Certain tax deductions are available for children under the charge of the employee. The deduction reduces the employee’s chargeable income and therefore their PCB. For tax purposes, a “child” is an “unmarried dependent legitimate child or stepchild or adopted child”. Please note that no deduction can be claimed if the child is in receipt of their own income and their total income (not including scholarships/grants) exceeds the amount of deduction that would otherwise be allowed.

Below the age of 18

  • For each child below the age of 18 you are allowed to claim RM2,000 annually.

18 and above (not in higher education)

  • For each child aged 18 and above in full time education (A-levels, foundation, etc) you can claim RM2,000 annually.

18 and above (in higher education)

  • For each child studying within Malaysia for a diploma or higher, you can claim RM8,000 annually.

  • For each child studying outside Malaysia for a degree or higher, you can claim RM8,000 annually.

Disabled Children

  • For each disabled child, you can claim RM6,000 annually irrespective of age.

  • For each disabled child in higher education, you can claim RM14,000 annually.

Which spouse should claim for child tax relief?

If the spouses are not separated, one spouse should claim for 100% of the tax deduction while the other spouse cannot claim (0%). it is advisable for the parent with the higher income to claim the child relief in order to minimise their tax liability. Spouses living together cannot claim 50% each. If the husband and wife are separated and both spending on the child’s maintenance, they are allowed to claim 50% each.

Read more about:

FAQs

Some frequently asked questions...

An annual tax deduction of RM 2,000 can be claimed for each dependent child under 18.

An annual tax deduction of RM 2,000  can be claimed for each dependent child aged 18 and above in full-time education but not in higher education (e.g. A-levels, foundation).

An annual tax deduction of RM8,000 can be claimed for dependent children over 18 studying for a diploma or higher qualification in Malaysia. If outside Malaysia, the child must study for a degree or higher qualification for the deduction to be claimed.

For each disabled child, the annual tax deduction is RM 6,000 irrespective of age. If the disabled child is in higher education, the annual tax deduction increases to RM 14,000.

If the spouses are not living separately, one spouse must claim the full tax deduction (100%), while the other spouse cannot claim (0%). The parent with the higher income should claim the tax deduction to minimise the tax liability.

In cases where the husband and wife are separated, and both contribute towards the maintenance of the child, they are permitted to claim 50% each.

Streamline your payroll for FREE!

Experience seamless payroll management at no cost! No obligations, no credit card details required.

Get started

Copyright © 2023 Payroll Panda Sdn Bhd. All Rights Reserved.