Understanding PCB (Monthly Tax Deduction)

How monthly tax deductions work and when to pay

What is PCB?

PCB (Potongan Cukai Bulanan) is Monthly Tax Deduction. Your employer deducts tax from your salary every month and pays it to LHDN.

Who pays PCB?

✅ All employees earning taxable income
✅ Employer calculates and deducts automatically
✅ Paid to LHDN by 15th of following month

How is PCB calculated?

Based on your salary
Considers EPF contributions
Uses LHDN PCB calculator
Employer responsible for correct calculation

Important:

✅ PCB is advance tax payment
✅ Still need to file annual tax return
✅ Excess PCB will be refunded
✅ Insufficient PCB must be paid when filing

Important numbers:

LHDN Hotline: 03-8911 1000
Website: hasil.gov.my

Overview

PCB (Potongan Cukai Bulanan) or Monthly Tax Deduction is a pay-as-you-earn system where employers deduct income tax from employees' salaries monthly and remit to LHDN.

Who Must Deduct PCB?

✅ All employers with employees earning taxable income
✅ Applies to Malaysians and foreigners
✅ Includes part-time and contract employees

How PCB is Calculated

Formula:

Determine chargeable income (salary - EPF - reliefs)
Use LHDN PCB calculator or tables
Consider number of months remaining in year
Apply appropriate tax rate

Factors Affecting PCB:

Monthly salary amount
EPF contribution (employee portion)
Tax relief claims (if submitted to employer)
Marital status and number of children

Payment Deadline

Due date: 15th of following month
Example: January PCB due by February 15
Penalty: 10% fine for late payment

Employer Obligations

Calculate correct PCB amount
Deduct from employee salary
Pay to LHDN by deadline
Issue Form EA at year-end showing total PCB paid
Keep records for 7 years

Employee Rights

Receive payslip showing PCB deduction
Receive Form EA at year-end
Claim PCB paid when filing annual tax return
Request refund if excess PCB paid

PCB vs Annual Tax

Aspect	PCB	Annual Tax
When paid	Monthly	Annually (by April 30)
Who pays	Employer deducts	Individual files
Purpose	Advance tax payment	Final tax calculation

Important Contacts

LHDN Hotline: 03-8911 1000
Website: hasil.gov.my
PCB Calculator: Available on LHDN website

Frequently Asked Questions

Is PCB the same as final tax?

No, PCB is monthly advance tax payment. Final tax is calculated when you file annual return. You may get refund if PCB > final tax, or pay more if PCB < final tax.

Can I choose not to have PCB deducted?

No, PCB deduction is mandatory by law. Employers who fail to deduct PCB face penalties. Employees cannot opt out.

What if my employer doesn't deduct PCB?

Report to LHDN immediately. Employer faces penalties for non-compliance. You're still liable for the tax even if employer failed to deduct.

Do I still need to file tax return if PCB is deducted?

Yes, filing is mandatory if income exceeds RM34,000/year (after EPF), regardless of PCB status. PCB is just advance payment.

Last updated: March 2026

Disclaimer: This guide provides general information only. Always verify with official sources for the most current information.