PCB Calculations are the most asked support question we get at Actpay. Many customers receive very unexpected results and query our software calculations. Although our calculations have always been correct, it often takes very long to explain how the PCB calculation are done. In this article we will explain the basic foundations of PCB calculations and why some results that seem wrong, but are actually right.
This article answers the following questions.
- Basics of PCB Calculations
- 3 different ways to calculate PCB
- Special formulas to handle Additional Remuneration and Bonus
- Why it is important to use Additional Remuneration where needed
- Complete Guide and explanation of 3 PCB Calculation Methods
- Differences in Manual PCB Calculations for those not using Software
The following calculations are based on the Updated PCB Calculation Table for 2023.
From the LHDN website at : https://www.hasil.gov.my/en/employers/mtd-payment/
MTD is determined either by using the Computerized Payroll Calculation Method or e-Jadual PCB via e-CP39 on the IRBM website.
Submission of MTD Statement can be made through e-Data PCB / e-PCB / eCP39 which is provided for free on the official portal of IRBM @ www.hasil.gov.my (MyTax> ezHasil Services).
PCB Calculation Table 2024
| P (RM) | M (RM) | R (%) | B Category 1 & 3 (RM) | B Category 2 (RM) |
| 5,001 – 20,000 | 5,000 | 1 | – 400 | – 800 |
| 20,001 – 35,000 | 20,000 | 3 | –250 | –650 |
| 35,001 – 50,000 | 35,000 | 6 | 600 | 600 |
| 50,001 – 70,000 | 50,000 | 11 | 1,500 | 1,500 |
| 70,001 – 100,000 | 70,000 | 19 | 3,700 | 3,700 |
| 100,001 – 400,000 | 100,000 | 25 | 9,400 | 9,400 |
| 400,001 – 600,000 | 400,000 | 26 | 84,400 | 84,400 |
| 600,001 – 2,000,000 | 600,000 | 28 | 136,400 | 136,400 |
| Exceeding 2,000,000 | 2,000,000 | 30 | 528,400 | 528,400 |
Understanding PCB Calculations
To explain the basics of PCB calculations we will use the following example based on a question asked on Facebook.
The following has been edited to simplify the question.
“I am earning eg. RM5,000 a month (x12 , total of RM60,000 /pa – inclusive of car allowance) and expected *incentive of about another RM60,000 /pa , when achieved, paid out quarterly”
My quick answer was “Your PCB will increase every quarter. PCB is based on ytd income” which turned out to be wrong on actual testing. Common sense often fails in predicting PCB results. This is a good example to understand the basics of PCB calculations.
Method 1 : PCB Calculations based on Quarterly Incentive treated as Monthly Income.
| Mth | Basic Pay | Incentive | Gross Pay | Net Income | Net PCB |
| 1 | 5,000.00 | – | 5,000.00 | 4,305.35 | 110.00 |
| 2 | 5,000.00 | – | 5,000.00 | 4,305.35 | 110.00 |
| 3 | 5,000.00 | 15,000.00 | 20,000.00 | 14,422.35 | 3,343.00 |
| 4 | 5,000.00 | – | 5,000.00 | 4,415.35 | – |
| 5 | 5,000.00 | – | 5,000.00 | 4,415.35 | – |
| 6 | 5,000.00 | 15,000.00 | 20,000.00 | 14,538.60 | 3,226.75 |
| 7 | 5,000.00 | – | 5,000.00 | 4,415.35 | – |
| 8 | 5,000.00 | – | 5,000.00 | 4,415.35 | – |
| 9 | 5,000.00 | 15,000.00 | 20,000.00 | 14,800.25 | 2,965.10 |
| 10 | 5,000.00 | – | 5,000.00 | 4,415.35 | – |
| 11 | 5,000.00 | – | 5,000.00 | 4,415.35 | – |
| 12 | 5,000.00 | 15,000.00 | 20,000.00 | 16,370.20 | 1,395.15 |
| Total | 60,000.00 | 60,000.00 | 120,000.00 | 95,234.20 | 11,150.00 |
Above calculations have been verified using LHDN online calculator at http://calcpcb.hasil.gov.my/
There are 3 unexpected points to note in the above calculations.
