Tuesday, January 19, 2010

How the PCB for bonus is calculated

The Potongan Cukai Bulanan (PCB, a.k.a. Scheduled Monthly Tax Deduction) calculation for bonus is not so straight forward.

Here is how it will be calculated.

Assuming you are not married, your monthly salary is RM4,000, you are contributing 11% from your salary to your EPF savings, and you received 2 months bonus in January 2010.

Salary = RM4,000
EPF deduction = RM440 (maximum total EPF deduction allowed for PCB calculation is only RM500, therefore available balance left is RM500 - RM440 = RM60)
Salary to calculate PCB
= Gross salary - EPF deduction
= RM4,000 - RM440
= RM3,560

PCB 2010 according to table for RM3,560 = RM87

2 months bonus = RM8,000
EPF deduction = RM880
Maximum available EPF deduction for PCB calculation = RM500 - RM440 = RM60
Therefore, the EPF deduction should be RM60 instead of RM880

Bonus to calculate PCB
= Gross bonus - EPF deduction left
= RM8,000 - RM60
= RM7,940

The amount for bonus PCB calculation has a formula like this:
(1/12 x net_bonus) + net_salary

Therefore, amount
= (1/12 x RM7,940) + RM3,560
= RM4,221.67

PCB 2010 according to table for RM4,221.67 = RM194

PCB for bonus = (RM194 - RM87) x 12 = RM1,284

Total PCB for the month
= PCB for salary + PCB for bonus
= RM87 + RM1,284
= RM1,371

Therefore, for the month with bonus:
Gross salary+bonus = RM12,000
EPF contribution from employee @ 11% = RM1,320
EPF contribution from employer @ 12% = RM1,440
SOCSO contribution from employee = RM14.75
SOCSO contribution from employer = RM51.65
PCB deduction = RM1,371
Amount you'll get = RM12,000 - RM1,371 - RM14.75 - RM1,320 = RM9,294.25

Check your payslip for that.

32 comments:

wowowiLLiam said... Reply To This Comment

EPF max allowed is rm500. why use the RM20 and not RM500??

Voyager8 said... Reply To This Comment

Hi wowowiLLiam,

You have to read in detail to know how the RM20 coming from, and that is the formula according to LHDN guidelines.

weixuan said... Reply To This Comment

for 11% EPF deduction of RM4000, shouldn't it be RM440 instead of RM480?

Voyager8 said... Reply To This Comment

Hi weixuan,

Thanks for the correction.

Easy said... Reply To This Comment

May I know the tax calculation of Director fee?

Anonymous said... Reply To This Comment

Hi Vovager8,

Does all the company in Malaysia must be using the SAME formula you show above?

I tried calculate mine, but the value come out doesn't tally with the one appear in my payslip. The total tax amount is having cent value somemore, which I couldn't find it in the PCB table.

Can you advice?

Thanks.

Regards,
S.

Voyager8 said... Reply To This Comment

Hi,

You can ask your HR how it is calculated.

Anonymous said... Reply To This Comment

may i ask u if the income tax for commission in august 2010 did not pay in august, will it penalty? how much is the penalty?

Anonymous said... Reply To This Comment

May I ask, My basic salary only RM700, allowance RM400. But this month I have sales commission RM2300. Did I need to pay PCB? This is a small company. No so call HR department. The boss also don't know. Anyone can help? Thank you in advance.

Anonymous said... Reply To This Comment

I have overtime claim and incentive on that month, should i add into salary for pcb bonus calculation?

Voyager8 said... Reply To This Comment

@Anonymous

Claims with actual receipt is not taxable to you.

For incentive, check with your HR.

Anonymous said... Reply To This Comment

Salary is RM 2,250, EPF is RM 249 & Bonus 2 months RM 4,500 & EPF for bonus is RM 495, it she have to paid PCB?

Voyager8 said... Reply To This Comment

@Anonymous

Yes. And this should be fully managed by HR. She doesn't need to worry about it.

J.TYEo said... Reply To This Comment

www.payroll.my correct or not?

Lindy said... Reply To This Comment

Hi Voyager8,

Would appreciate if you could breakdown my PCB for me? i'd tried so many times but i couldn't get the amount that'd been deducted from my company.

Basic Salary: RM2000.00
Fixed Allowance: RM 400.00
Commission of that month: RM 3869.17
Bonus : RM 6114.00
..............................

