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Borang B · YA 2025

Freelance and business income tax, worked out

For sole proprietors, partners and freelancers with business income in the 2025 year of assessment. Enter your business income and expenses, any salary and your reliefs to see what you owe after CP500 instalments. Everything is calculated in your browser.

YA 2025 rates & reliefsBusiness, salary and other incomeCalculated in your browser

Business income

Business income for the year

Sales, fees and commissions, before expenses

Allowable business expenses

Costs of earning that income, such as rent, supplies, staff, software and work travel

Capital allowances

For equipment, laptops and vehicles used in the business

Unused losses from earlier years

Reduce business income only

Other income and donations

Employment income

Salary, bonus and allowances, if you also have a job

Rental, interest and other income

After allowable deductions

Approved donations

Capped at 10% of aggregate income

Tax already paid

CP500 instalments paid

Bimonthly instalments paid for the year

PCB deducted from salary

From your EA form, if you have a job

Family Spouse has no income (or joint assessment)

Children under 18

Children 18+ in diploma/degree

Contributions

EPF paid (max RM4,000)

SOCSO + EIS (max RM350)

Life insurance / takaful (max RM3,000)

Medical & education insurance (max RM4,000)

More reliefs

Lifestyle (max RM2,500)

Books, phone, computer, internet

Sports (max RM1,000)

Equipment, gym, facility rental

Medical expenses (max RM10,000)

Serious illness, check-ups, dental, vaccines

Parents' medical care (max RM8,000)

Your education fees (max RM7,000)

SSPN net savings (max RM8,000)

PRS contributions (max RM3,000)

Zakat paid (rebate)

Tax payable for YA 2025

RM 0.00

Your tax by income band

Chargeable income band	Rate	Taxed amount	Tax

Reliefs applied

Relief	You entered	Limit	Allowed

How Form B tax is worked out

Form B adds your business profit to your other income, then taxes the total at the same rates as an employee. The order matters, because some deductions only apply to business income.

Adjusted business income: business income minus allowable expenses.
Statutory business income: minus capital allowances, then minus unused losses from earlier years.
Aggregate income: add salary, rental, interest and other income.
Total income: minus this year's business loss (if any) and approved donations (up to 10% of aggregate income).
Chargeable income: minus your personal reliefs. The tax rates and RM400 rebate are the same as for Form BE.
Balance: tax payable minus zakat, CP500 instalments and any PCB already paid.

Which expenses can you deduct?

An expense is deductible when it was wholly and exclusively incurred in producing your business income. Keep receipts and invoices for at least seven years.

Usually deductible

Rent, utilities and internet for your business premises
Stock, materials and supplies
Staff salaries, plus their EPF and SOCSO
Software, subscriptions, advertising and platform fees
Accounting, tax and other professional fees
Travel for work (not between home and your usual workplace)

Not deductible

Personal and family spending, including your own drawings
Your own EPF contributions (claim them as a relief instead)
Income tax, penalties and fines
The cost of equipment or vehicles (claim capital allowances instead)
Usually half of client entertainment

Capital allowances

Equipment, computers and vehicles are not deducted as expenses. Instead you claim capital allowances: an initial allowance in the year you buy the asset, then an annual allowance each year. Assets costing RM2,000 or less each can be claimed in full in the year of purchase, up to RM20,000 a year (no cap for SMEs).

CP500 instalments

If you have business or rental income, LHDN may issue a CP500 notice asking you to pay tax in six bimonthly instalments, based on an earlier year's tax. These are advance payments, not extra tax: when you file Form B, they are set off against the tax you owe, and any overpayment is refunded.

Form B deadline

Form B is due by 30 June each year, or 15 July if you file through e-Filing on MyTax. For YA 2025, that was 30 June 2026 (15 July 2026 on e-Filing). Employees without business income file Form BE earlier, by 30 April (15 May on e-Filing).

Only have a salary? Use the Form BE income tax calculator.

Frequently asked questions

Who has to file Form B?

Resident individuals with business income: sole proprietors, partners in a partnership, and freelancers, consultants and gig workers who invoice in their own name. If you have a salary and any business income, you file Form B, not Form BE. Directors who only take a salary and dividends from their own Sdn Bhd file Form BE.

Is a sole proprietor taxed differently from an employee?

Not in the rates. Business profit is added to your other income and taxed at the same personal rates (0% to 30%), with the same reliefs and RM400 rebate. The difference is that you deduct business expenses and capital allowances first, and pay during the year through CP500 instead of PCB.

What if my business makes a loss?

A loss this year can reduce your other income for the same year, such as salary or rental. Any loss left over can be carried forward for up to 10 years of assessment, but can then only reduce future business income.

What are capital allowances?

The cost of equipment or a vehicle isn't deducted in one go. You claim it as capital allowances over several years instead. Assets costing RM2,000 or less each can be claimed in full in the year you buy them (capped at RM20,000 a year, except for SMEs).

Should I register a Sdn Bhd instead?

A company pays corporate tax (from 15% for qualifying small companies), and you pay personal tax only on the salary you draw. Running a company costs more, though, in company secretary, audit and compliance fees. It can make sense once profits are high; ask a tax agent about your situation.

Sources

Figures last checked September 2026.

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