All employees working in Malaysia are categorized into two (2) tax residencies; Tax Resident and Non-Tax Resident. Each of this category will give different amount of income tax deduction.
- Tax Resident individuals will deduct tax amount based on tax rate if their total taxable income exceeds the threshold value.
- Non-Tax Resident individuals will deduct flat rate of 30% of tax regardless the taxable income received.
P/S: Please refer to LHDN official website or contact LHDN for more information on what is defined as a Tax Resident and Non-Tax Resident.
Where to Set Tax Resident and Non-Tax Resident Category ?
Go to Employee's List to pen an employee's Profile
1. Click on Payroll on Profile page
2. Go to General Payroll Information and click on pencil icon to edit
3. Find field "Are you tax resident"?
- Choose Yes = if the individual is a tax resident
- Choose No = if the individual is a non-tax resident
4. Click Save
