Monthly Tax Deduction (MTD) & Potongan Cukai Bulanan (PCB)

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