Understanding Individual Tax Filing for Employment Income in Malaysia for 2026

megatfaiz3
21 hours ago
3 min read

Filing taxes can feel complicated, especially when rules change or when you are preparing for a new tax year. If you are employed in Malaysia and will start working from 1st March 2026, it’s important to understand how to file your individual tax for the income earned in 2025. This guide breaks down the essentials of individual tax filing for employment income in Malaysia for the year 2026, helping you prepare accurately and avoid common pitfalls.

Eye-level view of a Malaysian tax form with a pen placed on top — Filing individual tax returns for employment income in Malaysia

Who Needs to File Taxes in Malaysia for 2026

If you are a Malaysian tax resident earning employment income, you must file an individual income tax return for the year 2025 by the deadline in 2026. Tax residency is generally determined by the number of days you stay in Malaysia during the year. If you stay 183 days or more, you are considered a tax resident.

Key points:

Employment income includes salary, bonuses, allowances, and benefits.
Income earned from 1 January 2025 to 31 December 2025 must be reported.
Even if you start employment on 1 March 2026, you must file for income earned in 2025 if applicable.
Non-residents have different tax rates and filing requirements.

Important Dates and Deadlines for 2026 Filing

The Inland Revenue Board of Malaysia (LHDN) sets specific deadlines for tax filing each year. For the 2026 tax filing year, covering income earned in 2025:

Filing period starts: March 2026
Deadline for manual filing: 30 April 2026
Deadline for e-filing: 15 May 2026

Filing early helps avoid last-minute stress and penalties for late submission.

How to Prepare Your Tax Filing

Collect Your Income Documents

Before filing, gather all necessary documents:

EA Form: Issued by your employer, showing your total employment income and tax deductions.
Other income statements: If you have additional income sources.
Receipts for tax relief claims: Medical expenses, education fees, insurance premiums, etc.

Understand Tax Reliefs and Rebates

Malaysia offers various tax reliefs to reduce taxable income. Common reliefs for employment income include:

Individual relief: A fixed amount for all taxpayers.
Medical expenses: For serious diseases or parental care.
Education fees: For self or children.
Life insurance and EPF contributions.

Knowing which reliefs apply to you can lower your tax payable.

Step-by-Step Guide to Filing Your Tax Return

Register for e-Filing
If you haven’t already, register on the LHDN e-Filing portal. This is the easiest and fastest way to file.
Fill in the Form BE
This form is for individuals without business income. Enter your employment income, reliefs, and deductions.

Calculate Tax Payable
The system will calculate your tax based on the progressive tax rates for residents, ranging from 0% to 30%.
Submit Your Return
Review your entries carefully before submitting. Keep a copy for your records.

Make Payment
If you owe tax, pay by the deadline to avoid penalties. Payment can be made online or at authorized banks.

Common Mistakes to Avoid

Missing the deadline: Late filing can lead to fines.
Incorrect income reporting: Ensure all income is declared, including bonuses and benefits.
Not claiming eligible reliefs: This can increase your tax unnecessarily.
Ignoring tax notices: Respond promptly to any queries from LHDN.

Example Scenario

Suppose you start a new job on 1 March 2026 but earned freelance income in 2025. You must file your 2025 tax return by May 2026, reporting your freelance income. Your employer will provide your EA form for employment income earned in 2025 if applicable. If you had no employment income in 2025, you still need to file if your total income exceeds the tax exemption threshold.