PCB stands for "Potongan Cukai Bulanan" which is Malay for "Monthly Tax Deduction".It is a series of monthly deductions that go towards payment of your taxes in relation to youremployment income. These monthly deductions are retained by your employer and paid over to the Inland Revenue Board (LHDN). This mechanism is designed to avoid the issues that come with requiring payment of a large sum at the end of the year.
- Income Threshold
If you earn (after EPF deduction) a minimum of RM 34,000 annually, then you must file a tax return, unless you are exempted from doing so under the conditions set out below.
- PCB as Final Tax
If the following conditions are satisfied, you can choose not to file a tax return as the PCB paid will be considered as final tax:
- Your only source of income is your employment income; and
- you have been working for the whole tax year with the same employer; and
- your employer has been deducting PCB from your salary correctly; and
- your taxes are not borne by your employer; and
- you have not opted for a joint assessment with your spouse.
If any of the above conditions are not met, then the exemption does not apply and you must file a tax return.
What is the deadline for the payment of PCB?
An employer who fails to remit payment on or before the 15th of the following month (if the 15th is a holiday the deadline will be the last working day before the 15th) can be fined and/or imprisoned.
The fine is a minimum of RM 200 and not more than RM 2,000 or 6 months imprisonment or both. An employer who does not deduct MTD or deducts but fails to remit the MTD to IRBM can be prosecuted in a civil court. With this, the MTD not deducted becomes a debt to the Government.
Furthermore, a late payment penalty of 10% will be imposed on the balance of tax not paid after 30th April following the year of assessment. If the tax and penalty imposed are not paid within 60 days from the date the penalty is imposed, a further penalty of 5% will be imposed on the amount still owing.
How to pay for PCB?
PCB payment should be made with the submission of Form CP39 (statement of monthly tax deduction).
Please note that Employers will need to submit Form CP39 online to the Inland Revenue Board of Malaysia (LHDN) with effect from Sept 1, 2019.
The following methods are available for submission:
- Internet Banking
Several banks offer payroll bulk payment services. You may use the PCB bank file generated by PayrollPanda and upload it to your bank’s website to make payment. The uploaded file will also communicate to LHDN the breakdown of individual employee contributions.
- LHDN Online Facilities
Using LHDN’s e-PCB, e-Data PCB or e-CP39 online portals.
- e-CP39 – For manual submission of monthly tax deductions of unregistered users and for one-time submissions only.
- e-PCB – For manual submission of monthly tax deductions of registered users. Once an employer is registered on the website, they will need to enter all the employee’s details manually. All the data entered will be auto-saved for the next submission. New employee data will need to be adjusted manually.
- e-Data PCB – For automated submission of monthly tax deduction of registered users. Once the user is registered in the portal, instead of manual data adjustments employer can simply upload the PCB file generated by JustLogin.
Payment can be made as follows:
- Online via the above portals through FPXif you have an account with one of these banks:
- Bank Islam
- CIMB Bank
- Hong Leong Bank
- Public Bank
- RHB Bank
Know more about Malaysian Payroll Statutory Contributions:
SOCSO - https://support.justlogin.com/hc/en-us/articles/4404834346381-SOCSO-JustLogin-Malaysia-Payroll
EIS - https://support.justlogin.com/hc/en-us/articles/4404834587661-EIS-JustLogin-Malaysia-Payroll
EPF - https://support.justlogin.com/hc/en-us/articles/4404842471693-EPF-JustLogin-Malaysia-Payroll
Form to be submitted Yearly by Malaysian companies - https://support.justlogin.com/hc/en-us/articles/4404836735245-Forms-that-Malaysian-Companies-need-to-Prepare