Income Classifications In Malaysia – The T20, M40 and B40

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It is crucial to know which income group you belong to in Malaysia as it will determine various factors like your income tax, your eligibility for certain subsidies and many others. There are 3 income groups that Malaysians fall under which are T20, M40 and B40.

How are the categories determined?

Generally, the classifications are determined as:

  • T20 – Top 20% – Comprise of 1.46 million households
  • M40 – Middle 40% – 2.91 million households
  • B40 – Bottom 40% – 2.91 million households.

The smallest group (T20) here carries more than 45% of the total national income.

The data is compiled by the Department of Statistics (DOSM) that carries out the Household Income and Basic Amenities (HIS/BA) survey twice every 5 years. This is to ensure that the bar that sets the categories is updated and remains relevant every year. The latest figures released are from 2019 and will be updated from time to time.

Some of the important terms that you must know about the income classification in Malaysia are:

Household and household income – A household refers to a person or a group of people who are living in the same place, sharing in expenses and income. The average household size for 2019 in 3.9 people. Household income refers to the overall income that the entire household earns (in cash or in-kind) the average household income in 2019 is RM7901 per month.

Median and Mean Household Income – The median and mean is used to reflect the range and average income of the household incomes. Median is the ‘middle point of a range while mean is the average.

Classifying the income groups

The 3 income groups can be further classified into sub-groups where:

Income Classification Income Threshold
T20 T1 RM10,961 – RM15,039
T2 RM15,040 <
M40 M1 RM4,850 – RM5,879
M2 RM5,880 – RM7,099
M3 RM7,110 – RM8,699
M4 RM8,700 – RM10,959
B40 B1 < RM2,500
B2 RM2,501 – RM3,169
B3 RM3,170 – RM3,969
B4 RM3,970 – RM4,849

It must be noted there have been changes in the income range in the past 5 years although the differences are not much.

Between the 2016 and 2019 income range:

  • It was above RM9619 in 2016 and above RM10959 for T20
  • M40 are those with income between RM4360 and RM9619 in 2016 and has increased to RM4850 – RM10959 in 2019
  • B40 is classified for those earning RM4360 in 2016 and RM4850 in 2019.

Some important data to take note of here is that:

The classification of the income group is not permanent which can change when necessary. This is because they reflect the actual groupings (and percentages) of the population in Malaysia. As such, they could change when necessary. For instance, there might be a time when more M40 earners fall into the B40 category and that would change the numbers to M35 and B45 respectively.

These numbers are determined by the country’s GDP and taking into consideration factors like inflation, the changing standards of living and the market situation.

To better reflect that actual situation, the median income level would be more accurate. Below is a table of the median household income classified by the Malaysian states.

State Median Household Income 2019
W.P. Kuala Lumpur 10549
W.P. Putrajaya 9983
W.P. Labuan 6726
Selangor 8210
Pulau Pinang 6169
Kelantan 3563
Johor 6427
Negeri Sembilan 5055
Pahang 4440
Sarawak 4544
Perlis 4594
Perak 4273
Melaka 6054
Terengganu 5545
Sabah 4235
Kedah 5522

Meanwhile, the top 20 highest median household incomes in terms of districts were mainly from Selangor. They are:

District Median Household Income 2019
Petaling, Selangor 8993
Sepang, Selangor 8937
Gombak, Selangor 8501
Hulu Langat, Selangor 8361
Klang, Selangor 7588
Kulai, Johor 7536
Bintulu, Sarawak 7380
Johor Bahru, Johor 7342
Kuala Langat, Selangor 6950
Timur Laut, Penang 6902


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