PCB (Monthly Tax Deduction): what it is and how it works (YA 2026)

What is PCB?

PCB (Potongan Cukai Bulanan) — or Monthly Tax Deduction (MTD) — is the income tax deduction made by the employer from an employee's monthly remuneration, then paid to HASiL.

PCB is an advance payment: it is not your final tax. Your final tax is determined later when you file the Income Tax Return Form (BNCP) through e-Filing — at that point you may have overpaid (receive a refund) or underpaid (need to pay the balance).

Source: HASiL — Estimated Tax Advance Payment (Bayaran Pendahuluan Anggaran Cukai); HASiL — PCB Payment (Pembayaran PCB) (see the Official Sources section below).

Legal basis

PCB is provided for under Rule 3 of the Income Tax (Deduction from Remuneration) Rules 1994 — employers must deduct from employees' monthly remuneration according to the Monthly Tax Deduction Schedule or a method approved by the Director General (Computerised Calculation Method). The relevant statutory provision is subsection 107(2) of the Income Tax Act 1967 (Act 53).

Source: HASiL — Estimated Tax Advance Payment (official text); Income Tax Act 1967, subsection 107(2).

How is the PCB amount determined?

The employer determines the monthly deduction amount through one of two methods:

1. e-Schedule PCB (e-CP39) — the official monthly tax deduction schedule.
2. Computerised Payroll Calculation Method — a method approved by the Director General.

Source: HASiL — PCB Payment.

Important note: The PCB 2026 Calculation Specification has been published by HASiL (English version only at the review date). However, the detailed formulas of the PCB 2026 computerised calculation (calculation steps, additional remuneration formula, allowances) have not been verified in this review — those formulas are marked this item still awaits official confirmation from HASiL — check again with HASiL before deciding. and must be verified against the PCB 2026 Calculation Specification PDF before the article states any formula.

Likewise, the maximum deduction/rebate amount that can be taken into account in the PCB calculation for YA 2026 depends on the current YA reliefs — HASiL's relief page still shows only the Year of Assessment 2025 tab at the review date, so the amount for YA 2026 is marked this item still awaits official confirmation from HASiL — check again with HASiL before deciding.

The employer's role: deduct, remit, report

The employer is responsible for:

• Deducting PCB from employees' monthly remuneration.
• Remitting (paying) PCB to HASiL.
• Reporting the PCB statement via e-Data PCB / e-PCB / e-CP39.
• Paying via FPX (revenue portal after filing), IBG, or cash (CIMB).

Source: HASiL — PCB Payment.

Forms TP1 and TP3

• Form TP1 — the form for claiming deductions/rebates to be used in the PCB calculation. Employees may submit TP1 to their employer so that reliefs and rebates are taken into account in the monthly deduction.
• Form TP3 — relates to a previous employer (e.g. when an employee changes employer in the same year).

Source: HASiL — PCB Schedule and Data Specification (Forms TP1 & TP3 + Explanatory Notes).

Form EA: the bridge to e-Filing BE

At the end of the year, the employer gives the employee a Form EA — the employee's annual remuneration statement. The information in Form EA (salary, allowances, PCB already deducted) is used to fill in Form BE during e-Filing. Keep Form EA safe — it is among the supporting documents that must be kept for at least 7 years.

Source: HASiL — FAQ (Individuals), Q8–Q10 (record keeping).

PCB vs CP500: don't confuse them

	PCB	CP500
What?	Monthly deduction by the employer from the employee's remuneration	Instalment payments of estimated tax paid by the taxpayer himself
Who pays?	The employer (on behalf of the employee)	The taxpayer himself
To whom?	HASiL (via the e-PCB/e-Data PCB/e-CP39 mechanism)	HASiL (via the CP500 notice)
For whom?	Salaried employees	Individuals carrying on a business / non-employment income (and certain cases)

Both are different advance payment mechanisms — don't lump them together as one thing. For CP500 details, refer to the CP500 draft: instalments of estimated tax.

Source: HASiL — Estimated Tax Advance Payment (CP500 summary).

Official PCB calculator

To estimate your PCB, HASiL provides an official PCB calculator via ezHasil (accessed through the MyTax portal), alongside e-CP39 and e-Schedule PCB. The official calculator gives an estimate — the final amount is determined at e-Filing.

Source: ezHasil — PCB Calculator; MyTax (HASiL).

Simple example

Daniel, a salaried employee, receives a monthly payslip showing the PCB deduction. At the start of the year, he submits Form TP1 to his employer so that his personal reliefs are taken into account in the monthly deduction. At the end of the year, the employer gives him Form EA. When doing e-Filing e-BE, Daniel confirms his actual tax balance: the total PCB already deducted is subtracted from the tax payable — if he overpaid, he gets a refund. (Illustrative example to show the concept — not specific tax advice.)

Frequently Asked Questions (FAQ)

Q. Is PCB the same as my final tax? A. No. PCB is an advance deduction. Your final tax is determined at e-Filing BNCP — you may overpay or underpay.

Q. I work and also run a small business — do I get PCB or CP500? A. Both mechanisms exist for different situations. Verify your situation with HASiL — detailed rules for combined cases are not elaborated in this draft. This item still awaits official confirmation from HASiL — check again with HASiL before deciding. for details.

Q. Can I ask my employer to reduce my PCB? A. Form TP1 allows deduction/rebate claims to be taken into account in the PCB calculation. Eligibility terms and conditions — this item still awaits official confirmation from HASiL — check again with HASiL before deciding. against the Form TP1 Explanatory Notes.

Q. What happens if the employer does not deduct PCB? A. The employer has liability under the Act (subsection 107(4)). Enforcement details — verify with HASiL; this draft does not give specific advice.

Glossary

• PCB / MTD — Potongan Cukai Bulanan / Monthly Tax Deduction.
• Remuneration — salary, wages and other payments from employment.
• e-CP39 — the electronic monthly tax deduction schedule.
• Form EA — the annual remuneration statement by the employer.
• Form TP1 / TP3 — the form for claiming deductions/rebates for PCB / the form relating to a previous employer.
• e-Filing — the online filing system via MyTax.
• CP500 — the notice of instalment payments of estimated tax.
• BNCP — Income Tax Return Form (e.g. e-BE for employees).