Malaysia Tax Filing: Complete Guide to LHDN & e-Filing

Every Malaysian is expected to file their annual income tax Malaysia return with the Lembaga Hasil Dalam Negeri (LHDN) yearly. You’re also responsible for keeping accurate records of your MY tax returns, staying informed, and being compliant with the Employment Act and tax laws. 

If you’re new to this process, it’s normal to get confused at some point. Unclear deadlines, unfamiliar tax exemptions, confusion with rates, and navigating the e-filing 2026 system can leave you second-guessing your steps.

In this guide, we’ll walk you through the step-by-step process involved in filing your income tax 2026 in Malaysia, how to use the income tax calculator Malaysia tools, and common mistakes to avoid.

Learn more: 5 Challenges of Malaysia’s Tax Season and How HRIS Can Help

Understanding Income Tax in Malaysia 

Besides corporate and property tax, personal income tax Malaysia is one of the main taxes individuals must pay. LHDN Malaysia requires both residents and non-residents with an annual income exceeding RM37,333 after EPF contributions to declare their income for the year. However, Malaysia's tax rates on chargeable income differ based on residency status.

Malaysian residents are taxed at a progressive rate and are eligible to claim deductions. In contrast, non-residents must comply with a fixed Malaysia tax rate and are not eligible for deductions. A resident is an individual who has been in Malaysia for a period of 183 days, and a non-resident does not meet this threshold. 

While filing for income tax Malaysia for Year of Assessment 2026 (YA 2026), you must declare salary, dividends, interests, rent, pensions, bonuses, overtime, and directors’ fees, etc. For your income tax 2026, your declared income isn’t the same as your chargeable income. Declared income is your gross total annual income for the year, and your chargeable income is the taxable amount after claiming relevant exemptions and reliefs. 

For example, if your annual income for YA 2026 is RM 42,000, then you should declare that amount to the LHDN Malaysia. However, your chargeable income is the amount left after you have claimed your tax exemption relief.

Income Tax Malaysia 2026 Rates for Individuals

As we mentioned earlier, Malaysia tax rates for residents are tiered and progressive, so individuals are taxed based on their chargeable income rather than a flat percentage. This model helps low and middle-income earners by reducing their tax obligation. Non-residents work on a slightly different model, which means they pay tax at a flat rate of 30% on their chargeable income.

On the LHDN Malaysia website, you can find a detailed Malaysia tax rate table based on your income. However, calculating your exact tax amount, even with the table, can be challenging because of the various available tiers. Here is how you can walk around that: figure out what category your taxable income falls under, determine how much tax to pay on the first installment, and the remaining installment.

For example: 

Reliefs & Exemptions for Income Tax Malaysia 

Reliefs are deductions that residents can claim to reduce their taxable income, while tax exemptions are earnings on which you won’t have to pay tax. Both reliefs and exemptions are schemes provided by LHDN Malaysia to help taxpayers reduce their chargeable income and, consequently, the amount of income tax Malaysia they pay. There are many reliefs and tax exemptions you can claim, as stated on the LHDN website. A few of them include:

Personal reliefs

Malaysian residents can claim personal reliefs of RM 9,000 for themselves and dependent relatives. In this context, your dependent relatives are your parents, spouse, and children who depend on you for their upkeep. You’re eligible for an extra deduction of RM 6,000 if you’re disabled and RM 5,000 for a disabled spouse with a written certification from the Department of Social Welfare (DSW).

Reliefs for insurance, medical, and education

If you are pursuing a degree, you can claim deductions up to RM 7,000. For dependents who are critically ill and for fertility treatments for yourself and your spouse, you qualify for RM 10,000 tax relief. Minor medical situations like vaccinations, dental, and mental health check-ups make you liable to an RM 1,000 deduction.

EPF contributions & tax relief

EPF contributions are a retirement savings plan that Malaysian residents are mandated to comply with monthly. For both compulsory and mandatory contributions to the EPF, residents can claim RM 7,000. This fosters retirement savings discipline and economic stability.

Other reliefs

As a quota towards yourself and your dependents’ leisure and development, LHDN Malaysia allows you to claim RM 2,500 for expenses on books, journals, magazines, personal computers, tablets, internet services, and self-improvement courses. You can also reclaim RM 1,000 for breastfeeding equipment, sports training memberships, rental fees, and the purchase of sports equipment (as long as the sport is recognized under the Sports Development Act of 1997).

Step-by-Step e-Filing 2026 Guide

To file your income tax in Malaysia for 2026, follow the steps below:

• Visit the myTax website. The website’s default language is Malay, but if you prefer to navigate the site in English, check the top right-hand corner and click on 'English'.
• Click on E-daftar and log in. Fill in the required details in the provided form, print it out, and visit the nearest Lembaga Hasil Dalam Negeri (LHDN Malaysia) office to obtain your PIN.
• Once you have your PIN, log in to the website using the first-time login option. 
• Select the type of tax form that applies to you. On the website, there are various options to choose from: BE (for those without business income), B (for those with business income), etc.
• Review your pre-filled details to ensure they are accurate, fill in other particulars, as well as your income details.
• Claim tax reliefs, check your summary to find out the amount you owe or the refund you should get.
• Sign and submit the form.

