Navigating a latest tax method is often the most intimidating part of moving abroad. In 2026, Malaysia remains a top place for “digital wanderers” and skilled professionals, but the Lembaga Hasil Dalam Negeri (LHDN) has introduced crucial digital-first latest news.
Whether you are here on an job Pass or the DE Rantau place visa, your dwelling status decides if you pay a 30% flat tax or enjoy progressive rates starting at 0%. This simple and easy guide breaks down the 2026 legal framework to help you increase your take-home pay.
Residency & The “182-Day Rule”
In Malaysia, tax residency is not about your nationality; it is about your physical presence. Under Section 7 of the Income Tax Act 1967, your status is calculated on a calendar year basis.
The Main 182-Day Rule: You are a tax resident if you stay in Malaysia for 182 days or more in the year.
Tax Rates Based on Residency
- If you stay less than 182 days, you are a non-resident. You pay a flat 30% tax on income from Malaysia. You cannot claim personal reliefs.
- If you are a resident, you pay progressive rates from 0% to 30%. Most workers with medium pay fall in 6% to 19%. This is much lower than 30%.
Days That Count Even If You Leave
Some days away from Malaysia still count toward the 182 days. This happens if your absence is short and for good reasons.
Qualifying Temporary Absences
Days count if you leave for:
- Work travel related to your job in Malaysia.
- Medical treatment for you or your family.
- Social visits like weddings or funerals, but not more than 14 days.
Tax Residency Certificate
If you earn money in two countries, you can apply for a Tax Residency Certificate (called COR). Use Form e-Residence online. This helps with Double Taxation Agreements. It stops you from paying tax twice on the same money.
Income Categories & 2026 Exemptions
It is important to know where your income comes from. This affects if you pay tax on it.
Malaysian-Sourced Income
You must pay tax on money earned from work in Malaysia. This includes:
- Salary and bonuses.
- Benefits like a company car or housing.
All these are taxable if you work physically in Malaysia.
Foreign-Sourced Income Exemption
Good news for 2026! Residents do not pay tax on most foreign income brought into Malaysia. This exemption now lasts until December 31, 2036. But it does not include income from partnerships. The foreign income must have paid tax in its home country already.
New 2% Tax on High Dividends or Profits
Starting in 2026, there is a new rule for high earners.
- If your dividend income or profit from partnerships is more than RM100,000 in a year, the extra part pays 2% tax.
- This applies to residents and non-residents.
Special Low Tax Rates for Some Workers
- Returning Expert Programme (REP): Malaysians who come back from abroad can pay a flat 15% tax for five years.
- Knowledge Workers: Experts in special zones like Forest City or global hubs can get 15% tax rate.
These programs help skilled people.
Budget 2026: New Deductions & Reliefs
In Budget 2026, the government added reliefs for green living, family help, health, and tourism. Only residents can claim these. They lower your taxable income.
Key 2026 Personal Reliefs
| Relief Category | Max Claim (RM) | What’s New or Important in 2026? |
|---|---|---|
| Individual & Dependents | 9,000 | Basic relief for yourself and family. Automatic for residents. |
| Medical & Vaccination | 10,000 | Now includes all approved vaccines for you and family. Covers medical costs too. |
| Childcare Relief | 3,000 | Expanded to after-school centers for children up to 12 years old. |
| ESG & Home Safety | 2,500 | Includes CCTV cameras and food waste machines for green home. |
| Digital Learning | 1,000 | For online courses and professional training. |
| Visit Malaysia 2026 | 1,000 | New special relief for fees to theme parks, museums, and tourist spots. |
Pro Tip: Always keep receipts. LHDN checks medical and lifestyle claims more now. Scan and save them digitally. You must keep records for 7 years.
These reliefs can save you a lot of money. For example, families with kids and health costs can reduce tax a lot.
Compliance & Filing Tools: The Digital Reset
In 2026, everything is online. No more paper forms for most people.
Main Filing Tools
- Register for a tax number (called IG) on the ezHASiL or e-Filing portal.
- Use the HASiL website to file your return.
Different Forms
- Residents with residency status use Form BE.
- Non-residents use Form M.
Choose the right one to avoid problems.
When You Leave Malaysia
- If you stop working or leave the country, your employer must get a Tax Clearance Letter (SPC) from LHDN.
- They may hold your last salary until it is done.
- Employer must send forms CP21 or CP22A at least 30 days before you go.
- Give your HR your travel records to make it fast.
Follow these steps to avoid delays in getting your money.
Malaysia 2026 Tax Residency Summary
| Status | Stay Duration | Tax Rate | Key Advantage |
|---|---|---|---|
| Non-Resident | Less than 182 Days | 30% Flat | Simple, no need for relief claims. |
| Resident | 182 Days or More | 0% – 30% Progressive | Full reliefs like RM10,000 medical and RM3,000 childcare. |
| Short-Term | Less than 60 Days | Exempt | No tax on Malaysian work days under 60 in a year. |
| High Earner | Full Year | 2% on excess | Only 2% on dividends/profits over RM100,000. |
This table shows quick differences.
FAQs for International Workers
-
Does the day I arrive or leave count in the 182 days?
Yes. LHDN counts both arrival and departure days as full days in Malaysia.
-
Can I claim relief for my spouse who lives abroad?
Usually no. For spouse relief (RM4,000), your spouse must live with you here or have a good reason like medical treatment.
-
What if I arrive in July?
July to December is less than 182 days, so first year you pay 30% as non-resident. But if you stay long into next year and link the periods, you can change to resident status and get refund.
These common questions help many new workers.
Call to Action
Tax rules in Malaysia do not need to be hard. Start saving your receipts now for 2026. Use the new green and tourism reliefs to save money.
Next Step: Do you want a simple step-by-step guide for e-Filing your first tax return as an international worker in 2026? Comment below or share this guide with friends in Malaysia!
Disclaimer This article is only for information and education. It is not official advice. Always check the latest rules on the LHDN website or talk to a tax expert before making decisions about money or tax.