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PCB / MTD Explained: Malaysia's Monthly Tax Deduction for Employees

Reviewed by the Talreon Editorial Team

Last verified: 28 October 2026 against LHDN's individual FAQ and employer responsibilities page. Short answer: PCB (Potongan Cukai Bulanan, or Monthly Tax Deduction/MTD) is income tax your employer takes from your pay each month and sends to LHDN by the 15th of the following month. If you meet all of LHDN's conditions, you can treat PCB as your final tax and skip filing a return. Otherwise you still file.

Talreon is an independent publisher and is not affiliated with LHDN (Inland Revenue Board of Malaysia, HASiL). This page explains the process in our own words; the agency's own website and notices are the final word.

What PCB is

LHDN describes MTD as a mechanism in which employers deduct from employees' salaries every month to pay their income tax. The amount comes from the computerised calculation method or the e-PCB schedule [LHDN PCB payment].

Key dates and rules

ItemRuleSource
Employer pays PCB to LHDNOn or before the 15th of the following month[LHDN]
Form EA/EC to employeeOn or before the last day of February of the following year[LHDN]
Employer return (Form E) with C.P.8DOn or before 31 March of the following year[LHDN]
Records kept by employer7 years[LHDN]
MTD as final tax available sinceYear of Assessment 2014[FAQ Q30]
Claim reliefs through employer (Form TP1)LHDN's 2026 guide says at least twice a year[LHDN Navigasi 2026]

Can PCB be my final tax? The conditions

According to LHDN's FAQ, all of these must apply [FAQ Q31]:

  • You have only one source of employment income, including benefits-in-kind and living accommodation value.
  • PCB was deducted under the Income Tax (Deduction from Remuneration) Rules 1994, or your income was below the level where PCB applies.
  • You served the same employer. LHDN's 2026 navigation guide describes this as a full 12 months in the calendar year [Navigasi 2026].
  • The tax is not borne by your employer.
  • You did not choose joint assessment with your spouse.

LHDN notes you can still be audited if you choose MTD as final tax [Navigasi 2026]. If you don't meet every condition, you must file. LHDN's FAQ answers "Do I still need to submit ITRF?" with yes, unless MTD is your final tax [FAQ Q19].

Steps: check the PCB deducted from you

  1. Log in to MyTax.
  2. Click the Status MyTax icon on the home page and choose PCB. The system shows your statement by year of assessment and calendar year [MyTax user manual].
  3. Compare the total with the PCB figure on your EA form. If they don't match, ask your employer's payroll team first.

Steps: decide whether to file

  1. Check the five conditions above.
  2. If you have extra income (rent, a side business, a second job), you don't qualify, so file e-BE or e-B. See our e-Filing guide.
  3. Even if you qualify, filing can be worth it if you have reliefs your employer didn't apply. Use the tax estimator to compare.

Documents

  • Payslips showing monthly PCB
  • EA/EC form for the year
  • Form TP1, if you claim reliefs through your employer

What is CP38?

LHDN explains that CP38 is a separate instruction to your employer to deduct extra amounts to clear a tax balance, on top of normal PCB [FAQ Q50].

Common mistakes

  • Assuming PCB always equals your final tax. It only does if every condition is met.
  • Changing jobs mid-year and not filing.
  • Not updating TP1 after a big relief such as education fees.

Frequently asked questions

Is PCB the same as MTD?

Yes. PCB (Potongan Cukai Bulanan) is the Malay name for Monthly Tax Deduction (MTD).

If PCB is my final tax, do I lose reliefs?

LHDN's 2026 guide says you can claim reliefs and rebates through your employer using Form TP1. If you don't, PCB may not reflect them.

Who pays PCB to LHDN?

Your employer, on or before the 15th of the following month, according to LHDN.

Where to check it yourself

Talreon is not affiliated with LHDN (Inland Revenue Board of Malaysia, HASiL). Figures and steps on this page were checked against the linked pages on 28 October 2026. Read our editorial and review process and figures update log. Spotted something out of date? Email support@talreon.com with the page address.

Change log: 28 October 2026 – first published. Educational information only; not tax, financial or legal advice.

Sources

Last checked: 28 October 2026. Links opened on this date; figures are as stated above. Rules change, so confirm with the official agency before acting.