rates w.e.f YA 2017
|Type of income||Tax rate (%)|
|Business or rental income||24%|
|Rental of moveable properties||10%|
|Technical or management service fees||10%|
Personal Income Tax
The individual is regarded as a tax resident in that YA if the following conditions apply:
Resident Personal Income Tax Rates
|Chargeable Income in Ringgit||Rate %||Tax ($) in Ringgit|
|5,001 – 20,000||On the First 5,000||0|
|20,001 – 35,000||On the First 20,000||150|
|35,001 – 50,000||On the First 35,000||900|
|50,001 – 70,000||On the First 50,000||2,400|
|70,001 – 100,000||On the First 70,000||5,600|
|100,001 – 250,000||On the First 100,000||11,900|
|250,001 – 400,000||On the First 250,000||47,900|
|400,001 – 600,000||On the First 400,000||84,650|
|600,001 – 1,000,000||On the First 600,000||134,650|
|Above 1,000,000||On the First 1,000,000||238,650|
The individual is regarded as a non-resident if the individual stays in Malaysia for less than 182 days in a year, regardless of citizenship or nationality.
Non-Resident Personal Income Tax Rates
|Types Of Income||Rate (%)|
|Business, trade or profession
Payments for services in connection with the use of property or installation, operation of any plant or machinery purchased from a non-resident;
Payments for technical advice, assistance or services rendered in connection with technical management or administration of any scientific, industrial or commercial undertaking, venture, project or scheme;
Rent or other payments for the use of any movable property
Individuals are not taxable if their employment in Malaysia is less than 60 days, are employed on board a Malaysian ship, aged 55 years old who are receiving interest from banks, pension, or tax exempt dividends.