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How to Set Tax Resident and Non-Tax Resident Status in Malaysia
In Malaysia, all employees are classified into two tax residency categories: Tax Resident and Non-Tax Resident. Each category has different implications for income tax deductions.
- Tax Resident individuals are subject to income tax based on a progressive tax rate if their total taxable income exceeds the threshold value.
- Non-Tax Resident individuals are taxed at a flat rate of 30%, regardless of their taxable income.
NOTE:
For more details on the definitions of Tax Resident and Non-Tax Resident, please refer to the official LHDN website or contact LHDN directly.
How to Set Tax Resident and Non-Tax Resident Categories
Navigate to the Employee List and open the employee's profile.
- Click on Payroll within the profile page.
- Go to General Payroll Information and click the pencil icon to edit.
- Locate the field labeled "Are you a tax resident?"
- Select Yes if the individual is a tax resident.
- Select No if the individual is a non-tax resident.
- Click Save
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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.