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.

PCB 2010 income tax deduction rate

For your information, the Inland Revenue Board of Malaysia (a.k.a. Lembaga Hasil Dalam Negeri, LHDN) has come out a new Potongan Cukai Bulanan (PCB, a.k.a. Scheduled Monthly Tax Deduction) 2010 rate.

The monthly salary deduction amount, across all taxable income categories, is now slightly lesser than the previous PCB 2009 rate.

According to the previous 2009 rate, unmarried person earning monthly income of RM2,401 and above will be taxable, and the PCB deduction for them is RM13.

With the new 2010 rate, unmarried person will be taxable only when their monthly income exceeding RM2,451, and the PCB deduction for them is RM10 (previously was RM16 under PCB 2009).

Click here to download the new Jadual PCB 2010 schedule table.

Click here to download the previous Jadual PCB 2009 schedule table.

You might probably be interested to read about:

• How the PCB for bonus is calculated 

Redbook pamphlet: know your rights when stopped by police

When you are stopped or visited by somebody who claims to be police, how should you identify if the person is an authorized police or a faked one? What should you respond and what is your basic rights?

The Malaysian Bar (Badan Peguam Malaysia) published the famous Red Book: Police and Your Basic Rights (Polis Dan Hak-hak Asas Anda) in 2006 to inform citizens and non-citizens in Malaysia of their basic rights vis-à-vis the police.

Further to the overwhelming respond to the Red Book, they've then produced a 2 pages Redbook Pamphlet that outlines the powers of the police in relation to arrests, body searches and the remand process, and the public’s rights when stopped and questioned, and during detention.


The flowchart below is produced based on the information regarding public’s rights when stopped and questioned by police.
 

Make sure you ask for the Police Authority Card (Kad Kuasa Polis) from the officer when stopped. There are 4 different possible colours:

• Blue: Rank of Inspector and above
• Yellow: Below the rank of Inspector
• White: Reserve police
• Red: Suspended Police Officer. He has no authority to do anything to you. Walk away.

Here is how the blue and yellow cards look like...

Click here to download the Redbook pamphlet from Malaysian Bar (English).
Click here to download the Redbook pamphlet from Malaysian Bar (Malay).