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SCHEDULE OF MONTHLY TAX DEDUCTION (for the employer who does not use computerised payroll software)

LIST OF SOFTWARE PROVIDER/EMPLOYER WHO COMPLIED WITH THE MTD CALCULATION SPECIFICATION :

MTD 2016:

MTD 2015:

MTD 2014:

MTD 2013:

Employer's Responsiblities

Employer's responsibilities under the MTD Rules are as follows:

  1. Deduct the MTD from the remuneration of employee in each month or the relevant month in accordance with the Schedule of Monthly Tax Deductions or Computerised Calculation Method and pay to the Director General.

  2. Make additional deductions from employee's remuneration in accordance with the direction given by the Director General under Rule 4 of MTD Rules.

  3. Employer shall pay to the Director General, not later than the fifteen day of every calendar month, the total amount of tax deducted or should have been deducted by him from the remuneration of employees during the preceding calendar month.

  4. Furnish a complete and accurate employee?s information of the following in a return when submitting MTD payments/additional deductions:

    1. income tax number (if any);
    2. name as stated on identity card or passport;
    3. new and old identity card number/police number/army number or passport number (for foreign employee); and
    4. MTD/additional deductions amount.

If the employer fails to furnish a complete and accurate information, MTD payment will not be accepted. Resubmission of MTD payment may be compounded if payment is made after the fifteen day of the following month.

  1. To furnish information on cessation of payment of employees? remuneration as required under Rule 13, MTD Rules in a prescribed form.

  2. Keep and retain in safe custody sufficient documents for a period of seven years from the end of the calendar year in which the remuneration is deducted in respect of his employee according to the MTD Rules.

  3. Inform every employee of his following responsibilities:

    1. to submit a TP3 Form to the employer to notify information relating to his employment with previous employer in the current year.
    2. to submit a TP1 Form to the employer if employee wishes to claim deductions and rebates in the relevant month. The deductions and rebate will be effected subject to approval by employer.
    3. to submit a TP2 Form if employee wishes to include benefits in kind (BIK) and value of living accommodation (VOLA) as part of his monthly remuneration in ascertaining the MTD amount subject to approval by employer.
    4. to keep and retain in safe custody each and every receipt relating to claims of deductions for a period of seven years from the end of that year of assessment under the Act.
    5. to furnish complete and accurate personal information and update any changes of his personal particulars to the employer.
    6. to furnish correct information in a prescribed form relating to his own chargeability to tax and failure by the employee to do so constitutes an offence under paragraph 113(1)(b) of the Act.

  4. Pursuant to section 75A of the Act, directors of controlled companies are responsible for unpaid MTD under the MTD Rules.

Schedule of Monthly Tax Deductions

Schedule of Monthly Tax Deductions is issued by Inland Revenue Board of Malaysia (IRBM) for employer who does not use computerised payroll software.

Employee Category

Schedule of Monthly Tax Deductions and the Computerised Calculation Method classifies employee into 3 categories:

Category 1 : Single
Category 2 : Married and spouse is not working
Category 3 : Married and spouse is working

Category 3 of the Schedule of Monthly Tax Deductions or the Computerised Calculation Method is applicable where an employee is divorced, widowed or a single (with adopted children).

Where a wife who elects to claim all child deductions, her MTD is ascertained under Category 3 (KA1 ? KA20) while MTD for the husband is ascertained under Category 3 (K).

Where a husband and wife elect to claim deduction for certain child, MTD for husband and wife is ascertained under Category 3 (KA1 ? KA20).

Example :

A working husband and wife with 5 children. The husband claims child deduction for their 3 children and the wife claims for the remaining 2 children. MTD is ascertained as follows:

Husband - Category 3 (KA3)
Wife - Category 3 (KA2)

MTD is ascertained under Category 3 (KA1 ? KA20) for an employee who is single with an adopted child.

MTD for Monthly Remuneration

Before MTD can be determined, an employer must take into account 3 factors relating to his employee. The factors are :

  • Total monthly remuneration
  • Marital status
  • Number of children
  1. MTD computation method using schedule MTD.

