Freelancer Tax Malaysia 2025 — Complete Guide
Everything Malaysian freelancers need to know about income tax — what income to declare, deductible expenses, tax rates, key deadlines, and step-by-step filing instructions.
Disclaimer: This guide is for informational purposes only. Tax laws change frequently. Always consult a registered tax agent or refer to LHDN (lhdn.gov.my) for official guidance specific to your situation.
Do freelancers need to pay tax in Malaysia?
Yes. As a Malaysian freelancer, you are classified as a self-employed individual and are required to declare and pay income tax on your earnings — just like any employee or business owner.
You must register with LHDN and file your taxes annually using Form B (for individuals with business income) instead of Form BE (which is for employment income only).
You are required to register for income tax if your annual income exceeds RM 34,000 (after EPF deduction). Even if your income is below this threshold, it is good practice to register and file a nil return.
What counts as freelance income?
All income you earn from freelance work must be declared, including:
Foreign income update: From 1 January 2022, foreign-sourced income remitted to Malaysia is taxable. This affects freelancers paid by overseas clients in foreign currency.
2025 individual income tax rates
| Chargeable Income (RM) | Rate | Tax on this band |
|---|---|---|
| 0 – 5,000 | 0% | RM 0 |
| 5,001 – 20,000 | 1% | RM 150 |
| 20,001 – 35,000 | 3% | RM 450 |
| 35,001 – 50,000 | 8% | RM 1,200 |
| 50,001 – 70,000 | 13% | RM 2,600 |
| 70,001 – 100,000 | 21% | RM 6,300 |
| 100,001 – 400,000 | 24% | RM 72,000 |
| 400,001 – 600,000 | 24.5% | RM 49,000 |
| 600,001 – 2,000,000 | 25% | RM 350,000 |
| Above 2,000,000 | 30% | – |
Chargeable income = total income − allowable deductions − personal reliefs. Source: LHDN 2025.
Deductible business expenses
As a self-employed freelancer, you can deduct wholly and exclusively incurred business expenses from your income. This reduces your taxable income and therefore your tax bill.
Office & equipment
Professional services
Marketing
Transport
Keep receipts for all expenses. If you work from home, you can claim a proportional share of rent, utilities, and internet costs.
Key personal reliefs (2025)
Personal reliefs reduce your chargeable income. Common reliefs for freelancers:
Important deadlines
Form B filing deadline (online via MyTax)
File your annual income tax return for the previous year. e-Filing deadline is 30 April for Form B.
Estimated tax (CP500) instalments
LHDN may issue a CP500 notice requiring bi-monthly instalment payments of estimated tax. Failure to pay incurs 10% penalty.
Tax year end
The Malaysian tax year runs from 1 January to 31 December. Start gathering your income and expense records in January.
How to register and file
Register with LHDN
Register at MyTax (mytax.hasil.gov.my). You need your MyKad, bank account details, and employment/business information. You will receive an income tax reference number (No. Cukai Pendapatan).
Keep records throughout the year
Save all invoices, receipts, and bank statements. Use accounting software or a spreadsheet to track income and expenses monthly — don't wait until tax season.
File Form B online
Log in to MyTax, select e-Filing, and choose Form B. Declare all income, claim your deductions, and apply personal reliefs. The system calculates your tax automatically.
Pay any tax due
If you owe tax, pay via FPX (online banking) through MyTax. If LHDN owes you a refund, it is typically credited to your bank account within 30–90 days.
Common tax mistakes freelancers make
Not registering for tax because income "feels low" — register anyway to avoid penalties
Mixing personal and business accounts — open a separate business bank account
Not keeping receipts for expenses — store digital copies in Google Drive or Dropbox
Forgetting to declare foreign income (taxable in Malaysia since 2022)
Not claiming all eligible reliefs and deductions — see a tax agent at least once
Missing the CP500 instalment payments — incurs immediate 10% penalty
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