Malaysia’s 2025 Tax Relief Updates: What Employers Need to Know
As we step into 2025, businesses must stay updated on the latest tax relief changes that will impact Monthly Tax Deductions (MTD). These updates, announced by the government, introduce new benefits for employees, expanded relief categories, and revised eligibility conditions.
At HR2eazy, we are committed to keeping your payroll processes smooth and compliant. Our system will automatically reflect the 2025 tax relief changes from January 2025. However, to ensure a seamless transition, we recommend completing all 2024 transactions before February 2025.
Here’s a summary of key tax relief updates for 2025:
1. Expanded Medical Tax Relief
Coverage now includes self-examination devices (e.g., glucometer, blood pressure monitor) and disease detection tests (e.g., blood tests, mammograms, ultrasounds).
Relief for children’s medical treatments (autism, ADHD, Down syndrome, etc.) increased from RM4,000 to RM6,000.
2. Increased Lifestyle Tax Relief
Sports-related tax relief (equipment, facilities, and competition fees) now covers parents as well.
3. Medical and Caregiving Relief for Parents
Expanded to include grandparents.
Full medical examinations now cover vaccination expenses.
4. Extended Childcare Relief
Tax relief for childcare fees (children aged 6 and below) extended until 2027.
5. Education Savings Incentives
SSPN tax relief (up to RM8,000) now claimable by either parent.
Withdrawals for education expenses won’t impact the eligible relief amount.
6. Private Retirement Scheme (PRS) Relief Extension
PRS tax relief extended until 2030, encouraging long-term retirement savings.
7. Higher Tax Relief for Education & Medical Insurance
Increased limit from RM3,000 to RM4,000.
8. Green Tax Incentives
EV charging facilities & food waste composting machines now qualify for up to RM2,500 relief.
Claims allowed once in a 3-year assessment period
9. Reintroduction of First Home Loan Interest Relief
Tax relief of up to RM7,000 for homes up to RM500,000.
Tax relief of up to RM5,000 for homes priced RM500,001 - RM750,000.
Applies to first-time home buyers with purchase agreements between 2025-2027.
10. Increased Relief for Persons with Disabilities
Individual relief: RM7,000
Disabled spouse relief: RM6,000
Disabled unmarried child relief: RM8,000
Stay Compliant & Let HR2eazy Simplify Your Payroll
With HR2eazy’s automated payroll system, all these updates will be reflected automatically from January 2025, ensuring compliance and accuracy in tax calculations
Want to stay ahead? Let HR2eazy handle your HR & payroll needs!
Contact us today to learn how our HRMS can streamline your payroll process!