While filing your income tax 2026, ensure to keep the following deadlines in mind to avoid penalties.

Read next: Malaysia's Annual Tax EA & E Form Guide

Using Tax Calculators and Tools

The LHDN Malaysia provides official tools to help you calculate your Potongan Cukai Bulanan (PCB), also called Monthly Tax Deduction (MTD). These income tax Malaysia tax calculators estimate how much is deducted from your salary each month and help you cross-check your employer’s payroll calculations.

There are also generic ones available online. These can give you a rough estimate of your annual tax liability based on your income, reliefs, and deductions. Malaysia tax calculator and income tax calculator Malaysia tools are useful for quick planning, but may not always reflect the latest LHDN Malaysia updates.

Third-party or generic calculators often don’t account for all reliefs, rebates, or changes in tax policy. They can be helpful for ballpark figures, but shouldn’t be relied on for official filing. The safest option is always LHDN’s official MY tax tools or verified payroll software.

For businesses, payroll software like Omni HR integrates tax calculations directly into payroll. This means monthly deductions (PCB calculator Malaysia/MTD), statutory contributions (EPF, SOCSO, EIS), and year-end forms (EA, CP39) are calculated automatically and stay compliant with the latest regulations. It reduces errors, saves time, and ensures employees are paid accurately while keeping the company audit-ready.

Common Mistakes for Income Tax Malaysia

Filing income tax Malaysia can be straightforward if you’re organized, but many individuals still run into errors that cost them money or lead to unnecessary penalties. Some of these mistakes include:

Missing out on relief claims

Relief claims are a surefire way to reduce your taxable income. And many taxpayers struggle with their tax obligation, either because they don’t understand or don’t know how to claim available reliefs. Before filing your tax returns for the year, read through the LHDN website and understand the various reliefs and exemptions that are available to you. When in doubt, reach out to experts and ask questions.

Using the wrong tax bracket / using outdated tables

For every year of assessment, the LHDN Malaysia publishes the income tax rate table for each earning category. So, using the wrong tax bracket or outdated Malaysia tax rate tables can cause you to overpay or underpay your taxes.

Late filing/penalties

For income tax Malaysia, the deadline for filing your return is 30 April (for non-business income) and 30 June (for business income). Failing to meet this criterion can attract penalties ranging up to RM 20,000 and even imprisonment.

Incorrect income declarations or omissions

Incorrect income declaration or omissions like forgetting to declare rental income, royalties, etc, can also attract fines up to RM 10,000 or double the tax undercharged. Consult a tax expert if you're confused, and ensure to review your tax return details carefully before submission.

Mistakes in PCB deductions by the employer

PCB deductions are monthly tax deductions by your employer. This deduction reduces the burden of tax payment for employees during tax season. Sometimes, your employer can make mistakes with your PCB calculation, causing you to overpay or underpay tax. If your PCB is more than your tax liability, you get a refund, but if otherwise, you have to top up.

For your income tax Malaysia filing, ensure to review your personal details and particulars as much as possible to prevent discrepancies that can trigger audits or penalties. So, before submitting, check that:

• You have filed the correct tax form.
• You have accurately declared your relevant assets and income.
• Your PCB aligns with your actual pay slip and annual tax filing.
• You have claimed all eligible reliefs and rebates.

How Omni Can Help

Navigating the ever-changing income tax Malaysia system can be difficult, from understanding Malaysia tax rate tiers and claiming all eligible tax exemptions to completing e-filing 2026 accurately. Omni HR helps modern teams simplify these tasks with our all-in-one HR platform that automates compliance and payroll while keeping your HR processes seamless.

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With Omni, you can: 

• Automate payroll and tax calculations, including PCB, EPF, SOCSO, and MTD using tools like PCB calculator Malaysia, income tax calculator Malaysia, and Malaysia tax calculator, ensuring your income tax 2026 filings are accurate.
• Integrate time and attendance tracking so employee hours, overtime, and leave automatically feed into payroll, reducing errors and saving valuable time.
• Centralize employee records and documents for instant access to contracts, tax forms, and other compliance requirements from LHDN Malaysia or Lembaga Hasil Dalam Negeri.
• Enable employee self-service for checking payslips, leave balances, and submitting requests directly via a mobile-friendly interface.
• Support multi-country payroll across APAC, so you can manage teams internationally while remaining compliant with local tax laws and MY tax obligations.
• Receive local support to answer questions on income tax online Malaysia, tax reliefs, or e-filing 2026, helping you stay audit-ready and compliant.

Omni transforms complex payroll and HR tasks into automated workflows, empowering HR teams to focus on strategy rather than manual tax and compliance work. Take the next step and book a demo with our team today and see how Omni can simplify payroll, compliance, and income tax Malaysia management for your growing team.