- Zero PCB for months 4,5,7,8,10 and 11.
- Quarterly PCB decreases every month.
- Big drop in PCB in month 12.
The first point to understand is that computerised and E-PCB calculations are based on Year to Date (YTD) income.
To test the accuracy of the PCB calculation, calculate the PCB for December using 120,000 as the total gross income. This will show what is the Annual tax for this gross income.
In other words calculating the same amount month by month and calculating the total in the month of December will give the same result because PCB calculations are based on total income for the year.
Following is the calculation based on 120,000 paid as one lump sum in December. Note that the total Annual PCB for PCB based on monthly calculations and one lump sum in December is exactly the same at RM 11,500.
Note that the total must be calculated in December. The results will be wrong if calculated on any other month.
Limited time offer.
Valid till November 30, 2024
Fast and Easy
- Download and Setup the payroll Software
- Add Allowances and Deductions
- Start using payroll immediately
Method 2 : PCB Calculations based on Annual Income
| 1. MTD to yearly net remuneration exclude the additional remuneration: | TOTAL (RM) | ||
| Y1 = Current month’s normal remuneration; | 120,000.00 | ||
| K1 = Contribution to EPF or Other Approved Funds paid subject to total qualifying amount for current month’s remuneration not exceeding RM4,000.00 per year; | 4,000.00 | ||
| D = Deduction for individual; | 9,000.00 | ||
| Q = Deduction for eligible Children | 2,000.00 | ||
| P | = | [∑(0.00-0.00)+(120,000.00-4,000.00)+[(0.00-0.00) x 0] + (0-0)]-(9000.00+0.00+0.00+0.00+(2000 x 0)+0.00+0.00) | 107,000.00 |
| M | = | Amount of first chargeable income for every range of chargeable income a year; | 100,000.00 |
| R | = | Percentage of tax rates; | 0.25 |
| B | = | Amount of tax on M less tax rebate for individual and spouse (if qualified); | 9,400.00 |
| Yearly Tax | = | [(107,000.00-100,000.00)x 0.25 + (9,400.00 ) -( 0.00 + 0.00 )]/(0 +1) = 11,150.00 | 11,150.00 |
Explanation of PCB calculations.
1. Reason for Zero PCB for months 4,5,7,8,10 and 11
When calculating PCB, the system estimates the annual income and calculates the portion for the current month. For example, for January, the system calculates PCB for 60,000 (5,000 x 12) and divides it by 12 for one month. That is why month 1 and 2 have the same PCB.
In month 3 it calculates for
– 10,000 (5,000 x 2) + (20,000 x 10) = 210,000.
Of course this is not the expected annual income for this staff. In other words, PCB was overpaid for the month of March. Therefore PCB for month 4 and 5 is zero because it is deducted from the overpaid amount because PCB calculations are based on YTD income.
2. Quarterly PCB decreases every month.
The reason for the decreasing value is because the estimated annual income decreases every quarter. Therefore
– month 6 is 20,000 (5,000 x 4) + 160,000 (20,000 x 8) = 180,000
and
– month 9 is 30,000 (5,000 x 6) + 120,000 (20,000 x 6) = 150,000
and
– month 12 is 40,000 (5,000 x 8) + 80,000 (20,000 x 4) = 120,000.
As can be seen the estimated annual income is lower as the months increase. Note that month 12, 120,000 is the correct annual income.
3. Big drop in PCB in month 12.
We finally come to month 12. In the previous months, excess PCB was deducted against the monthly PCB of 130.00. Since it is the final month, all the balance excess PCB paid is deducted so that the total PCB paid for the year is based on the actual annual income of 120,000.
