There are tax deductions available for your employee's children. Essentially, the deduction reduces the employee's chargeable income and their PCB.

For tax purposes, a “child” is an “unmarried dependent legitimate child or stepchild or adopted child”; no deduction can be claimed if the child is earning his/her own income and his/her total income (not including scholarships/grants) exceeds the amount of deduction that would otherwise be allowed.

Here are the details:

a) Below the age of 18

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

b) 18 and above (not in higher education)

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

c) 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.

d) 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.

For spouses who have opted for separate assessment, it is advisable for the parent with the higher income to claim the child relief in order to minimize their tax liability.

Spouses living together cannot claim 50% each. However, if both husband and wife are separated and they are spending on the child's maintenance, then they are able to claim 50% each.

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This can be enabled directly in Talenox under the employee's profile. 😄

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