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Malaysia
Individual - Other taxes
Last reviewed - 09 December 2022Social security contributions
Employees’ Provident Fund (EPF)
The Malaysian EPF is a compulsory pension scheme for all Malaysians. The EPF provides for compulsory retirement savings and contributions for all Malaysian citizens and permanent residents who are working in Malaysia. It is not compulsory for non-Malaysian citizens and non-permanent residents to contribute to the EPF, but they may elect to do so.
| Contribution by | Malaysian citizens and permanent residents (mandatory) | Expatriates and foreign workers (without permanent resident status) (voluntary) | ||
| % of contribution of employee’s wages (minimum) | ||||
| Employer | Employee | Employer | Employee | |
| Below age 60: | ||||
| Income > MYR 5,000 | 12.0% | 11.0% | MYR 5 per person | 11.0% |
| Income ≤ MYR 5,000 | 13.0% | |||
| Age 60 and above: | ||||
| Income > MYR 5,000 | Malaysian: 4.0%; Permanent resident: 6.0% |
Malaysian: 0%; Permanent resident: 5.5% |
MYR 5 per person | 5.5% |
| Income ≤ MYR 5,000 |
Malaysian: 4.0%; Permanent resident: 6.5% |
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Social Security Organisation
Malaysia also has a Social Security Organisation (SOCSO) who administers the Employment Injury Scheme (EIS) and the Invalidity Scheme (IS). SOCSO coverage and protection is limited to Malaysian citizens and permanent residents. A monthly contribution must be made and may fall under one of two categories:
- Both the employer and employee make monthly contributions to EIS and IS. The sum is based on the employee’s monthly wages and is restricted to a maximum of MYR 86.65 for the employer and MYR 24.75 for the employee.
- The employer makes a contribution to EIS only for employees who are not eligible to be covered under the IS, with the amount restricted to a monthly maximum of MYR 61.90. Malaysian employers are required to contribute to SOCSO on a monthly basis for all their employees (including foreign employees). However, the employment or assignment arrangement could impact the applicability of the requirement on the employee. As a result, each case needs to be examined individually to determine the applicability.
Employment Insurance System (EIS)
The EIS provides certain benefits and a re-employment placement programme for insured persons in the event of loss of employment to promote active labour market policies. The EIS covers only Malaysian citizens and permanent residents.
Both the employer and employee make monthly contributions of 0.2% of employee's wage, restricted to a maximum of MYR 9.90.
Real property gains tax (RPGT)
RPGT is charged upon gains from disposals of real property. See the Other taxes section in the Corporate tax summary. RPGT is imposed on individuals as follows:
| Disposal | Citizens | Non-citizens/non-permanent residents |
| Up to 3 years | 30% | 30% |
| In the 4th year | 20% | 30% |
| In the 5th year | 15% | 30% |
| Exceeding 5 years | 0% | 10% |
Consumption taxes
Sales tax and service tax
The rate of both sales tax and service tax is 6%.
Net wealth/worth taxes
There are no net wealth/worth taxes in Malaysia.
Inheritance, estate, and gift taxes
There are no inheritance, estate, or gift taxes in Malaysia.
Property tax
Property tax is levied on the gross annual value of property as determined by the local state authorities.
Luxury and excise duties
Excise duties are imposed on a selected range of goods manufactured and imported into Malaysia. Goods that are subject to excise duty include beer/stout, cider and perry, rice wine, mead, un-denatured ethyl alcohol, brandy, whisky, rum and tafia, gin, cigarettes containing tobacco, motor vehicles, motorcycles, playing cards, and mahjong tiles. See the Other taxes section in the Corporate tax summary for rates and more information.
Stamp duty
Malaysia imposes stamp duty, which is payable by the buyer/transferee, on chargeable instruments. See the Other taxes section in the Corporate tax summary for rates and more information.
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