This is the rules reference. For how it works in the software, see Statutory Contributions in the reference, or the how-to Run payroll.
PCB (Potongan Cukai Bulanan), also called MTD (Monthly Tax Deduction), is income tax withheld from salary each month and paid to LHDN on the employee’s behalf. It is a prepayment of the employee’s annual tax, not a separate charge.
How PCB is worked out
There is no single percentage. PCB is computed per employee from LHDN’s MTD formula, which takes gross remuneration, less EPF (capped) and other allowable deductions, spread over the remaining months of the year, and applies the individual tax rates with the employee’s relief and rebate entitlements. Cloudby runs this calculation on every payroll.
What affects the amount
- Personal reliefs and rebates the employee declares (form TP1): lifestyle, medical, education, zakat and the rest.
- Marital status and spouse/children relief (form TP2 / employee particulars).
- Prior employment in the same year (form TP3), so the year-to-date position is correct when someone joins mid-year.
- Bonuses and one-off pay, which are spread under the formula rather than taxed in a single spike.
Remittance
PCB withheld in a month is paid to LHDN with the CP39 return by the 15th of the following month, usually via the e-PCB / e-Data PCB channel. Cloudby produces the CP39 data from your run: see Statutory Forms.
Year-end
PCB feeds the annual picture: each employee’s EA statement shows total remuneration and PCB deducted, and the employee reconciles it in their own tax return. See Deadlines & annual filing.
Related
- Reference: Statutory filings (EA, Form E, CP8D) in Cloudby
- Reference: Deadlines & annual filing
- How-To: File annual and statutory forms