    Employer whose compute PCB using the schedule of MTD shall base on gross taxable remuneration less EPF (inclusive EPF for non taxable remuneration/allowance) limited to RM500 per month if the actual deduction exceeds RM500.

    Example 1 :

    An employee receives a monthly remuneration amounting to RM10,000. EPF deduction is RM1,100.

    Determination of remuneration subject to MTD is as follows :

    Monthly remuneration

    RM10,000

    Less : EPF allowed to be deducted

    RM 500

    Net remuneration subject to MTD

    RM 9,500


    The following example can be a guide to determine the value of MTD to be deducted from an employee

    according to category under the MTD Schedule.

    Example 2:

    An employee receives a monthly remuneration amounting to RM4,000 (EPF deduction : RM440). So, the net remuneration he receives is RM3,560.

    Example 3:


    An employee is married and wife is not working. They do not have children. Total monthly remuneration received is RM25,000. (EPF deduction : RM2,750). So, the net remuneration he receives is RM24,500.

  2. MTD computation method using computerised calculation method.

Employer whose compute PCB using the computerised calculation method, such as ?Kalkulator PCB?, e-PCB, computerised payroll system, or inhouse/customise payroll system which had verified by IRBM shall base on gross taxable remuneration less total contribution monthly EPF (inclusive EPF for non taxable remuneration/allowance) limited to RM6,000.

Example 4:


An employee receives a monthly remuneration amounting to RM11,000 (EPF deduction : RM1,210). So, the net remuneration he receives under computerised calculation method is RM9,790 (RM11,000 ? RM1,210).

For month of May, EPF contribution that employee could claim should be RM1,160 [RM6,000 ? (RM1,210 x 4 month) due to accumulated EPF for the month of May is RM 4,840(RM1,210 x 4 month). For computerised calculation method, formula/system is default to restrict the EPF contribution and lifeinsurance claim by employee is not more than RM6,000.

From month of June onward , employee is not allow to claim deduction for EPF and life insurance due to the accumulated EPF is RM6,000.

Example 5:
An employee receives a monthly remuneration amounting to RM4,000 (EPF deduction : RM440). So, the net remuneration he receives is RM3,560.

Filling Up MTD Form (CP39/CP39A)

An employer should give complete and accurate information about his employees when making MTD payments. The information required is as follows:

    1. Employee's income tax number (if any);
    2. Employee's full name as stated in identity card or passport;
    3. Identity card number (Old and New) or Police Number or Army Number;
    4. Passport number and country code for foreigner; and
    5. MTD amount.

The MTD payment will be rejected by IRBM if employer fails to provide complete and accurate information. Resubmission of MTD payment will be subject to compound if the payment is made after the due date.

    1. Form CP39 is for normal MTD, bonus and director?s fee paid for current month and/or CP38 instruction.
    2. Form CP39A is for arrears payment for remuneration/allowance and other types of payment for previous year.

    Use separate CP39 if payment is made for different months.

Filling Up Form CP39

This information enables you to fill the form correctly.

  1. Deduction for Month/Year

    Fill in Month and Year using numbers only.

    Example: Deduction for September, 2010, fills in as follow:

    Month column: 09

    Year column: 2010

  2. Employer's Information

    1. E Number : Fill in the employer's tax number using10 digits.

      Example :

      E 908915-10 - fill in as 0090891510

      E 3943914-03 -fill in as 0394391403

      E 90001541-01 - fill in as 9000151401

    2. Company/Business Name
      • Fill in company's full name.

    3. Company/Business Address.
      • Fill in company's full address (including postcode).

    4. Company Registration Number
      • Fill in company's registration number.

  3. Payment Information

    1. Total deduction
      • Fill in total MTD deduction made and total CP38 deduction (if any).

    1. Total employees
      • Please enter the number of employees subject to MTD and the number of employees subject to CP38 deduction (if any).

