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Wednesday, February 1, 2012

Calculating PCB or Schedular Tax Deduction (STD) for Salary and Bonus






Recently I have got a reader asking me on how to calculate PCB given the certain amount that he or she told me from my How To Calculate PCB or Schedular Tax Deduction (STD) for Salary and Bonus post that I have written in 2010. So, I guess it is time to refresh the blog post with the example that he or she gave me.


Ok. Here we go. We are about to calculate the PCB given the salary is RM2,000 and with allowance of RM300 and the bonus given is 2 months. So we have the total bonus of RM4,000. Again, I will be using the PCB rate for single.

The calculation is as follows:-
Salary = RM2,000
EPF deduction = RM220

Salary for PCB calculation
= Gross salary - EPF deduction
= RM2,000 - RM220
= RM1,780
(this is also your net_salary when you want to calculate the PCB rate for bonus)

(Again we need to take note: The maximum total EPF deduction allowed for PCB or STD calculation is RM500 (RM6,000 / 12 = RM500). If your salary is RM5,000 and above, just put RM500 under EPF deduction )

According to the PCB rate table, the PCB is 0. So you are not going to get any PCB deduction on monthly salary if your salary is RM2,000.

Ok. The following is the calculation for PCB for bonuses.
Bonus = RM4000 (2 x RM2,000)
EPF deduction = RM280

Here is the tricky part on how I get RM280 instead of RM440 for the EPF deduction. This EPF deduction is not the EPF deduction that we are going to have on our payslip. This is just for PCB calculation. Maximum available EPF deduction for PCB calculation = RM500, so the EPF deduction for bonus PCB calculation = RM500 - RM220 = RM280, instead of RM440.


Bonus for PCB calculation
= Gross Bonus - EPF deduction
= RM4,000 - RM280
= RM3,720
(take this as net_bonus when you calculate your PCB deduction)


The amount for bonus PCB calculation has a formula like the following:-
= (1/12 x net_bonus) + net_salary
= (1/12 x 3720) + 1780
= 310 + 1780
= RM2,090

According to the PCB rate table, the PCB for RM2,090 is RM0.

To finalized the calculation, you still need to take the (PCB for bonus month) - (PCB for salary month) x 12, which in this case is 0. So, you will not get any tax deduction when the bonus is out as well.

Anonymous, I hope, I answer your question with the above calculation.



Let us take RM3,500 as monthly salary as well as again 2 month of bonuses, at least we can see the calculation over here.

Salary = RM3,500
EPF deduction = RM385

Salary for PCB calculation (or we called it net_salary)
= RM3,500 - RM385
= RM3,115

So from the PCB rate table, the PCB is RM56 (this is also called PCB_for_salary.

Bonus = RM7,000 (2 x RM3,500)
EPF deduction is RM115

Salary for PCB calculation (or we called it net_bonus)
= RM7,000 - RM115
= RM6,885

The amount for bonus PCB calculation has a formula like the following:-
= (1/12 x net_bonus) + net_salary
= (1/12 x 6885) + 3115
= 573.75 + 3115
= RM3,688.75

From the PCB table, we will get RM128. (PCB_for_bonus)

So we will use the formula (PCB_for_bonus - PCB_for_salary) x 12 in order to calculate the PCB deduction for the bonus.
PCB deduction for bonus
= (RM128 - RM56) x 12
= RM864.

I just realized the LHDN website already remove the PCB rate table, so let me think of a way to get the complete one and then upload it and share it to everyone. As of now, just take my PCB rate as it is.

18 comments:

  1. Help~~
    does anyone know bout CB38, because my ex-employer hold my 1 month salary, the reason he give is because of income tax, and i need to go LHDN do declaration.

    email and let me know please
    zen801121@yahoo.com.tw

    ReplyDelete
  2. Hi Anonymous,

    Is it CB38 or CP38? As far as I remember, there is only CP38. I would assume you mean CP38. Will reply to you via your email on this. Check it out later.

    ReplyDelete
  3. where can I download the 2012 PCB Table?
    I don't understand "So from the PCB rate table, the PCB is RM56 (this is also called PCB_for_salary."
    Where Rm56 came from?

    I hope you may answer my question.

    Thank you

    ReplyDelete
  4. AdamKing, is there a way you can drop me your email? I used to have the PCB table but need some time to dig out from my hard drive.

    And on your question RM56 is from the PCB table, which is the same document that you are asking me. Once you have the table, when you see the RM3,115 range, the PCB rate should be RM56.

    ReplyDelete
  5. Hi AdamKing
    Wish to know PCB rate is it differ from 2009 to 2012?

    Cheers
    MeowWong

    ReplyDelete
  6. Hi Wong Catherine, I believe the PCB rates might differ from year to year based on the government policy. Another thing which might affect the PCB, I would assume is your HR policy, at least from my calculation and then what my PCB deduction is.

    ReplyDelete
  7. Hi... can u email me the pcb table for 2012? Thanks ;)

    Email: angelinawsw@hotmail.com

    ReplyDelete
  8. Hi angelina, I've emailed to your account.

    ReplyDelete
  9. I worked in a company for 6mths and noticed every mth they din deduct pcb from my salary. I will leaving the co to another co and now the company want me to do tax clearance before leaving. If I will perform e-filling, do I need do tax clearance? Thought tax clearance is applied for expatriate only?

    ReplyDelete
  10. Some company don't do tax deduction monthly, so you will need to pay one lump sum in this coming tax filing.

    ReplyDelete
  11. Hi Jason,

    Thank you for the informative post.

    May I know based on the two scenarios that you have posted above, what should be the EPF rate on employer portion?

    Kindly enlighten.

    thanks & regards,

    ReplyDelete
  12. Only the EPF portion of the employee is taken into consideration. Because when you do your filing, the RM6,000 is only from your portion.....not including the employer.

    ReplyDelete
  13. can i know the PCB calcuation for bonus izit

    Salary + Bonus + OT Allowance = PCB

    hope u will reply me soon , thx

    ReplyDelete
  14. Hi Anonymous,

    The bonus part will use Bonus + OT. But you still need to give me more information.

    ReplyDelete
  15. My year end bonus income tax is deducted around 25-30% apart from my salary. Can anyone advise me on this deduction.
    pls email me. Tq
    Guhan

    nguhanesan@hotmail.com

    ReplyDelete
  16. Hi guhanesan Navaratnam, I've replied you via email.

    ReplyDelete
  17. Hi Jason, how to calculate for year 2014? Below with link for the rate.
    http://www.hasil.gov.my/goindex.php?kump=5&skum=1&posi=2&unit=5000&sequ=11

    soonlhs@gmail.com

    ReplyDelete
  18. Hi the link you gave is for the tax computation for the whole tax year. I will blog about it in my next post.

    ReplyDelete