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Will Salary Increment Brings Higher Tax?

A friend of mine who is Senior Manager of manufacturing industry recently got a pay rise of RM500, which increasing his monthly income to RM10,500 and putting him in a much higher tax bracket. He came back to me to ask whether should he take the pay rise?

tax on salary increment

Now, I would like to share with you the percentage of the increment that goes tax when the salary increase by RM500 per month.

After calculated, we found that the increment of RM6,000 is taxed at 24.34%. Do you think is it worthwhile?

Having said that, compared to our neighbor across the country, the Malaysian effective tax rate is a notch higher. Therefore, I think our Malaysia government should reduce the personal tax rates to enhance our competitive edge. Don’t you think so?

Tags: , , , July 29th, 2011 Posted in Finance Tips, Income Tax | 2,594 views

One Response to “Will Salary Increment Brings Higher Tax?”

  1. Anti Says:

    I just can’t believe there is someone refusing a pay rise simply because of higher payble tax !!!???

    Unless for a total increment of RM6000 per year, your tax is increased by RM6001.



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