    2. Amount
      • Fill in value of cheque.

    3. Number
      • Refers to cheque number.

    4. Bank Branch
      • Refers to bank branch of cheque.

    5. Date
      • Fill in cheque date using numbers.
      • Example : 3rd October 2006 - fill in as 03.10.2006

  4. Officer Filling the Form

    1. Signature
      • Signature of officer filling the form.

    2. Full Name
      • Full name of officer filling the form.

    3. Identity Number
      • Identity number of officer filling the form.

    4. Designation
      • Designation of officer filling the form.

    5. Telephone Number
      • Company's telephone number.

  5. Information on Employees

    1. Number
      • Fill in the record number according to sequence.

    1. Income Tax Number
      • Leave blank this item if the employee does not have an income tax number. Employer can attach Form CP22 or Form In Lieu of CP39 together with Form CP39 when make MTD payment.
      • For employees who have an income tax number, fill in the number in this item.
      • Example : SG 1234567-08(0)

      1. Employee's Full Name
        • Fill in employee's name as per Identity Card or Passport.
        • Employees not subject to monthly deduction need not be included in list.

      2. Old Identity Card Number
        • Fill in the old identity card number for local employees (if any).

      3. New Identity Card Number
        • Fill in the new identity card number for local employees, without the dash.

      4. Employee's Number
        • Fill in employee's number or employee's salary number, if any.

      5. Passport Number
        • This item to be filled in for foreign employees only. Fill in employee's passport number.

      6. Country Code
        • To be filled up if the employee is a foreigner.

      7. MTD
        • Fill in the amount according to the Scheduler Tax Deduction schedule.

      8. CP38
        • Fill in the amount of tax deduction according to the CP38 Form.
        • If there is no deduction, leave this item blank.

Filling Up Form CP39A (Arrears payment for prior years received in current year)

This information enables you to fill the form correctly.

  1. Deduction for Month/Year

    Fill in Month and Year using numbers only.

    Example: Deduction for arrears payment year 2009, fills in as follow:

Month column: 12

Year column: 2009

  1. Employer's Information

    1. E Number :

      Fill in the employer's income tax number using10 digits.

      Example :

      E 908915-10 - fill in as 0090891510

      E 3943914-03 -fill in as 0394391403

      E 90001541-01 - fill in as 9000151401

    2. Company/Business Name
      • Fill in company's full name.

    1. Company/Business Address.
      • Fill in company's full address (including postcode).

    2. Company Registration Number
      • Fill in company's registration number.

  2. Payment Information

    1. Total deduction
      • Fill in total MTD deduction made and total CP38 deduction (if any).

    2. Total employees
      • Please enter the number of employees subject to MTD and the number of employees subject to CP38 deduction (if any).

    3. Amount
      • Fill in value of cheque.

    4. Number
      • Refers to cheque number.

    5. Bank Branch
      • Refers to bank branch of cheque.

    6. Date
      • Fill in cheque date using numbers.
      • Example : 3rd October 2006 - fill in as 03.10.2006.

  3. Officer Filling the Form

    1. Signature
      • Signature of officer filling the form

    2. Full Name
      • Full name of officer filling the form

    3. Identity Number
      • Identity number of officer filling the form

    4. Designation
      • Designation of officer filling the form

    5. Telephone Number
      • Company's telephone number.

  4. Information on Employees

    1. Number
      • Fill in the record number according to sequence.

    2. Income Tax Number
      • Leave blank this item if the employee does not have an income tax number. Employer can attach Form CP22 or Form In Lieu of CP39 together with Form CP39 when make MTD payment.
      • For employees who have an income tax number, fill in the number in this item.
      • Example : SG 1234567-08(0)

    3. Employee's Full Name
      • Fill in employee's name as per Identity Card or Passport.
      • Employees not subject to monthly deduction need not be included in list.

