PCB Calculation Malaysia 2026: How Monthly Tax (MTD) Is Worked Out

PCB (Potongan Cukai Bulanan), also called MTD, is worked out with LHDN's formula: your employer estimates your chargeable income for the whole year, finds the tax on it, subtracts the PCB already deducted this year, and spreads the balance over the months left. For a single employee on a steady gaji of RM5,000, that comes to RM110 a month in 2026.

This guide walks through the official formula from LHDN's 2026 computerised calculation specification, with worked RM examples. If you only want your own number, the KiraBoss salary calculator shows PCB alongside EPF, SOCSO and EIS.

The PCB formula in plain English

LHDN's specification gives this formula for the current month:

PCB for the month = [(P − M) × R + B − (Z + X)] ÷ (n + 1)

What each letter means:

• P: your estimated chargeable income for the whole year (explained below)
• M: the start of the tax band P falls into (for example RM35,000)
• R: the tax rate for that band (for example 6%)
• B: the tax on M, after taking off the RM400 rebate where it applies
• Z: zakat you've already paid this year through payroll (not counting this month)
• X: PCB already deducted this year, including from a previous employer
• n + 1: the months left in the year, including this one (12 in January, 1 in December)

Once the monthly PCB is worked out, any zakat paid this month is subtracted from it to get the net PCB.

How P (yearly chargeable income) is estimated

P is the clever part. Your employer doesn't know what you'll earn for the rest of the year, so the formula assumes this month's pay repeats until December:

1. Take all the pay you've received so far this year, minus the EPF on it.
2. Add this month's pay minus this month's EPF.
3. Add this month's pay again for each remaining month (n), minus an estimated EPF for those months.
4. Subtract your reliefs: RM9,000 individual relief, RM4,000 for a spouse with no income, RM2,000 for each child under 18, plus any other reliefs you've declared.

EPF only counts up to the yearly limit (RM4,000 for most private-sector employees in the formula). The spec handles this by spreading whatever's left of that RM4,000 over the remaining months, so your EPF relief doesn't run out early.

The 2026 tax bands used for PCB

These are the M, R and B values from LHDN's 2026 table. "Category 1 & 3" covers single employees, married employees whose spouse works, and divorced or widowed employees. "Category 2" is married with a non-working spouse, which gets an extra RM400 spouse rebate in the lower bands.

• P RM5,001 – RM20,000: M = RM5,000, R = 1%, B = −RM400 (Category 2: −RM800)
• P RM20,001 – RM35,000: M = RM20,000, R = 3%, B = −RM250 (Category 2: −RM650)
• P RM35,001 – RM50,000: M = RM35,000, R = 6%, B = RM600
• P RM50,001 – RM70,000: M = RM50,000, R = 11%, B = RM1,500
• P RM70,001 – RM100,000: M = RM70,000, R = 19%, B = RM3,700
• P RM100,001 – RM400,000: M = RM100,000, R = 25%, B = RM9,400
• P RM400,001 – RM600,000: M = RM400,000, R = 26%, B = RM84,400
• P RM600,001 – RM2,000,000: M = RM600,000, R = 28%, B = RM136,400
• P above RM2,000,000: M = RM2,000,000, R = 30%, B = RM528,400

The negative B in the first two bands is the RM400 rebate (RM800 for Category 2) already built in. Above RM35,000 of chargeable income there's no rebate, so B is the same for every category. If P is RM5,000 or less, there's no tax and no PCB.

Two rounding rules that change the payslip figure

The specification sets two rules that explain odd-looking amounts:

1. Round up to the next 5 sen. RM287.02 becomes RM287.05, and RM152.06 becomes RM152.10. Before that, calculations are cut to two decimal places.
2. Under RM10, nothing is deducted. If the monthly PCB works out to less than RM10, your employer doesn't deduct it.

That second rule is why many people single employees earning around RM3,700 or less see zero PCB on their payslip.

Worked example 1: single, gaji RM5,000 in January

Aisyah is single, earns a basic RM5,000 a month and has no other reliefs declared. Her employee EPF is 11%, so RM550.

• This month: RM5,000 − RM550 = RM4,450
• EPF left for the year: RM4,000 − RM550 = RM3,450. Spread over 11 months that's RM313.63, which is lower than RM550, so RM313.63 is used.
• Remaining 11 months: (RM5,000 − RM313.63) × 11 = RM51,550.07
• Minus RM9,000 individual relief
• P = RM47,000.07

P falls in the RM35,001 – RM50,000 band, so M = RM35,000, R = 6%, B = RM600. Nothing has been deducted yet, so X = 0, and n + 1 = 12.