Method 3 : PCB Calculations using Additional Remuneration
| Mth | Basic Pay | Incentive | Gross Pay | Net Income | Net PCB | Add PCB | Basic PCB |
| 1 | 5,000.00 | – | 5,000.00 | 4,305.35 | 110.00 | – | 110.00 |
| 2 | 5,000.00 | – | 5,000.00 | 4,305.35 | 110.00 | – | 110.00 |
| 3 | 5,000.00 | 15,000.00 | 20,000.00 | 16,155.35 | 1,610.00 | 1,500.00 | 110.00 |
| 4 | 5,000.00 | – | 5,000.00 | 4,305.35 | 110.00 | – | 110.00 |
| 5 | 5,000.00 | – | 5,000.00 | 4,305.35 | 110.00 | – | 110.00 |
| 6 | 5,000.00 | 15,000.00 | 20,000.00 | 15,445.35 | 2,320.00 | 2,210.00 | 110.00 |
| 7 | 5,000.00 | – | 5,000.00 | 4,305.35 | 110.00 | – | 110.00 |
| 8 | 5,000.00 | – | 5,000.00 | 4,305.35 | 110.00 | – | 110.00 |
| 9 | 5,000.00 | 15,000.00 | 20,000.00 | 14,805.35 | 2,960.00 | 2,850.00 | 110.00 |
| 10 | 5,000.00 | – | 5,000.00 | 4,305.35 | 110.00 | – | 110.00 |
| 11 | 5,000.00 | – | 5,000.00 | 4,305.35 | 110.00 | – | 110.00 |
| 12 | 5,000.00 | 15,000.00 | 20,000.00 | 14,385.35 | 3,380.00 | 3,270.00 | 110.00 |
| 60,000.00 | 60,000.00 | 120,000.00 | 95,234.20 | 11,150.00 | 9,830.00 | 1,320.00 |
This correct way of calculating PCB is to classify the Incentive as Additional Remuneration. Based on LHDN guidelines the income should only be classified as “Additional Remuneration” if it is once a year or possibly twice as in the case of Bonus.
The importance of using this method is because if the staff resigns, in the previous calculation, the staff has overpaid their PCB.
In the above example, if the staff resigns on March 31st, the total PCB using the first method is :
110 + 110 + 3,343 = 3,563
Using Method 2, the total PCB is :
110 + 110 + 1,610 = 1,830
Note that despite a different calculation method, the total PCB for the year is still the same for all 3 methods.
Unlike Basic income, Additional remuneration is calculated differently. Instead of tax based on annual income of
– 10,000 (5,000 x 2) + (20,000 x 10)
it is calculated based on
– (5,000 x 12) + 15,000 = 75,000.
and
– (5,000 x 12) + 30,000 = 90,000.
and
– (5,000 x 12) + 45,000 = 105,000.
and
– (5,000 x 12) + 60,000 = 120,000.
Compared to method 1, there are no months with zero PCB. PCB is paid every month because the full tax for the incentive for the year is already paid based on fixed basic income.
Also, instead of PCB decreasing every month, PCB increases every month. Total tax for the basic + incentive increases as the year to date income increases with each month. The taxis based on what has been currently earned and not an estimate of future income.
Method 4 : PCB Calculations using E CP39 as Normal Remuneration
E CP39 portal is provided by LHDN for those who do not use computer software or E-PCB. E CP39 PCB calculations are based on monthly income and not annual income. Following is the table of monthly calculations based on E-CP39 where the additional income is treated as commission.
As the calculation is based on monthly income, the PCB value is the same for every month with same gross income.
