Worked example: RM87 a month back in your pocket
Daniel is single, earns RM8,000 a month, and has never submitted TP1.
- Without TP1: annual income RM96,000 − RM9,000 (personal) − RM4,000 (EPF) = RM83,000 chargeable. Tax: RM150 + RM450 + RM900 + RM2,200 + (RM13,000 × 19% = RM2,470) = RM6,170 a year. PCB = RM514.20 a month.
- With TP1 declaring lifestyle relief RM2,500 and PRS contributions RM3,000: chargeable income falls to RM77,500. Tax: RM150 + RM450 + RM900 + RM2,200 + (RM7,500 × 19% = RM1,425) = RM5,125 a year. PCB = RM427.10 a month.
- Saving: RM87.10 a month, RM1,045.20 a year — from two reliefs alone, with no change in salary.
The TP1 reliefs checklist
| Relief | Amount used in this article | What counts (keep receipts) |
|---|---|---|
| Personal relief | RM9,000 (automatic) | Everyone — no action needed |
| EPF contributions | Up to RM4,000 | Your employee EPF, already in payroll |
| Spouse relief | RM4,000 | Spouse with no income |
| Child relief | RM2,000 / RM8,000 per child | Under 18 / full-time tertiary education |
| Lifestyle relief | RM2,500 | Books, internet subscription, computer, smartphone, tablet, sports and skill courses as listed on TP1 |
| PRS contributions | RM3,000 | Approved Private Retirement Scheme contributions |
| Medical and takaful insurance | Cap as shown on the current TP1 form | Medical, education and takaful premiums for self, spouse and children |
| Zakat | Ringgit-for-ringgit | Monthly zakat deducted through salary reduces PCB by the same amount, not just chargeable income |
Note on the medical insurance cap: published summaries differ on the YA2026 cap for medical and education insurance, so this article deliberately does not state a figure for it. Use the cap printed on the current TP1 form you submit.
How to submit TP1 (step by step)
- Ask HR for Borang TP1 (or download it from LHDN's site) and fill in every relief you qualify for — do not guess amounts.
- Attach or keep the supporting receipts. You do not always need to send them to HR, but LHDN can ask for them later, so keep them for 7 years.
- Submit it promptly, and again whenever your circumstances change — marriage, a child, a new policy, a new PRS contribution.
- Check your next payslip: your PCB should fall from the following month. If it does not, ask HR whether the form was processed.
- At e-Filing, claim the same reliefs again in your return. TP1 only adjusts the monthly estimate; the return settles the final tax.
What does NOT reduce your PCB
- Asking HR for a lower rate without a qualifying relief.
- Reliefs you do not actually qualify for — claiming them can mean back taxes and penalties.
- Salary-sacrifice arrangements that are not recognised by LHDN.
- Donations or expenses not listed on TP1.
Internal links
- TP1 guide (full relief table)
- Net salary calculator (test your new PCB)
- PCB tax bracket table 2026
- PCB guide
- Bonus PCB explained
FAQs
Q: Is reducing PCB through TP1 legal?
A: Yes — TP1 exists precisely for this. It is declaring genuine reliefs, not avoiding tax.
Q: When will my PCB drop after submitting TP1?
A: From the next payroll month processed after HR accepts the form.
Q: Do I still claim these reliefs at e-Filing?
A: Yes. TP1 adjusts the monthly estimate; your tax return claims them finally.
Q: What if I over-claim?
A: Your final tax will be higher at filing, and you may owe the difference. Only claim what you qualify for.
Q: Does zakat really reduce PCB ringgit-for-ringgit?
A: Yes — monthly zakat deducted through salary is subtracted from the PCB itself, which is more powerful than an ordinary relief.
Q: Can I submit TP1 more than once a year?
A: Yes — submit an update whenever your circumstances change.
Q: What if my employer refuses TP1?
A: Employers are required to process valid TP1 declarations for MTD purposes. Raise it with HR in writing, and verify your position with LHDN's e-PCB calculator.
Q: Does TP1 help in bonus month too?
A: Yes — lower chargeable income means a lower additional-remuneration PCB as well.
Not tax advice.