Income Tax Malaysia 2017 vs 2018 For Individuals: What’s The Difference In Tax Rate And Tax Reliefs?

Pang Tun Yau

6th March 2019 - 3 min read

Now that Malaysians can begin filing their taxes, it’s good practice to take a good look at your hard-earned income from the previous year and take advantage of the tax reliefs offered by the Inland Revenue Board (IRB) to get some money back via tax refunds.

It is also good practice to see if there are any changes in different assessment years. These changes may come in the form of different tax rates in different income tiers, or some tweaks to the tax reliefs available. Knowing these changes may be beneficial for you as it can prevent you from overpaying your income tax for the year.

Income Tax Rate Malaysia 2018 vs 2017

For assessment year 2018, the IRB has made some significant changes in the tax rates for the lower income groups. Not only are the rates 2% lower for those who has a chargeable income between RM20,000 and RM70,000, the maximum tax rate for each income tier is also lower.

Similarly, those with a chargeable income above RM100,000 will also see them paying a lower amount of income tax – even though the tax rates have not changed. What has changed is the maximum tax payable for each income bracket; there is an decrease of RM1,000 in each income bracket.

The comparison table below illustrates the changes clearly:

Chargeable Income	Calculations (RM)	YA 2017 Rate (%)	YA 2018 Rate (%)	YA 2017 Tax (RM)	YA 2018 Tax (RM)
0-5000	On the first 2,500	0	0	0	0
5,001-20,000	On the first 5,000 Next 15,000	1	1	0 150	0 150
20,001-35,000	On the first 20,000 Next 15,000	5	3	150 750	150 450
35,001-50,000	On the first 35,000 Next 15,000	10	8	900 1,500	600 1,200
50,001-70,000	On the first 50,000 Next 20,000	16	14	2,400 3,200	1,800 2,800
70,001-100,000	On the first 70,000 Next 30,000	21	21	5,600 6,300	4,600 6,300
100,001-250,000	On the first 100,000 Next 150,000	24	24	11,900 36,000	10,900 36,000
250,001-400,000	On the first 250,000 Next 150,000	24.5	24.5	47,900 36,750	46,900 36,750
400,001-600,000	On the first 400,000 Next 200,000	25	25	84,650 50,000	83,650 50,000
600,001-1,000,000	On the first 600,000 Next 400,000	26	26	134,650 104,000	133,650 104,000
Exceeding 1,000,000	On the first 1,000,000 Next ringgit	28	28	238,650 …..	237,650 ….

Income Tax Relief Malaysia 2018 vs 2017

Unlike the income tax rates for 2018 and 2017, there is virtually no change in income tax reliefs for the two assessment years. In fact, there is only one minor change, which applies to the medical expenses and examination of the individual, spouse, or child.

What changed is that the RM500 tax relief for complete medical examination for the individual, spouse, or child has been incorporated into the total tax relief for medical expenses for serious diseases for the individual, spouse, or child of RM6,000.

Here’s a table to show the difference:

YA 2018:

YA 2017:

Medical expenses for serious diseases for self, spouse, or child	RM6,000 (Limited)
Complete medical examination for self, spouse, or child	RM500 (Limited)

Essentially, for YA 2018, the tax relief for medical expenses for serious diseases as well as complete medical examination has been combined – though the maximum relief for the complete medical examination remains at RM500.

Overall, the changes in income tax rate and relief for YA 2017 and 2018 aren’t too drastically different. The lower- and middle-income groups save a little more, while the high earners pay a little extra, as the government aims to even the scales and be fair to the rakyat from all income groups.