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Employee Not Eligible for MTD but Liable to Tax

An employee whose monthly remuneration after EPF deduction is below RM2,451 may be liable to income tax even though his remuneration is not subject to tax deduction under the MTD.

It is the responsibility of the employer to inform the nearest IRBM office to have a file registered for that employee by filling up form CP22. The form can be downloaded here.

The employee is also responsible to register an income tax file if his employer fails to do so.

Beginning from the year of assessment 2009, director fees or bonus relating to a year which is received in any current year, that remuneration becomes part of remuneration in the current year it is received. Use Form CP39 only (Pin. 2/05) for current month MTD payment.

For additional remuneration (other than bonus and directors fee) for prior years before year 2009 which is received in the current year, MTD calculation shall be calculated by using Bonus Formula and Schedule of Monthly Tax Deduction for the relevant year.

Example 1:

Additional remuneration of arrears commission for 2008 to be paid in year 2009.

  1. Use STD Schedule (Amendment 2004).
  2. Remuneration in December 2008 will be taken as a basis for computation of MTD for Step [A] Bonus Formula.
  3. Use a separate form when making MTD payment for current month remuneration and additional remuneration.
  4. Form CP39A for additional remuneration MTD.
  5. Form CP39 for current month MTD.

Example 2:

Additional remuneration of arrears commission for 2009 to be paid in year 2010.

  1. Use formula computerised calculation method MTD 2009/Kalkulator 2009.
  2. Click MTD calculation year 2009.
  3. Select previously employed in current year.
  4. Click Month of December.
  5. Accumulated remuneration/MTD/Rebate/Deduction until before current month for current year (including from previous employer)
  6. Do not input the current remuneration and just key in amount of arrears received as additional remuneration as well as EPF (if any). Clicks calculate.
  7. Use Form CP39A to pay MTD for additional remuneration(arrears commissions).

If additional remuneration for the year 2009 is paid in the current year, the MTD calculation is as follows;

  • Schedule of Monthly Tax Deduction for year 2009

The MTD calculation for Step 1 in the Additional Remuneration Formula shall be based on the normal remuneration for the month of December or last month of employment for the year by using the Schedule of Monthly Tax Deductions applicable for that year.

  • Computerised Calculation Method
The MTD calculation shall take into account the total remuneration, deductions, rebate and MTD for year 2009.
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Updated : : 2016-02-26 16:57:00

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