Malaysia’s Budget 2027, tabled in Parliament on 9 October 2026, raises the basic relief that every resident taxpayer gets for the first time since 2010 and trims two of the middle income tax rates. At the very top, the 30% rate starts at half the current income. The changes are proposed for the year of assessment (YA) 2027. Below we run them through the same Malaysia rules as our take-home pay calculator to show what they are worth at different salaries.
What Budget 2027 changes
- Individual relief: the automatic relief for you and your dependants rises from RM9,000 to RM12,000. You claim it without receipts, so every resident taxpayer gets it.
- Lower middle rates: chargeable income between RM70,001 and RM100,000 is taxed at 18% instead of 19%. The RM100,001–RM400,000 band at 25% is split, and the first part, up to RM150,000, drops to 24%.
- Top rate starts earlier: the 28% band now ends at RM1 million instead of RM2 million, so 30% applies to chargeable income above RM1 million.
- Unchanged: the rates from 0% to 11% on the first RM70,000, 25% on RM150,001–RM400,000, 26% on RM400,001–RM600,000, and the RM400 rebate for chargeable income up to RM35,000.
The Budget also widens several existing reliefs, including medical relief for post-natal care and the relief for caring for parents. Those depend on what you spend, so they are not in our figures.
Who gains and by how much
The higher relief helps everyone who pays tax, but its value depends on your top rate. Taking RM3,000 more out of chargeable income saves RM90 if your top rate is 3%, RM330 at 11% and RM750 at 25%. If the RM400 rebate already wipes out your tax, you gain nothing, because there is no tax left to reduce.
The rate cuts add up to RM300 (one point on RM30,000) once your chargeable income passes RM100,000, and to RM800 once it passes RM150,000. Together, the largest saving is RM1,640, for chargeable income between RM600,000 and RM1 million. That matches the government’s estimate of up to about RM1,600 more disposable income a year.
Above RM1 million the picture turns. Every ringgit between RM1 million and RM2 million is taxed at 30% instead of 28%, and above about RM1,082,000 of chargeable income that extra charge is bigger than the gains.
Worked example: RM120,000 a year
Take a resident employee on RM10,000 a month with no bonus, paying EPF at 11% plus SOCSO and EIS, and claiming no reliefs except the individual relief and the EPF and SOCSO/EIS reliefs. For YA 2026, chargeable income is RM106,650 and tax is RM11,062.50, which matches what our calculator shows today. For YA 2027 the higher relief brings chargeable income down to RM103,650, and the new rates give tax of RM9,976.00. The saving is RM1,086.50 a year, or about RM91 a month, and take-home pay after contributions rises to RM96,005.
At RM60,000 a year, chargeable income stays below RM70,000, so the saving of RM180 comes from the higher relief alone. At RM1,200,000, tax goes up by RM2,033, because of the earlier start of the 30% band.
Before and after at seven salaries
The salary links open the calculator with that amount. It still uses YA 2026 rules.
| Annual salary | Tax YA 2026 | Tax YA 2027 | Yearly saving | Per month | Take-home YA 2027 |
|---|---|---|---|---|---|
| RM60,000 | RM1,299 | RM1,119 | +RM180 | +RM15 | RM51,599 |
| RM100,000 | RM6,864 | RM6,157 | +RM707 | +RM59 | RM82,024 |
| RM120,000 | RM11,063 | RM9,976 | +RM1,087 | +RM91 | RM96,005 |
| RM150,000 | RM18,563 | RM17,176 | +RM1,387 | +RM116 | RM115,505 |
| RM250,000 | RM43,563 | RM42,013 | +RM1,550 | +RM129 | RM179,669 |
| RM700,000 | RM160,662 | RM159,022 | +RM1,640 | +RM137 | RM463,159 |
| RM1,200,000 | RM300,662 | RM302,695 | −RM2,033 | −RM169 | RM764,486 |
What to do now
- Nothing changes for your 2026 income. You will file it in 2027 under the current rules, with the RM9,000 relief.
- Monthly tax deductions (PCB) for 2027 will follow the new schedule only after the Finance Bill passes and LHDN publishes updated tables. Check your first payslips of 2027 against the table above.
- If you claim the expanded reliefs, such as parental care or post-natal care costs, keep receipts from 1 January 2027.
- Comparing job offers for 2027? Use the take-home pay calculator and add the savings above. We will move it to YA 2027 rules once they are law.
How we calculated this
The YA 2026 figures use the calculator’s own Malaysia rules: individual relief RM9,000, EPF relief up to RM4,000, SOCSO and EIS relief up to RM350, the current resident rates and the RM400 rebate. For YA 2027 we change only the relief and the rate schedule announced in the Budget. Contributions are the same in both years, so the change in take-home pay equals the change in tax. Zakat, other reliefs, bonuses and non-resident rates are not modelled. Sources: Budget 2027 speech and Budget 2027 tax measures (Lampiran 1 and 2), Ministry of Finance Malaysia.
General information, not tax advice. The measures are proposals until the Finance Bill is passed, and your own tax depends on your reliefs and circumstances.