What is meant by MTD or PCB?
- PCB refers to “Potongan Cukai Bulanan” which is “Monthly Tax Deduction” (MTD)
- Monthly deductions contribute toward the payment of employee income taxes at the end of the financial year.
- This system is designed to avoid the issues that come with requiring payment of a large sum at the end of the year from employees.
Payments that liable for PCB contribution
- Wages
- Overtime payment
- Commission
- Allowance
- Bonus/ Incentive
- Director fees
- Perquisite
- Employee’s share option scheme (ESOS)
- Tax is borne by the employer
- Gratuity
- Compensation for loss of employment
- Other payments in addition to normal remuneration for the current month
