PCB (Potongan Cukai Bulanan) Malaysia: Income Tax Guide 2026

Updated on 13 March 2026 in Business | Suki Bajaj

Managing payroll is one of the trickiest parts of running a business, particularly when you're trying to figure out the intricacies of PCB (Potongan Cukai Bulanan) in Malaysia.

This guide will walk you through everything you need to know, from calculations to submissions and payments, ensuring you stay compliant with the latest regulations.

Key Takeaways:

PCB is Malaysia’s Monthly Tax Deduction system for employees.
Employers are legally required to calculate and deduct PCB from their employees' salaries and remit it to the Inland Revenue Board of Malaysia (LHDN).
PCB helps employees pay their income tax in smaller, manageable installments, preventing a large lump-sum payment at the end of the year.
Accurate PCB calculation is essential for payroll compliance and to avoid penalties.
Automating PCB with payroll software like QuickHR can simplify deductions and ensure timely, accurate reporting.

In this guide, we’ll talk about:

Key Takeaways
What is PCB (Potongan Cukai Bulanan) in Malaysia and Why Is It Important?
PCB Submission and Payment Deadlines
Penalties for Late or Incorrect PCB Submission
Frequently Asked Questions (FAQ)
How Payroll Software Can Automate PCB Deduction
Simplify PCB (Potongan Cukai Bulanan) in Malaysia with QuickHR

What is PCB (Potongan Cukai Bulanan) in Malaysia and Why Is It Important?

Potongan Cukai Bulanan, or PCB, is Malaysia's monthly tax deduction system where employers deduct a portion of their employees' salaries each month to remit directly to the Inland Revenue Board of Malaysia (LHDN).

The main purpose of PCB is to ease the financial burden on employees by spreading out their yearly income tax payments. For employers, understanding and properly implementing PCB is a legal obligation.

Simplify Your Payroll and Tax Compliance in Malaysia

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Who Needs to Deduct PCB?

All employers in Malaysia are required to deduct PCB from the salaries of their eligible employees. This applies to all types of employees—local, foreign, and part-time—as long as their income exceeds the tax threshold.

How Is PCB Calculated in Malaysia?

PCB (Potongan Cukai Bulanan) tax calculation doesn’t have a one-size-fits-all formula. It depends on several factors that affect an employee’s taxable income and tax reliefs. These include:

Total Monthly Remuneration: This includes basic salary, bonuses, commissions, and allowances.
EPF Contribution: Mandatory EPF contributions are factored into taxable income calculations.
Marital Status & Dependents: An employee's marital status and the number of children or dependents they have can increase their tax reliefs, lowering the PCB amount.
Other Tax Reliefs: Employees may claim other reliefs for things like education fees, lifestyle expenses, or medical costs.

For example, a single employee earning RM5,000 with a standard EPF contribution would have a different PCB amount than a married employee with two children earning the same salary.

To ensure accuracy, employers can use the Official PCB Income Tax Rate Table 2025 or LHDN's online PCB calculator.

PCB Submission and Payment Deadlines

As an employer, you are responsible for submitting both the PCB data (via Form CP39) and the payment to LHDN.

The deadline for PCB submission and payment is the 15th day of the following month. For instance, PCB deducted from August payroll must be remitted by September 15th.

Penalties for Late or Incorrect PCB Submission

It’s important to ensure accurate PCB tax calculations and submit payments on time. LHDN imposes strict penalties for non-compliance, including:

Fines of up to RM20,000 or imprisonment for late submissions.
A 10% penalty on any outstanding PCB amount, with additional penalties for continued late payment.
Risk of a tax audit, which can uncover further discrepancies and lead to more severe consequences.

Frequently Asked Questions (FAQ)

Is PCB mandatory for all employees?

Yes PCB (Potongan Cukai Bulanan) is mandatory, for all employees whose monthly income exceeds the minimum threshold set by LHDN.
What happens if an employer does not deduct PCB?

The employer is liable for the full PCB amount, plus a 10% penalty, and can face legal action.
Can employees request lower PCB deductions?

Employees can submit a TP1 form to claim additional tax reliefs and rebates, which can lower their PCB. Employers must process these forms accordingly.
What’s the difference between PCB and CP500?

PCB is the monthly tax deduction for salaried employees, while CP500 is a half-yearly tax installment for individuals with non-employment income (e.g., business income).

Frequently Asked Questions (FAQ)

Yes PCB (Potongan Cukai Bulanan) is mandatory, for all employees whose monthly income exceeds the minimum threshold set by LHDN.

The employer is liable for the full PCB amount, plus a 10% penalty, and can face legal action.

Employees can submit a TP1 form to claim additional tax reliefs and rebates, which can lower their PCB. Employers must process these forms accordingly.

PCB is the monthly tax deduction for salaried employees, while CP500 is a half-yearly tax installment for individuals with non-employment income (e.g., business income).

How Payroll Software Can Automate PCB Deduction

Manual PCB tax calculations are prone to higher risks of human error, especially for businesses managing a large workforce or a growing team. This is why many HR professionals in Malaysia are adapting payroll software for PCB Malaysia that simplifies the entire process.

Payroll solutions like QuickHR offer an automated PCB (Potongan Cukai Bulanan) tax deduction system in Malaysia that helps you:

Auto-calculate PCB: Automatically factors in all the necessary variables like salary, EPF, marital status, and dependents.
Compliance Assurance: Regularly updated with the latest LHDN regulations for full compliance.
Integration: Seamlessly integrates with other statutory deductions like EPF, SOCSO, and EIS, providing full payroll compliance in Malaysia – all in one system.
Detailed Reporting: Generate all necessary reports and documentation for compliance and auditing.

Simplify PCB (Potongan Cukai Bulanan) in Malaysia with QuickHR

Managing payroll and navigating Malaysian tax regulations are one of the toughest challenges for businesses of all sizes. To help you overcome these hurdles, QuickHR, an LHDN-approved HRMS software, streamlines the entire process for all your payroll needs.

From generating payslips to handling custom payroll components like bonuses and allowances, QuickHR simplifies every part of your payroll process.

QuickHR also integrates with your existing accounting platforms, like QuickBooks Online and Xero, ensuring all your data is in sync and accurate.

By automating your payroll with QuickHR, you can ensure full compliance, reduce manual work, save more time to focus on your core business. Book a free demo or contact us to learn more.