PCB = [(RM47,000.07 − RM35,000) × 6% + RM600] ÷ 12 = RM1,320.00 ÷ 12 = RM110.00

If her pay stays the same, she pays RM110 every month, RM1,320 for the year. That matches her yearly tax: RM60,000 − RM4,000 EPF relief − RM9,000 = RM47,000 chargeable income, which is RM600 + 6% of RM12,000 = RM1,320. For a fuller breakdown of her net pay, see how to calculate take-home salary in Malaysia.

Worked example 2: married, non-working spouse, two children, gaji RM6,000

Daniel earns RM6,000 a month. His wife doesn't work and they have two children under 18. He declares this to payroll, so he's Category 2. His EPF is RM660.

• This month: RM6,000 − RM660 = RM5,340
• EPF left: RM4,000 − RM660 = RM3,340 ÷ 11 = RM303.63
• Remaining months: (RM6,000 − RM303.63) × 11 = RM62,660.07
• Reliefs: RM9,000 individual + RM4,000 spouse + 2 × RM2,000 children = RM17,000
• P = RM51,000.07

That's in the RM50,001 – RM70,000 band: M = RM50,000, R = 11%, B = RM1,500.

PCB = [(RM1,000.07 × 11%) + RM1,500] ÷ 12 = RM134.16, rounded up to RM134.20.

A single colleague on the same RM6,000 would pay noticeably more, because they'd only have the RM9,000 individual relief. Over the year, Daniel's PCB adds up to RM1,610, which is exactly the tax on RM51,000 of chargeable income.

Worked example 3: joining a new job in July

Mei Ling starts a job in July at RM7,500 a month. She had no income earlier in the year. Her EPF is RM825, and n = 5 (August to December).

• This month: RM7,500 − RM825 = RM6,675
• EPF left: RM3,175 ÷ 5 = RM635
• Remaining months: (RM7,500 − RM635) × 5 = RM34,325
• Minus RM9,000 individual relief
• P = RM32,000

That's in the 3% band with the rebate: [(RM12,000 × 3%) − RM250] ÷ 6 = RM18.33, rounded up to RM18.35 a month.

A colleague on the same RM7,500 who's worked there since January pays about RM419.20 a month, because their P is RM77,000 (19% band). The formula is fair to Mei Ling only if she really had no earlier income. If she'd been working elsewhere from January to June, she must give her new employer Form TP3 with her previous pay, EPF and PCB. Otherwise her PCB will be far too low and she'll face a big bill when she files Form BE.

How bonuses are handled

A bonus, commission paid irregularly, or arrears is "additional remuneration". The spec calculates it separately: PCB is worked out on the year's income with the bonus and without it, and the difference is the bonus PCB. Because the whole bonus lands in one month at your highest tax rate, the deduction can look large. Why bonus-month PCB feels higher explains this in more detail.

Lowering PCB legally with Form TP1

By default, payroll only knows your individual relief, EPF and the family details you've declared. If you also pay for things like medical insurance, lifestyle purchases, SSPN deposits or your SOCSO contributions (relief up to RM350), you can declare them monthly on Form TP1. Your employer then adds them to the deductions in P, and your PCB drops straight away rather than waiting for a refund after you file.

You still have to keep receipts, because LHDN can audit the claims when you file Form BE.

Common mistakes

• Treating PCB as your final tax. PCB is an advance payment. Your real tax is settled when you file Form BE. If your reliefs weren't declared, you'll usually get a refund.
• Not submitting TP3 after changing jobs. Your new employer will under-deduct PCB, and you'll owe the difference in one go.
• Forgetting to update marital status or children. A newly married employee whose spouse doesn't work can move to Category 2 and pay less PCB.
• Comparing a bonus month with a normal month. The bonus PCB is calculated on top, so compare normal months with normal months.
• Expecting PCB on every salary. Below about RM3,700 a month for a single person, PCB usually works out under RM10, so nothing is deducted.

Check your own PCB

Put your gross pay into the salary calculator to see an estimate of PCB together with EPF, SOCSO and EIS. If the number on your payslip is very different, check that payroll has the right category, number of children and any TP1 or TP3 forms you submitted. To see how PCB fits into your annual tax and refund, read how to calculate income tax in Malaysia.

These examples use LHDN's 2026 formula and tax bands. Your employer's payroll software applies the same rules, but small differences of a few sen can come from how EPF and other deductions are rounded.