Details on Income Taxation in 2026
For any expat settling in Malaysia, the golden rule is: **the tax system is territorial**. This means that, in principle, only income generated or received in Malaysia is taxable locally. This feature makes Malaysia one of the most attractive countries in ASEAN, especially when compared to the global systems of countries like the United States or France.
Tax Resident Status
To benefit from the progressive scale (which can go down to 0% for the lowest brackets), you must be considered a tax resident. The primary condition is to physically reside in Malaysia for at least **182 days** during the calendar year.
Beware of the first 60 days
During your first year of arrival, if you work less than 60 days in Malaysia, you may be exempt from tax under certain income source conditions. However, for most, the 30% rate applies by default until the 182-day threshold is crossed.
Income Tax Scale (Residents 2026)
| Income Bracket (MYR) | Rate (%) | Tax Amount (Cumulative calculation) |
|---|---|---|
| 0 – 5,000 | 0% | 0 |
| 5,001 – 20,000 | 1% | 150 |
| 20,001 – 35,000 | 3% | 600 |
| 35,001 – 50,000 | 6% | 1,500 |
| 50,001 – 70,000 | 11% | 3,700 |
| 70,001 – 100,000 | 19% | 9,400 |
| 100,001 – 400,000 | 25% | Variable |
| > 2,000,000 | 30% | Max |
To learn more about planning your monthly budget including these taxes, consult our analysis of the cost of living in Malaysia.