How to use EA Form Item F to reduce Tax

Staff may have to pay much higher income tax if this entry is not done properly.

Section F in the EA Form is for entering Tax Exempt income. The most common Tax Exempt income is Traveling Allowance for up to RM6,000 followed by Child Care allowance with deduction up to RM2,400.

The traveling allowance is one of the few allowances that does not attract any EPF, SOCSO or EIS and is a very common allowance in many Malaysian companies. Tax exemption may be calculated during the month, but may not be input into Item F of the EA Form especially those using Excel for their payroll. This may result in much higher income tax for the staff.

Only tax exempt allowances / perquisites / gifts / benefits / listed above (No. 1 to 8) are required to declare in Part F of Form EA.

For Example single staff with RM5000 income and RM500 traveling allowance.

  • PCB for RM5500 = 182.50
  • PCB for RM5000 = 130.00
  • Difference per month = 182.50 – 130 = RM52.50

Total amount for 12 months = 52.50 x 12 = RM630.00

Based on the calculations, an employee may pay an excess tax of RM630 if this amount is not filled correctly. may pay excess income tax of  RM600 if this entry is not done properly. The amount will much higher for those with higher income.

For a staff with a monthly income of RM8,000 the excess tax will be RM1,260.

Another example is where the traveling allowance per annum is greater than RM6000. For example if the traveling allowance per month is RM600.

  • Total traveling allowance for 12 months = 600 x 12 = RM7,200
  • Maximum Tax exempt deduction = 6,000
  • Balance traveling allowance = 7200-6000 = 1200

Section F tax exempt amount = RM6000

Section B, Item (c) “Tip kasar, perkuisit, penerimaan sagu hati atau elaun-elaun lain (Perihal pembayaran: ” = RM1200




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