Note that the total annual PCB using this method is RM14,597.40 compared to total PCB of RM11,150 based on Annual income, an excess of RM3,447.40. This excess should be refunded by LHDN.
| Mth | Basic Pay | Commission | Gross Pay | Net Pay | Net PCB |
| 1 | 5,000.00 | – | 5,000.00 | 4,305.30 | 110.05 |
| 2 | 5,000.00 | – | 5,000.00 | 4,305.30 | 110.05 |
| 3 | 5,000.00 | 15,000.00 | 20,000.00 | 14,336.10 | 3,429.25 |
| 4 | 5,000.00 | – | 5,000.00 | 4,305.30 | 110.05 |
| 5 | 5,000.00 | – | 5,000.00 | 4,305.30 | 110.05 |
| 6 | 5,000.00 | 15,000.00 | 20,000.00 | 14,336.10 | 3,429.25 |
| 7 | 5,000.00 | – | 5,000.00 | 4,305.30 | 110.05 |
| 8 | 5,000.00 | – | 5,000.00 | 4,305.30 | 110.05 |
| 9 | 5,000.00 | 15,000.00 | 20,000.00 | 14,336.10 | 3,429.25 |
| 10 | 5,000.00 | – | 5,000.00 | 4,305.30 | 110.05 |
| 11 | 5,000.00 | – | 5,000.00 | 4,305.30 | 110.05 |
| 12 | 5,000.00 | 15,000.00 | 20,000.00 | 14,329.10 | 3,429.25 |
| 60,000.00 | 60,000.00 | 120,000.00 | 91,779.80 | 14,597.40 |
Method 5 : PCB Calculations using E CP39 as Additional Remuneration
Additional remuneration is calculated on a different formula. Based on this formula, there is actually a reduction in the annual PCB paid. This is because the PCB for additional remuneration is based on the current month is less than computed for annual income.
The total annual PCB using this method is only RM7,336.40 compared to total PCB of RM11,150 based on Annual income, an shortfall of RM3,813.60. Although these calculations are legal based on LHDN guidelines, this shortfall has to be paid probably through CP38 deduction.
Note that PCB for Basic Pay of RM5,000 and Additional Remuneration is RM1,614 based on E-PCB calculated in January. Note that E-CP39 PCB calculations will give the same result as computerised or E-PCB PCB Calculations in January.
E-CP39 calculates the months PCB by assuming that the annual income is equal to (current monthly income) x 12. E-PCB PCB calculation is based on (total of YTD income for the month) + ((current month income) x (12 – current month))
| Mth | Basic Pay | Incentive | Gross Pay | Net Income | Net PCB | Add PCB | Basic PCB |
| 1 | 5,000.00 | – | 5,000.00 | 4,305.30 | 110.05 | – | 110.02 |
| 2 | 5,000.00 | – | 5,000.00 | 4,305.30 | 110.05 | – | 110.02 |
| 3 | 5,000.00 | 15,000.00 | 20,000.00 | 16,151.35 | 1,614.00 | 1,503.96 | 110.02 |
| 4 | 5,000.00 | – | 5,000.00 | 4,305.30 | 110.05 | – | 110.02 |
| 5 | 5,000.00 | – | 5,000.00 | 4,305.30 | 110.05 | – | 110.02 |
| 6 | 5,000.00 | 15,000.00 | 20,000.00 | 16,151.35 | 1,614.00 | 1,503.96 | 110.02 |
| 7 | 5,000.00 | – | 5,000.00 | 4,305.30 | 110.05 | – | 110.02 |
| 8 | 5,000.00 | – | 5,000.00 | 4,305.30 | 110.05 | – | 110.02 |
| 9 | 5,000.00 | 15,000.00 | 20,000.00 | 16,151.35 | 1,614.00 | 1,503.96 | 110.02 |
| 10 | 5,000.00 | – | 5,000.00 | 4,305.30 | 110.05 | – | 110.02 |
| 11 | 5,000.00 | – | 5,000.00 | 4,305.30 | 110.05 | – | 110.02 |
| 12 | 5,000.00 | 15,000.00 | 20,000.00 | 16,144.35 | 1,614.00 | 1,503.96 | 110.02 |
| 60,000.00 | 60,000.00 | 120,000.00 | 99,040.80 | 7,336.40 | 6,015.84 | 1,320.24 |
Actpay
CHAT NOW
Our Online Chat is available live from 9.30am to 5pm on Week days.
Click to Chat with us now.
