Proposals, not yet law
Budget 2027 was tabled on 9 October 2026. Its tax changes need a Finance Act, and PCB only changes when LHDN publishes its 2027 specification; as of 28 October 2026, neither the Finance Bill nor the specification is out. Everything for 2027 on this page is the Budget’s proposal.
What the Budget proposes
Three tax changes, from year of assessment 2027 (income earned in 2027):
- Individual relief: RM9,000 to RM12,000. The relief every resident gets for themselves, unchanged since 2010. Payroll applies it automatically.
- A point off the middle rates. 19% becomes 18% from RM70,001 to RM100,000, and a new band from RM100,001 to RM150,000 pays 24% instead of 25%.
- The top rate from RM1,000,000. 30% now starts above RM2,000,000; the Budget moves it down to RM1,000,000.
| Chargeable income | YA2026 | YA2027 (proposed) |
|---|---|---|
| First RM5,000 | 0% | 0% |
| RM5,001 to RM20,000 | 1% | 1% |
| RM20,001 to RM35,000 | 3% | 3% |
| RM35,001 to RM50,000 | 6% | 6% |
| RM50,001 to RM70,000 | 11% | 11% |
| RM70,001 to RM100,000 | 19% | 18% |
| RM100,001 to RM150,000 | 25% | 24% |
| RM150,001 to RM400,000 | 25% | 25% |
| RM400,001 to RM600,000 | 26% | 26% |
| RM600,001 to RM1,000,000 | 28% | 28% |
| RM1,000,001 to RM2,000,000 | 28% | 30% |
| Over RM2,000,000 | 30% | 30% |
The RM400 rebate stays for chargeable income up to RM35,000, so with the bigger relief more people pay no tax at all. The Ministry of Finance expects about 5 million taxpayers to gain, by up to RM1,600.
Take-home pay in 2026 and 2027
The same salary in both years, for a single Malaysian under 60 with only the automatic reliefs: January’s PCB for a full year at that salary, as everywhere on this site. EPF, SOCSO and EIS don’t change, so the difference is all PCB.
| Salary | PCB 2026 | PCB 2027 | Take-home 2026 | Take-home 2027 | More a month |
|---|---|---|---|---|---|
| RM3,000 | RM0 | RM0 | RM2,627.20 | RM2,627.20 | RM0 |
| RM5,000 | RM110 | RM95 | RM4,268.20 | RM4,283.20 | RM15 |
| RM8,000 | RM514.20 | RM458.35 | RM6,519.50 | RM6,575.35 | RM55.85 |
| RM10,000 | RM929.20 | RM838.35 | RM7,884.50 | RM7,975.35 | RM90.85 |
| RM15,000 | RM2,179.20 | RM2,050 | RM11,084.50 | RM11,213.70 | RM129.20 |
| RM20,000 | RM3,429.20 | RM3,300 | RM14,284.50 | RM14,413.70 | RM129.20 |
On RM3,000 there’s no PCB in either year, so take-home pay doesn’t move. The saving grows with pay, then levels off once chargeable income passes RM150,000, the top of the cut bands: on RM15,000 and RM20,000 alike it’s RM129.20 a month, RM1,550 of tax a year. Married, with children or with reliefs on Form TP1, your own figures will differ; the PCB calculator has 2027 too.
When PCB changes
Employers work out PCB with LHDN’s specification for the year. LHDN hadn’t published the 2027 one by 28 October 2026; its 2026 specification is dated 1 January 2026. The tax changes need the Finance Act first: last year’s Finance Bill, for Budget 2026, was tabled on 18 November 2025 and passed by the Dewan Rakyat on 1 December 2025. If this year runs the same way, January 2027’s payslip will have the new rates and relief.
If the specification comes later, PCB catches up. Each month’s PCB is the year’s tax less what you’ve already paid, spread over the months left, so lower PCB later in the year makes up for the early months, and anything still overpaid comes back when you file for YA2027. That happened in 2023: LHDN revised its specification on 1 June, and PCB used the previous year’s rates until then. How PCB is calculated walks through the formula.
Minimum wage: RM2,000 from June 2027
The minimum wage rises from RM1,700 to RM2,000 a month from June 2027. MSMEs with annual sales under RM50 million are exempt. On RM2,000 you’d take home RM1,751.70 after EPF, SOCSO and EIS, with no PCB: RM262.60 more than on RM1,700.
The Budget also proposes a minimum wage of RM2,500 a month for semi-skilled occupations and graduates; the speech gives no start date.
Other reliefs
These are the reliefs you claim, on Form TP1 through your employer or when you file. Their limits stay the same; what they cover changes from YA2027, and one is new.
| Relief | Up to | What changes |
|---|---|---|
| Parents’ and grandparents’ care | RM8,000 | Covers every kind of care at home, in day care and in residential care, not only medical care. A carer’s written declaration or work permit with receipts is enough; no doctor has to confirm the need. |
| Health and well-being (now “medical expenses”) | RM10,000 | Adds postnatal care from a confinement centre or qualified person, up to RM3,000. Breastfeeding equipment (up to RM1,000) moves in here, paid by you or your spouse. |
| Education and skills training fees (now “education fees”) | RM7,000 | Certificate to PhD courses in any field; up to RM3,000 for TVET upskilling for you or your spouse; up to RM2,000 for courses unrelated to work for you or your spouse, or STEM, arts, language and religion classes or tuition for your children. |
| Lifestyle | RM2,500 | Adds AI software and app subscriptions for you, your spouse or child, adopting a pet from a registered shelter, and vet fees for vaccination, spaying or neutering. Upskilling courses move to education fees. |
| Sports | RM1,000 | Adds sports shoes, up to RM300. |
| Tourist attractions and cultural programmes | RM1,000 | Extended for one more year, YA2027. |
| SOCSO and EIS | RM350 | Also covers compulsory LINDUNG Kendiri contributions by the self-employed in passenger transport, goods or food transport, and hawkers. |
| Voluntary LINDUNG 24 Jam and LINDUNG Kendiri (new) | RM150 | On top of the RM350, for voluntary contributions to LINDUNG 24 Jam or to LINDUNG Kendiri in its 17 voluntary sectors. |
The Budget doesn’t say whether the LINDUNG 24 Jam share taken from your pay counts as voluntary for the new RM150 relief, since Malaysians can opt out of the scheme; LHDN’s 2027 Form TP1 notes should. Today’s reliefs and their limits are in tax reliefs for 2026.
What stays the same
- EPF. 11% from you, 13% or 12% from your employer. The Budget doesn’t change contribution rates; it registers every citizen with EPF automatically at 18.
- SOCSO, EIS and LINDUNG 24 Jam. The same tables and the RM6,000 ceiling. LINDUNG 24 Jam stays at 0.75% until 1 June 2028, when it rises to 1%, as set when the scheme started.
- The other reliefs payroll applies. RM4,000 for a spouse with no income, RM2,000 for each child under 18, EPF up to RM4,000 a year.
- The other rates. Everything up to RM70,000 of chargeable income, and from RM150,001 to RM1,000,000.
Also in the Budget
- Civil servants at premier Grade B and below, contract staff included, get RM1,500 of special financial assistance, paid in two parts: before Aidilfitri and before the 70th anniversary of independence.
- From YA2028, companies other than MSMEs can deduct salaries for tax only if they pay them through a bank or another cashless method the Employment Act allows.
- Employers who repay a full-time employee’s PTPTN loan in 2027 or 2028 can deduct it for tax.