EPF Deduction: RM 1320.00
PCB Deduction: RM 1769.00
Socso Deduction: RM 14.75

Hope to hear from you soon!

Voyager8 said... Reply To This Comment

@Lindy

You can get the person who come out with the figures - probably your HR, to explain to you how he/she put that figure in.

Lindy said... Reply To This Comment

@Voyager8 yes i did, but our HR manager told us that the deduction is set in the system and it will deduct automatically, there is soooo many levels and she's unable to breakdown for me manually. that's why i'm hoping that u could help me in this.

hc said... Reply To This Comment

Hi Voyager8
Can I check, if the bonus is generally paid in February, and a pay imcrement is given from March onwards, will it affect the PCB deduction for the bonus month? Thank you

Voyager8 said... Reply To This Comment

@Lindy

Your EPF deduction is 11% of your gross salary.

PCB deduction depends on a few factors, including resident status, marital status, spouse working or not, number of children, etc. You can calculate yourself using the method described above, and the PCB table downloadable with the link above.

Voyager8 said... Reply To This Comment

@hc

By Feb, you haven't get the increment. So it is calculated based on actual salary in the month.

Check your payslip.

hc said... Reply To This Comment

Hi

Thanks very much for your info and help - much appreciated!

HC

fizahradzi said... Reply To This Comment

Hai

in a year, there's overtime & allowance given (basically factory staffs). when it time for bonus, company pay bonus split from monthly salary. does the PCB bonus effect? (because their earning higher now)

Voyager8 said... Reply To This Comment

@fizahradzi

Yes, probably.

Bear in mind that PCB is deducted to help us manage our income tax, so that we don't need to fork out a large amount of money at one time to pay the income tax every year.

PCB will not affect our actual income tax.

If our PCB is over deducted from income tax, we can claim back the excess when filing the tax. If our PCB is under deducted, then we need to fork out extra money to pay LHDN to cover the gap.

Helpneeded said... Reply To This Comment

A good morning to you. Need to clarify on this few things. 1) Bonus paid half mth in Jan n Mar for pcb deduction how we do the calculation ? Suppose the 1 mth bonus need to pay pcb but it split into half then result no get tax in pcb schedule. Kindly advice on this matter. Thanks.. 2) salary increment in Jan but bonus paid as last yr dec salary how will this effect on pcb n our self assessment tax to paid ? Pls advice on this issue as well. Thanks..

Lastly thanks a lot for your kind feedback n guidance in solving this problem..

Voyager8 said... Reply To This Comment

@Helpneeded

Calculation is based on the actual amount you get within that particular month.

Jack Tan said... Reply To This Comment

TQ for your detailed calculation. I have one query.
Do we add wages & bonus and the sum used to refer EPF table or do we refer to EPF individually for bonus & wages than add it together?
Your calculation above shows that you add both together and refer to EPF table but this differs with the method used by another website payroll.my which refer to EPF separately than add it together.
Although most example i tested ended up to be the same figure but some differs. An example you may try is a scenario where the staff's wages is 949.57 and the bonus is 445.40. The EPF contribution differs via the two methods. Plesae share your views.

Voyager8 said... Reply To This Comment

@Jack Tan

I am following the calculation method given my Inland Revenue Board.

elise said... Reply To This Comment

may i know why bonus hv to times with 1/2 and why pcb bonus hv to divide salary ??

Rizal Ara said... Reply To This Comment

Hi,,my salary is 4300 (gross),,on january 2014, the management gave me a letter saying that my bonus will be 6689,,however, I only received 4889,,the income tax deduction on my pay slip says the difference amount was deducted from my bonus as my income tax deduction...?? the diffrences is more than 1000...can this be true?

Voyager8 said... Reply To This Comment

@Rizal Ara

That is too little. You should receive more. Are you sure your bonus is 6689?

Rizal Ara said... Reply To This Comment

yes,,as i mentioned my gross pay is 4300 and i was given 1.5 bonus rate for 2013 performance,,however,, i only received 4889 in my account as bonus,,in my pay slip written that the amount deducted which is about 1500 plus is my monthly income tax deduction...is this possible...??

Edmond Lim said... Reply To This Comment

Hi,voyager,how to calculated is bonus rm 28800 and gross salary is add commission and allowance is rm 4500 and epf deduct 275 and socso donno deduct how much , so my pcb want deduct how much?

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