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      Guide to PCB Calculation in Malaysia: Monthly Tax Deduction Explained

      Need help with PCB calculation in Malaysia? Discover how MTD is calculated and why PCB deductions could change monthly.

      PCB (Potongan Cukai Bulanan, i.e. Monthly Tax Deduction) is calculated by LHDN’s formula, which tries to estimate your total annual tax liability and then spreads it across your monthly salary. The reason it seems higher at the start of the year comes down to how the calculation is structured:

      Why PCB is higher at the start of the year?

      1. Annualization of Income
      PCB assumes your monthly pay in January will be the same for all 12 months.
      It projects your annual income based only on that first month’s salary.
      At this stage, deductions (like EPF, lifestyle relief, spouse/children relief, zakat, etc.) might not yet be fully reflected.


      2. Limited Reliefs Applied Early
      Many tax reliefs (insurance, donations, education fees, etc.) are only claimed when you file your tax return (e-Filing), not in PCB.
      Unless your employer has keyed in TP1 form declarations, PCB doesn’t consider those yet — leading to a higher deduction.


      3. Bonuses and Adjustments
      If a bonus or additional allowance is paid in the earlier months, PCB spikes because it annualizes that extra amount too.

      Step-by-Step Guide to Checking Accurate PCB Deductions

      1. Gather Required Details

      From the information filled in on BrioHR, note down:

      • Gross monthly salary / wages

      • Bonus or allowances (if any in that month)

      • Employee EPF contribution % (usually 11%)

      • Marital status, number of children (affects reliefs)

      • Any TP1 reliefs declared (insurance, lifestyle, spouse, etc.)

      • AnyTP3 form information filled in (usually for new joiners who have joined in the current year and was previously employed within the same year)

      • Zakat deduction (if applicable)

      2. Go to the Official LHDN PCB Calculator

      3. Input the Details

      In the LHDN calculator, fill in the same values as you have in BrioHR:

      • Monthly income (including fixed allowances)

      • Bonus amount (if applicable in that month)

      • EPF contribution %

      • Marital status & number of children

      • Any TP3 information for new joiners / TP1 reliefs (if declared to employer)

      • Zakat deduction (if any)

      4. Compare the PCB Deduction

      • The calculator will generate the exact PCB deduction for that month.

      • Compare this with the PCB amount shown in the payroll cycle.

      If they match → the system is correctly aligned with LHDN’s formula.
      If there’s a difference → check whether:

      • There are any missed information (TP3 form not keyed in for new joiners).

      • Bonus/allowance was annualized differently.

      • Zakat was not deducted.

      • Wrong EPF % (some employees contribute 9% instead of 11%).

      5. Repeat for Other Months

      1. Since PCB is dynamic and recalculated every month based on YTD income and deductions:

      • Check not just January, but also bonus months, allowance months, or later months after reliefs are added.

      • This way you can confirm that the system is keeping in sync with LHDN.

      Example Scenario

      • Salary = RM 5,000/month

      • EPF = 11%

      • Single, no dependents

      • No TP1, no TP3, no zakat

      1. BrioHR shows PCB in January = RM 110.


      2. Input the same details in LHDN Calculator → result also RM 110.
      Therefore, upon cross-checking, calculation is accurate.


      But if BrioHR shows RM 250, while LHDN shows RM 110, then there seems to be an over-deduction and the information filled in at the employee's profile needs to be rechecked to ensure accurate data is reflected.

      Want to check your tax deductions? Explore our step-by-step article on how to use the LHDN calculator for PCB calculations.

       

      Need Assistance?

      If you have any questions or require assistance, please reach out to our support team via live chat or email us at support@briohr.com.