Finally got an Offer for RM11000..need Tax Help!

Hello Vinds!

I hope that other members will advise you soon.

Harmonie.

vinayd wrote:

Hi Folks,


after a long hiatus of negotiations I have got a final offer of RM 11k per month.

Would like to know what is the tax rate on the amount?

whether the tax is deducted on monthly basis?

how will be my mode of payment(typically I heard that it is via a travel card) as the company for which I'm recruited is Singaporean Co. and they are posting me to a client location in KL

How I can save on my taxes?

Hell this are lot of questions, but very important for me as I earn Rs.90k monthly in India and can save upto 60k per month.

PLease help me with the suggestions before I fly to KL next september.


Cheers
Vinds

Hi tax rates are

on the first 2,500                   0%                   0               
on the next 2,500                   1%                  25               
on the first 5,000                                          25               
on the next 5,000                   3%                  150               
on the first 10,000                                        175               
on the next 10,000                 3%                  300               
on the first 20,000                                        475               
on the next 15,000                 7%                  1,050               
on the first 35,000                                        1,525               
on the next 15,000                 12%                1,800               
on the first 50,000                                        3,325               
on the next 20,000                 19%                3,800               
on the first 70,000                                        7,125               
on the next 30,000                 24%                7,200               
on the first 100,000                                      14,325               
on the next 50,000                 26%                13,000               
on the first 150,000                                      27,325               
on the next 100,000               26%                26,000               
on 250,000                                                  53,325               


so on 11k per month gross you would approx get 9,280 RM per month after a basic personal allowance. It depends but not far off that figure.

Tax year is calender year. If you are non resident flat rate of 26%. You need an acccountabt to file a tax return so cost there. You cant save that much on PAYE.

Nemodot wrote:

vinayd wrote:

Hi Folks,


after a long hiatus of negotiations I have got a final offer of RM 11k per month.

Would like to know what is the tax rate on the amount?

How I can save on my taxes?

Vinds

Hi tax rates are

on the first 2,500                   0%                   0               
on the next 2,500                   1%                  25               
on the first 5,000                                          25               
on the next 5,000                   3%                  150               
on the first 10,000                                        175               
on the next 10,000                 3%                  300               
on the first 20,000                                        475               
on the next 15,000                 7%                  1,050               
on the first 35,000                                        1,525               
on the next 15,000                 12%                1,800               
on the first 50,000                                        3,325               
on the next 20,000                 19%                3,800               
on the first 70,000                                        7,125               
on the next 30,000                 24%                7,200               
on the first 100,000                                      14,325               
on the next 50,000                 26%                13,000               
on the first 150,000                                      27,325               
on the next 100,000               26%                26,000               
on 250,000                                                  53,325               


so on 11k per month gross you would approx get 9,280 RM per month after a basic personal allowance. It depends but not far off that figure.

Tax year is calender year. If you are non resident flat rate of 26%. You need an acccountabt to file a tax return so cost there. You cant save that much on PAYE.

Your answer has confused me. From the above chart it seems that on 11K the tax should be 0+50+50+150+175= 375MYR so 11K - 375= 10625MYR. I understand there is some Employee Benefit deduction as well but still the difference between 10625 and 9280 is alot. How did you came up with this result. Please share your calculation.
Can you please define a resident and a non resident. As far as my knowledge is concern if your 182 days of a calander year in malaysia or even gone to some other place but coz of job requirement based in Malaysia then your consider as Resident. Does a length of your stay in Malaysia or contract type effect resident/non resident status.
Waiting for a quick reply.

nice point a-2-s, the tax deduction is bit complicated then what it seems!

hope some can shed more light on this!