    4. Old Identity Card Number
      • Fill in the old identity card number for local employees (if any).

    5. New Identity Card Number
      • Fill in the new identity card number for local employees, without the dash.

    6. Employee's Number
      • Fill in employee's number or employee's salary number, if any.

    7. Passport Number
      • This item to be filled in for foreign employees only. Fill in employee's passport number.

    8. Country Code
      • To be filled up if the employee is a foreigner.

    9. MTD
      • Fill in the amount according to the Scheduler Tax Deduction schedule.

    10. CP38
      • Fill in the amount of tax deduction according to the CP38 Form.
      • If there is no deduction, leave this item blank.

In Lieu of CP39 Form

This form is to be used for registration of an income tax file for individuals who receive employment income. The employee must fill in this form using CAPITAL LETTERS.

The completed form can be forwarded to the nearest IRBM Branch. Please attach a copy of identity card together with the registration form.

Guide to filing in Form In Lieu of CP39

  1. EMPLOYEE INFORMATION

    1. EMPLOYER NAME
      • State your employer's full name.

    2. EMPLOYER'S INCOME TAX NUMBER
      • 'E' number can be obtained from your employer or Form EA/EC.

    3. EMPLOYEE'S NAME
      • Employee's full name as per identity card or passport for foreigner.

    4. EMPLOYEE OR SALARY NUMBER
      • Enter your salary or staff number, if any.

    5. IDENTITY NUMBER
      • OLD - fill in this column if you have the old identity card number
      • NEW - fill in with your new identity card number

    6. POLICE NUMBER
      • Enter your Police Number, if applicable.

    7. ARMY NUMBER
      • Enter your Army Number, if applicable

    8. INCOME TAX NUMBER
      • Enter your income tax number, if any.

    9. IN WHICH YEAR WAS THE FIRST MTD MADE
      • Enter year your first MTD was made.

    10. DATE YOU STARTED WORKING
      • Date you started working in Malaysia.

    11. SEX
      • Mark 'X' in applicable box, either male or female.

    12. MARITAL STATUS
      • Mark 'X' in applicable box, either single person, married, widow, widower or expired.

    13. DATE OF MARRIAGE
      • Enter your date of marriage (if applicable).

    14. CORRESPONDENCE
      • Enter your correspondence address.

    15. PASSPORT NUMBER
      • If you are not a Malaysian citizen, please enter your birth date and passport number. Attach a copy of the first page of your passport.

        Example:

      Date of Birth :

      1

      4

      0

      2

      7

      5

      Passport No. :

      R

      1

      2

      3

      4

      5

      6

      7

  2. HUSBAND/WIFE INFORMATION
  1. HUSBAND/WIFE NAME
    • Enter husband/wife's full name as per Identity Card.

  2. IDENTITY CARD NUMBER
    • OLD - please enter old identity card number, if any.
    • NEW - fill in with new identity card number.

  3. POLICE NUMBER
    • Enter Police Number, if applicable.

  4. ARMY NUMBER
    • Enter Army Number, if applicable.

  5. HUSBAND INCOME TAX NUMBER
    • If you are a married woman, please enter your husband's income tax file number, if any.

  6. PASSPORT NUMBER
    • If not a Malaysian citizen, please enter birth date and passport number. Attach a copy of the first page of passport.

Failure to Comply with MTD

Failure to comply with Monthly Tax Deduction will render an employer liable to prosecution under Rule 17, Income Tax (Deduction from Remuneration) Rules 1994 ["The Rules"]. Under this Rule, any person, who, without any reasonable reason fails to comply with Subrule 10(1) or Rule 3 is liable to prosecution and upon conviction, can be fined up not less than RM200 and not more than RM20,000 or to imprisonment for a term not exceeding six months or to both.

Types of offences under "The Rules" are :

  • Failure to remit monthly tax deduction of employees by the 15th. of the following month.
  • Failure to deduct and / or less deduct monthly tax deduction of employees.
  • Failure to remit or less remit MTD or CP38 deduction that has been made from employees' remuneration.
  • Failure to give complete and accurate information about employees.
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