Published On: 13/09/2025By

Potongan Cukai Bulanan (PCB), or Monthly Tax Deduction (MTD), is a key part of payroll compliance for all Malaysian employers. It ensures employees pay their income tax in manageable monthly amounts, and when done correctly, it protects your company from LHDN penalties while giving employees peace of mind.

This guide explains what PCB is, how to calculate it, the payment methods, deadlines, and best practices every HR professional should know.

What Is PCB in Malaysia?

PCB, or Potongan Cukai Bulanan, is the system where employers deduct a portion of an employee’s monthly salary and remit it to Lembaga Hasil Dalam Negeri (LHDN) as advance income tax.

The main purposes of PCB are to:

  • Spread out income tax payments over 12 months instead of paying in one lump sum at year-end.

  • Reduce the financial burden on employees and ensure consistent government revenue.

  • Act as a prepayment: after annual tax filing, employees may either get a refund (if they overpaid) or pay the balance (if underpaid).

Who Is Responsible for PCB?

  • Employers must calculate, deduct, and remit PCB every month.

  • Employees do not directly pay PCB, but they must still file their annual income tax return to reconcile final tax liability.

Deadlines for PCB Payment

Employers must submit PCB by the 15th of the following month.
If the 15th falls on a weekend or public holiday, payment must be made on the next working day.

⛔ Penalties for late payment

  • LHDN may impose fines, late payment charges, or legal action.

  • Penalties can be 10% or more of the outstanding PCB, which can add up quickly.

Employer Responsibilities in PCB

To stay compliant, employers must:

1. Register as an Employer with LHDN

  • Obtain an Employer E Number via the MyTax portal.

  • This is needed to submit PCB.

2. Deduct PCB Correctly from Employee Salaries

  • Based on salary, EPF/SOCSO contributions, dependents, and reliefs.

  • Update deductions if employees provide new details (marriage, children, TP1 form for reliefs).

3. Submit PCB on Time

  • Always submit and pay before the 15th.

  • Keep proof of payment (receipts, online confirmations).

4. File Annual Reports

  • EA Form: Issue to employees by the last day of February.

  • Form E & CP8D: Submit to LHDN by 31 March (manual) or 30 April (online).

How to Calculate PCB for Employees

PCB is not a fixed amount. It depends on:

  • Monthly income (salary, allowance, bonuses)

  • EPF/SOCSO contributions

  • Number of dependents or children (Form TP1)

  • Other tax reliefs or zakat

Ways to calculate PCB:

  • Use LHDN’s PCB Table (Jadual PCB)

  • Use LHDN’s e-PCB calculator

  • Use payroll software for automated calculation

💡 Pro Tip: Manual calculations are error-prone. With Pandahrms, employers can auto-calculate PCB together with EPF, SOCSO, and EIS — saving time and reducing costly errors.

How to Submit PCB

Employers can submit PCB through LHDN’s online systems:

  • e-CP39: Manual entry (ideal for small businesses)

  • e-PCB: Regular submissions with online records

  • e-Data PCB: For bulk uploads from payroll software (ideal for larger companies)

Submission steps:

  1. Log in to MyTax (ezHasil)

  2. Select e-CP39 / e-PCB / e-Data PCB

  3. Fill in or upload employee PCB details

  4. Verify and confirm submission

  5. Save the CP39 submission form as proof

How to Pay PCB

Employers can pay PCB using these methods:

1. Online Banking FPX (via MyTax)

  • Log in to MyTax

  • Select PCB payment → choose FPX and your bank (Maybank, CIMB, RHB, Public Bank, Hong Leong, AmBank, Bank Islam)

  • Confirm payment and save the receipt

2. ByrHASiL Portal

3. Banks and Appointed Agents

  • Pay at appointed banks or Pos Malaysia counters

  • CIMB also allows cheque deposit kiosks

4. Auto Calculation via Payroll Software

  • Use payroll software to auto-calculate PCB for each employee

  • Download the CP39 / e-Data PCB file from the system

  • Upload the file to LHDN’s e-PCB / e-Data PCB portal and make payment via FPX or other methods

Filing & Reporting Obligations

To stay fully compliant, employers must also complete these annual reporting duties:

EA Form (Employee Statement of Remuneration)

  • Issue to each employee by the last day of February

  • Summarises total annual salary, benefits, EPF, and PCB deductions

  • Employees need this to file their tax returns

Example: For 2024 income, the EA Form must be issued by 29 February 2025.

Form E (Employer’s Annual Return)

  • Submit to LHDN every year

  • Reports number of employees, remuneration, PCB deducted, and contributions

  • Due dates: 31 March (manual) / 30 April (online)

  • Must attach CP8D (employee remuneration details)

Employee Notifications to LHDN

Employers must also notify LHDN for certain events:

  • Form CP22 – When a new employee joins

  • Form CP22A – When an employee resigns, retires, or ends contract (employers must withhold salary until LHDN clearance)

  • Form CP21 – When an employee leaves Malaysia permanently

Why Use Pandahrms to Handle PCB

Manually calculating PCB, preparing EA forms, and uploading CP39 files can be time-consuming.
With Pandahrms, employers can:

✅ Automate PCB, EPF, SOCSO, and EIS deductions
✅ Generate e-CP39 files for LHDN submission
✅ Prepare EA Forms and CP8D reports instantly
✅ Reduce errors and save valuable HR time

Final Thoughts

Paying PCB is a legal duty that Malaysian employers cannot afford to ignore. By calculating accurately, paying on time, and filing the right reports, you’ll avoid penalties and stay fully compliant with LHDN requirements.

Instead of struggling with manual calculations, let Pandahrms automate your payroll and compliance — so you can focus on growing your business.