I did some digging myself and came up with certain calculation. There is a PCB (Monthly Income Tax) Chart. It dictates the amount to be charged based on salary. For general idea the calculation goes like this:
Note: This calculation is based on single person if you’re married with kids there is little rebate within the chart (0.25% to 0.5% depending on salary bracket).
Net Salary (RM)       Tax (RM)       Percentage %
5000                           288              5.7
7000                           688         9.8
10000                         1426        14.2
12000                         1946         16.2
15000                         2726        18.2
18000                         3506        19.5
20000                        4026         20.1
Note: EPF (Employee Provident Fund is also deducted maximum deduction being 500RM regardless of income on monthly basis (if income is more than 5000RM, for less income 11% of salary). So add that information in the calculation as well).
For Expats who would move to Malaysia. Regardless of the contract duration, for the first six months a flat tax of 26% would be deducted monthly. The difference of PCB tax and 26% tax for the six month could be claimed at the end of the year.
You can check the 2010 PCB chart from here.
Now some good news, the gov gives some tax relief in certain conditions. Maximum is for married people with kids. Some of the rebate and amount is as following:
Personal tax relief for individual           RM 9000
Wife (Not working)                           RM 3000
Medical Expenses (Serious illness)           RM 5000
Self Higher Education                        RM 5000
Personal Computer (once 3 yr)                 RM 3000
Child Relief (per child) 
Under 18                                        RM 1000
18 and above unmarried studying              RM 4000
   
Detailed information regarding categories and rules for tax relief could be seen here.
I hope the post helps you make a better choice while considering to move to Malayisa.

The taax system in Malaysia is as follows. Every company is required to deduct a certain amount depending on the salary from the employees salary which is called PCB and forward it to the tax department. At the end of the year, you will be given an EA statement from your employee on the total amount of earnings and the total amount of PCB paid. You will have to submit this statement to the income tax office when you do your returns which is usually latest by April. As a first time foreigner, I believe they will deduct a higher amount from you which will be refunded if you work in country for more than 6 months without leaving the country. When you submit your returns which can be done in the form of E_Filing, you are allowed certain exemptions. For individual is RM5,000, then if you have a wife and children, there are also amounts which will be exempted. After your total gross salary deducts all the total amount exempted which will also include any insurance policies, purchase of books etc, the will give you the final figure that you have to pay, then the total amount that has been deducted by your employer. If there is a shortfall, then you will have to pay the difference. If the total deductions is more, then the tax department will give you a refund in the form of a check. a-2-s has given a good explanation with all the exemptions allowed.

Hi Vinds,

Please visit www.hasil.gov.my.(This is the IRB website  - you can view it in English). Under the tab links  - click tax rate.

For the assesment year 2010  - you will be paying RM 14,325 for the first RM 100K of taxable income. Then on every additional dollar you pay 26%.

If you are making RM 11K per month - i think you would be paying a little under RM 20K per annum.

Dont worry about the PCB - which in English means Schedular tax Deductions - when you submit you tax returns - if there is surplus - you normally get the refund within two weeks.

On whether you can save at least 75% of you salary - i am sorry to say that it would be a really really difficult task but it all depends.

On that package - I presume you would want to stay in a decent place - not some shanty. Assuming you are a bachelor - a share flat would cost your about RM 350-500/per month(at the very minimum + something which just passes as decent).

Travelling - budget at least RM 150 per month.

Food - at least RM 300 per month - unless you cook at home.

hope this helps.

cheers,

DA

hello DA,

your food expenses is really low.. I think my budget for food is within RM21 to RM25  per day. or at least RM750 per month..

Hi i deducted personal allowances of 8,000 RM at nil rate. In first year in Malaysia you pay emergency flat rate tax and then try to claim it back!

Hi fellow expats,

I'm offering up a Bahasa Malaysia-English translated PDF document for filing the e-BE Tax Form on EzHasil website.
This could help you to understand the e-BE form better.
Please visit myexpattax.com (copy-paste the link)

Thank you

Hi Vind,

Currently I am also in the similar situation like yours , got an offer of 11k RM and in India I am earning 90k and save around 60k.

So, my question is how much I can save in KL , also I see the post is from 2011. So, did you accepted the offer at that time or not.

Other members please shed some light.

I am in deilmaa should I move or not, because here only if I will switch I will get around 120k per month.

In terms of savings it is beneficial to move to KL.

Waiting for your response.

Thanks

To understand savings check cost of living websites such as Expatistan and Numbeo. They have comparisons city to city.