You glance over at your deskmate’s payslip; same job title, same salary but somehow their PCB deduction is way lower than yours. No cable, no inside deal. So what gives?
Faiz Zulfakar, a unit trust and PRS consultant, broke it down online, and honestly, it’s something every salaried Malaysian needs to hear.
First off, PCB isn’t just about your salary
PCB, or Potongan Cukai Berjadual, is your monthly scheduled tax deduction and it doesn’t just look at your basic pay. The system also factors in three personal profile questions right off the bat:
- Are you single or married?
- Is your spouse working?
- How many kids are you supporting?
That alone can explain why two colleagues with identical salaries end up with very different deductions.
HR has no idea what you’re doing with your money
Here’s the part most people miss. If you’re paying for takaful, contributing to a private retirement scheme (PRS), or giving out monthly zakat; HR won’t automatically know about it.
Unless you tell them, the payroll system will just run on default settings based on the basic info you gave when you first joined the company.
And default settings? That means maximum PCB deduction. Every single month.
HR isn’t manually calculating your tax either, they’re running a payroll software linked to LHDN’s official formula. The system estimates your annual salary, subtracts only the basic reliefs, calculates the yearly tax, then divides by 12. Simple, but brutal if you’ve got unreported reliefs.
The fix nobody told you about: Borang TP1
There’s a form called Borang TP1, and you can request it straight from your HR department. It lets you declare additional personal tax reliefs so the system can recalculate your monthly PCB accordingly.
Here’s what you should be declaring in there:
- Lifestyle relief — laptops, sports equipment, internet bills
- Medical insurance — up to RM4,000 in relief (latest limit)
- Monthly zakat — this one directly reduces your PCB
- PRS contributions — up to RM3,000 in relief, extended until 2030
Once HR updates your TP1 info in the system, your PCB for that month drops automatically.
The real numbers: What declaring actually saves you
Let’s put some real ringgit to this. Take a married employee earning RM8,000/month, spouse not working, 2 children.
Without declaring extra reliefs (default):
- Taxable income: RM75,000
- Annual tax: RM5,450
- Monthly PCB: RM454
After declaring takaful (RM3,000), PRS (RM3,000) and zakat (RM1,200 rebate) via TP1:
- Taxable income: RM69,000
- Annual tax (after zakat rebate): RM3,070
- Monthly PCB: RM256
That’s a difference of RM198 every month or RM2,376 a year, just from filling in one form.
‘But won’t LHDN just refund me anyway?’
Technically, yes. If you overpay throughout the year, LHDN will refund the excess when you file your taxes in March or April the following year.
But, and this is the point Faiz drives home; why let your money sit with LHDN for a whole year when it could be working for you?
As someone who manages finances professionally, he’d rather have that extra cash in hand every month to invest and grow, instead of waiting on a refund.
What if you end up owing money after e-Filing?
This usually happens when there’s side income that wasn’t declared, or the reliefs claimed in TP1 don’t match what’s submitted during e-Filing.
Remember, PCB is just an estimate. e-Filing is the final, binding calculation. If your monthly deductions were too low all year, you’ll have a shortfall to settle.
Also worth noting: PCB is calculated based on your gross salary, that includes allowances, not just your basic pay.
- Request Borang TP1 from your HR department
- List all your personal tax reliefs — takaful, PRS, zakat, lifestyle, medical insurance
- Submit it — you can do this monthly or as a one-time update
- Watch your PCB drop the following month
You can also verify your exact PCB amount using the official LHDN PCB Calculator at hasil.gov.my.
We spoke to a tax consultant, here’s what he said
WeirdKaya sat down exclusively with Faiz Zulfakar, a unit trust and PRS consultant, to go deeper on PCB.
When we asked Faiz about the most common mistake new employees make around PCB, his answer was immediate.
Most of them, he said, simply assume the deduction is fixed — that it’s a number handed down from above, unchangeable, and just something you accept.
The most common mistake is that they assume PCB is fixed and cannot be changed so they just accept the maximum deduction from their salary every month without question.
“Most new employees don’t realise that HR is only using the default settings if you haven’t declared anything. And they have absolutely no idea that Borang TP1 even exists which is the completely legal way to reduce your monthly deduction.”
Don’t just claim your phone bill, build something with it
When we asked Faiz for his simplest piece of advice on managing tax-related cash flow, he pushed back a little on the instinct to chase lifestyle claims first.
The simplest advice is to maximise your tax reliefs on instruments that can grow or protect your money, not just lifestyle claims,” he said.
Faiz added that one can claim their phone and internet bills, but the smarter move is to fill up your medical insurance quota and max out your PRS contributions.
The PRS relief alone goes up to RM 3,000 and has been extended until 2030. The real upside, though, is what happens beneath the surface.
“While you’re saving on tax, you’re actually building an asset without even realising it,” Faiz added.
On the question of whether to declare via TP1 or simply wait for an e-Filing refund, Faiz didn’t hesitate.
“I 100% recommend declaring via TP1. It all comes back to cash flow.
It’s far better to have that money in your hands every month so it can immediately roll into inflation-proof investments that give better returns than waiting for a refund next year.”
What to do if your HR pushes back
There is, however, one practical reality he wants people to know about.
“HR sometimes quietly discourages TP1 submissions because it requires manual work to update the payroll system every month,” he explained.
It doesn’t always get mentioned, and employees are often left wondering why the process feels harder than it should be.
His advice: go directly to your HR and ask about their company’s specific policy.
Most companies allow TP1 submissions at least twice a year, so collect your receipts first and submit them all at once.”
Working around HR’s constraints is fine, as long as you don’t let it become an excuse to skip the process entirely.
As Faiz put it: “Meeting HR halfway is fine, as long as you still manage to protect your own cash flow.”
Share this with your office group chat, chances are your colleagues don’t know about TP1 either.
Source: Faiz Zulfakar, Unit Trust & PRS Consultant. Tax calculations based on 2024 LHDN rates and are for illustration purposes only. Consult a qualified tax adviser for personalised advice.
