PRS Tax Relief Calculator Malaysia 2026
Calculate exactly how much income tax you save by contributing to a Private Retirement Scheme (PRS) under LHDN 2026 rules. PRS gives a separate RM3,000/year tax relief that stacks on top of your EPF + insurance relief.
What Is the Private Retirement Scheme (PRS) in Malaysia?
The Private Retirement Scheme (PRS) is a voluntary long-term retirement savings program for Malaysians, regulated by the Securities Commission Malaysia (SC) and launched in 2012. Per LHDN (Inland Revenue Board) rules, contributions to PRS qualify for an income tax relief of up to RM3,000 per year. This relief is separate from and stacks on top of your EPF/i-Saraan + life insurance contribution relief (which is capped at RM4,000–RM7,000).
For a Malaysian taxpayer at the 24% bracket (chargeable income RM100,001–RM400,000), contributing the full RM3,000 to PRS saves RM720 in income tax annually. Over 10 years, that's RM7,200 — plus all the investment growth on the PRS balance itself.
The 2026 LHDN Tax Brackets for Tax Savings Math
- RM0 – RM5,000: 0% — no tax saving
- RM5,001 – RM20,000: 1% — saves up to RM30/year
- RM20,001 – RM35,000: 3% — saves up to RM90/year
- RM35,001 – RM50,000: 8% — saves up to RM240/year
- RM50,001 – RM70,000: 13% — saves up to RM390/year
- RM70,001 – RM100,000: 21% — saves up to RM630/year
- RM100,001 – RM400,000: 24% — saves up to RM720/year
- RM400,001 – RM600,000: 25% — saves up to RM750/year
- RM600,001+: 26–30% — saves up to RM900/year
PRS vs EPF i-Saraan — Should You Do Both?
Yes — most financial advisors recommend maxing both:
- EPF i-Saraan first: 15% government match up to RM500/year is the highest immediate return. Plus i-Saraan dividend (5.5%+) is government-guaranteed.
- Then PRS for additional tax relief: The separate RM3,000 tax relief gives you extra deduction once EPF/i-Saraan/insurance relief is maxed at RM4,000.
Combined, a self-employed Malaysian can claim up to RM7,000 in retirement-related tax relief annually (RM4,000 EPF/insurance + RM3,000 PRS).
PRS Approved Fund Managers
Per Securities Commission Malaysia, eight providers are approved to manage PRS funds: AmInvestment, AIA PAM, CIMB-Principal, Hong Leong, KAF, Manulife, Public Mutual, RHB. Most offer Conservative, Moderate, and Growth fund options. New investors are typically defaulted into the age-appropriate fund: Growth (under 40), Moderate (40–50), Conservative (over 50).
PRS Withdrawal Rules
Standard PRS funds are split 70% Sub-Account A (no pre-retirement withdrawal) and 30% Sub-Account B (one withdrawal per year, with 8% tax penalty on the withdrawn amount). Tax-free withdrawals are available:
- At age 55 (full withdrawal)
- For permanent total disablement (any age)
- For death (paid to nominees)
- For permanent departure from Malaysia (one-time)
- For healthcare expenses (specific qualifying conditions)
- For housing purchases (specific qualifying conditions)
2026 PRS Enhancements
The Malaysian Budget 2026 maintained the RM3,000 PRS tax relief and introduced PRS Auto-Enrolment for new graduates entering formal employment. Some employers also offer matched PRS contributions as a benefit — verify with your HR department whether your employer participates in the matched PRS program.
Sources: Securities Commission Malaysia (sc.com.my), Lembaga Hasil Dalam Negeri LHDN (hasil.gov.my), Private Pension Administrator Malaysia PPA (ppa.my), Bank Negara Malaysia (bnm.gov.my). Last updated: May 2026.