| Chargeable Income | RM | Rate | Tax (RM) |
| On the first | 2,500 | 0% | 0 |
| On the next | 2,500 | 1% | 25 |
| On the first | 5,000 | - | 25 |
| On the next | 15,000 | 3% | 450 |
| On the first | 20,000 | - | 475 |
| On the next | 15,000 | 7% | 1,050 |
| On the first | 35,000 | - | 1,525 |
| On the next | 15,000 | 13% | 1,950 |
| On the first | 50,000 | - | 3,475 |
| On the next | 20,000 | 19% | 3,800 |
| On the first | 70,000 | - | 7,275 |
| On the next | 30,000 | 24% | 7,200 |
| On the first | 100,000 | - | 14,475 |
| On the next | 50,000 | 27% | 13,500 |
| On the first | 150,000 | - | 27,975 |
| On the next | 100,000 | 27% | 27,000 |
| On the first | 250,000 | - | 54,975 |
| Exceeding | 250,000 | 28% | - |
After calculating the actual paying tax verse your chargable income, you can find out the actual effective income tax rate you are paying. Below show a list of effective tax rate
| income | tax | effective rate |
| 2500 | 0 | 0.00% |
| 5000 | 25 | 0.50% |
| 7500 | 100 | 1.33% |
| 10000 | 175 | 1.75% |
| 12500 | 250 | 2.00% |
| 15000 | 325 | 2.17% |
| 17500 | 400 | 2.29% |
| 20000 | 475 | 2.38% |
| 22500 | 650 | 2.89% |
| 25000 | 825 | 3.30% |
| 27500 | 1000 | 3.64% |
| 30000 | 1175 | 3.92% |
| 32500 | 1350 | 4.15% |
| 35000 | 1525 | 4.36% |
| 37500 | 1850 | 4.93% |
| 40000 | 2175 | 5.44% |
| 42500 | 2500 | 5.88% |
| 45000 | 2825 | 6.28% |
| 47500 | 3150 | 6.63% |
| 50000 | 3475 | 6.95% |
| 52500 | 3950 | 7.52% |
| 55000 | 4425 | 8.05% |
| 57500 | 4900 | 8.52% |
The obvious fact is that the more your chargable income is, the more tax you pay.
However, there is a small 'gap jump' due to the way the tax rate is implemented, so called step rate.
The blue graph shows the effective tax rate you pay based on your chargable income on X axis.The bar belows shows the differences between 2 effective tax rate, or so call the increase gap.
Basically it means if your chargable income suddenly go above certain range, your effective paying rate will S U D D E N L Y increase more than usual as shown in the pink bar above. Namely everytime when it goes beyond the step income, ie. RM 5,000 RM 20,000 RM 35,000 etc. However this gap increase becomes less significant when it goes beyond RM 35,000.
If you look carefully at the effective income tax rate graph, you may observe it has a curve pattern like below.
This curve confirms that the B E G I N I N G of the curve has a S T E E P E R rate than the E N D of the curve.
So the B E S T income for your income tax planning is when your chargable income is close to but not exceed
RM 5,000
RM 20,000
RM 35,000 etc.
The W O R S T income is when you go slightly beyond;
RM 5,000
RM 20,000
RM 35,000 etc.
So when you are in the worst category, perhaps you can buy more books or donate some money ?
