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.