Understanding Potongan Cukai Berkala (PCB)
Introduction
Potongan Cukai Berkala (PCB), also known as Monthly Tax Deduction, is an integral mechanism within Malaysia’s tax structure, designed primarily to facilitate the gradual collection of income tax from an employee’s earnings throughout the year. PCB acts as a form of pay-as-you-earn tax, which helps employees manage their tax liabilities by distributing their tax payments over 12 months, thus avoiding the burden of a lump sum payment.
The Procedure of Monthly Tax Deductions
The system calculates deductions based on an individual’s monthly income, taking into account personal and dependent reliefs. Employers are responsible for withholding the correct amount from their employees’ salaries and remitting it directly to the Malaysian Inland Revenue Board. The PCB amount is determined by referencing tax tables provided by the government, which consider the employee’s marital status, number of dependents, and any applicable tax reliefs.
At the end of the tax year, employees must still file an annual income tax return to reconcile their total yearly income and the taxes paid through PCB. This process ensures that individuals either receive a tax refund if they have overpaid or make additional payments if their deductions were insufficient.
Conclusion
PCB not only simplifies tax compliance for employees but also assists in the steady income flow for the government, supporting national fiscal stability.
