Young Family (Self Employed)

Aina is a contract worker who is married. Her husband has no income as he has not worked in the last two years. She made a total of RM80,000 in the year. She has two kids. One child is 12 years old and the other is 18 years old and doing a diploma that costs RM8,000 for the year.

As a contract worker, she has no EPF contributions but she contributes 10% of her earnings to her Private Retirement Scheme (PRS). During the year, she paid RM5,000 for medical insurance. She bought one laptop for RM2,400. She also supports her father.

Description RM Explanation
Salary per annum 80,000.00 Total income earned in the year
All other income – No other income
Total income 80,000.00  
Tax reliefs   
– Personal and Family (automated) -9,000.00 Automated relief given to all individuals
– Personal and Family (Wife) -4,000.00 Relief for husband/wife who doesn’t work (maximum RM4,000)
– Personal and Family (Child) -2,000.00 RM2,000 relief for each unmarried child under 18 years
-Personal and Family (Child) -8,000.00 Relief for each unmarried child over 18 years doing a diploma or any higher qualification (maximum RM8,000)
-Personal and Family (Parent) -1,500.00 If you take care of a parent who does not earn an income, you can claim RM1,500 for each parent. (If you have claimed this, your brothers or sisters can’t).
– PRS -3,000.00 Aina can only claim this amount as the relief for the PRS scheme contributions is limited to RM3,000
-Medical -3,000.00 You can claim this relief of up to RM3,000 if you have expenses related to education or medical insurance.In this case, although Aina spent RM5,000 on medical insurance, she can only claim for the maximum amount.
– Lifestyle -2,400.00 The lifestyle relief is limited to RM2,500. However, since she only spent RM2,400, she can only claim that amount.
Total Chargeable income 47,100.00 Although Aina earned RM80,000 during the year, her total chargeable income is RM47,100 because of the tax reliefs.
Tax payable on RM47,100 of chargeable income

 

  
– On the first RM5,000 (0%) – Based on tax rate for the assessment years 2018-2019
– On the next RM15,000 (1%) 150.00
– On the next RM15,000 (3%) 450.00
– Balance RM12,100 (8%) 968.00
Tax Payable 1,568.00
Tax Rebates   
– Zakat -1,000.00 Zakat payments for the year
– Rebate for wife with no income – 400.00 Rebate for husband or wife who has no income or earns below RM34,000 of chargeable income.
Total Tax Payable 168.00* From her tax payable of RM1,568, the total tax Aina has to pay is only RM168 because of the deductions from her tax rebates.

*If you are self employed, and don’t make monthly payments towards your taxes, you will have to pay the full amount when you file your taxes.

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