Lembaga Hasil Dalam Negeri (LHDN) has announced a new PCB calculation method with effective year 2009. The formula reconciles employee monthly PCB; and also allow employees to include personal waiveable tax wages (e.g. books, life insurance, parent medical claims) into monthly PCB calculation with the objective of calculating an accurate final year-to-date tax amount.
In brief, LHDN attempts to predict and calculate employee annual income tax amount accurately by incorporating an advanced mathematical formula to derive monthly PCB tax amount. The formula supports payroll computation with items such as basic salary, bonuses and additional wages, perquisites, benefit-in-kind (ie. TP2) and many other personal tax reduction items (ie. TP1).
LHDN has also included a web-based PCB Calculator (see http://www.hasil.gov.my) to cross check PCB accuracy.
Why latest PCB contribution is paying with cents ?
With effective from year 2009, LHDN has made compulsory for all computerized payroll software to compute PCB accurately with cents value. Final PCB result is rounded to the "highest 5 cents".
Can we still use Manual PCB 2010 Table to compare result ?
Manual PCB table for year 2010 should NOT be used anymore. Employers using computerized payroll software MUST use computerized formula as per specified by LHDN.