1. What is a PCB Calculator with Overtime and Allowance?

Definition: This calculator estimates the Monthly Tax Deduction (PCB) based on income including overtime and allowances, following the official Malaysian tax formula.

Purpose: It helps employees and employers calculate accurate monthly tax deductions when additional income components are involved.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( PCB \) — Monthly tax deduction (RM)
• \( P \) — Income including overtime and allowance (RM)
• \( M \) — Monthly deduction (RM)
• \( R \) — Tax rate (%)
• \( B \) — Tax rebate (RM)
• \( Z \) — Total Zakat/Fi (RM)
• \( X \) — Total tax relief (RM)
• \( n \) — Number of months (typically 12)

Explanation: The formula calculates the taxable amount, applies the tax rate, adjusts for rebates and deductions, then spreads the annual tax over the months.

3. Importance of Accurate PCB Calculation

Details: Proper PCB calculation ensures compliance with tax regulations, avoids underpayment penalties, and prevents excessive tax deductions.

4. Using the Calculator

Tips: Enter all income including overtime and allowances, applicable deductions, tax rate, rebates, and the number of months. All monetary values in RM.

5. Frequently Asked Questions (FAQ)

Q1: Why include overtime and allowance in income?
A: Malaysian tax law requires all employment income including bonuses, overtime, and allowances to be included in PCB calculations.

Q2: What's the typical value for n?
A: Normally 12 months, but may vary for new employees or those joining mid-year.

Q3: Where can I find my tax rate (R)?
A: Refer to the latest LHDN tax rate schedule based on your annual taxable income bracket.

Q4: What's included in X (Tax Relief)?
A: Includes EPF contributions, life insurance, medical insurance, education fees, and other approved reliefs.

Q5: How is the n+1 divisor used?
A: This accounts for the current month's payment while spreading the annual tax liability evenly.