PCB stands for Potongan Cukai Bulanan, which means Monthly Tax Deduction. It’s a system used by the Lembaga Hasil Dalam Negeri (LHDN) to collect income tax from salaried employees in Malaysia. If you’re an employee, your employer will deduct a portion of your monthly salary and pay it directly to LHDN on your behalf. This deduction is an advance payment of your annual income tax. So, instead of paying your entire income tax in one lump sum at the end of the year, you pay it monthly through PCB.
Keypoints
- Mandatory for employers: Employers must calculate and deduct PCB every month using LHDN’s official PCB schedule or calculator.
- Covers various incomes: PCB includes wages, bonuses, overtime, commissions, allowances, and other employment-related income.
- Based on estimated annual income: The amount deducted is based on your estimated annual earnings, marital status, number of children, EPF contributions, and other reliefs.
Example
If you earn RM4,000/month and are single, your employer may deduct around RM50–RM100 per month. Amount varies depending on your reliefs and contributions. Over 12 months, you would’ve already prepaid part or all of your tax.
Due dates
- Employers must remit PCB payments to LHDN by the 15th of the following month. PCB for March salary must be paid to LHDN by 15 April.
- If employers fail to make payment by the due date, LHDN may impose:
- A 10% penalty on the unpaid amount
- Additional penalties will be imposed for repeated offenses or non-compliance. This applies even if the deduction was made from the employee’s salary, the employer is responsible for sending it to LHDN.
You may refer here.