How much tax relief do I get for a PRS contribution?

Contributions to a Private Retirement Scheme (Skim Persaraan Swasta) earn a personal tax relief (pelepasan cukai) of up to RM3,000 a year, which LHDN lists for year of assessment 2025. The tax it saves is that amount taken off your chargeable income, so it depends on your band: at the 19% band, RM3,000 saves RM570.

Until when is the PRS relief available?

The Private Pension Administrator (PPA) says the relief is available until assessment year 2030. The calculator gives no relief after that, and it does not know whether the relief will be extended again.

Can I take money out of my PRS before 55?

Some of it. Each contribution is split 70% into sub-account A, which cannot be withdrawn before 55, and 30% into sub-account B. From 1 year after you enrol you can withdraw from sub-account B for general purposes, once a calendar year, with an 8% tax penalty on the amount withdrawn. PPA also lists housing, healthcare and permanent departure from Malaysia as reasons for an earlier withdrawal; the calculator does not model them.

Is there a penalty to withdraw at 55?

No. PPA says retirement withdrawals, in part or in full, carry no tax penalty from age 55, even if you are still working.

Is the PRS better than just investing the money myself?

Only by the tax it saves, and only for the years the relief runs; the calculator puts a figure on that gap. Against it, most of the money is locked until 55 and the PRS has fees: PPA lists management fees of 1% to 1.8% a year, plus trustee and admin fees and, on some funds, a sales charge. The calculator opens on those fees and shows the yearly fee above which the tax saved no longer covers them, so you can set it against your provider's.

Is a PRS the same as EPF (KWSP)?

No. The PRS is voluntary and run by private providers; the EPF is the Employees Provident Fund. They have separate tax reliefs: voluntary EPF contributions fall under the life insurance and EPF relief, capped at RM7,000 for year of assessment 2025, which is a different cap from the RM3,000 for the PRS. PPA says you cannot withdraw from your EPF to contribute to a PRS.

PRS calculator for Malaysia, for retiring early

See the income tax a Private Retirement Scheme (PRS) contribution saves, how much of the account is out of reach until 55, and how the PRS compares with saving the same money elsewhere.

Figures in ringgit (RM), from LHDN (Lembaga Hasil Dalam Negeri) and PPA (Pentadbir Skim Persaraan Swasta), the Private Pension Administrator.

Claiming the PRS relief on RM3,000 a year, on RM85,000 of chargeable income, saves you about

RM570 a year

in income tax, at the 19% band, so a year's RM3,000 costs you about RM2,430 after tax. PPA says the relief runs to assessment year 2030, so 5 years of your 15 years of contributions get it: RM2,850 in all.

Paying in until 45, your PRS holds about

RM55,232

That is in today's ringgit, at 4% above inflation less 1.48% a year in PRS fees. Of it, 70% (RM38,662) is in sub-account A, which cannot come out before 55. You would reach 55 10 years after you stop, with about RM70,839 if it is left alone.

Sub-account B (30%): RM16,570; The part you can take before 55 for general purposes.
Penalty on taking it early (8%): RM1,326; Leaves RM15,244.
Cost of a year's contribution: RM2,430; After the tax it saves.

The PRS against saving the same money elsewhere

Same RM3,000 a year and the same return, with 1.48% a year of PRS fees against 0% elsewhere, and the tax you save put to work outside the PRS: you would have RM59,985 by 45, against RM62,474 saving it elsewhere. The PRS is behind by RM2,489: its fees take more than the tax saved. Fees come out of the balance every year, so over many years they can cost more than the tax saved. The elsewhere money stays reachable at any age; the PRS money does not.

The income, contribution, return and ages are an example: replace them with your own. Chargeable income is your income after all the other reliefs you claim, before this one.

Your age nowWhole years. From 18 to 70.Age you stop paying inContributions go in at the start of each year until then. If you stop before 55, only sub-account B can come out, with the penalty. From 18 to 75.Chargeable income a yearAfter your other reliefs, before the PRS relief, in today's ringgit. Held flat. From 0 to 5,000,000.RMPRS contribution a yearPaid in each year until you stop.RMPRS balance nowFrom your provider's statement. Leave at 0 if you have not started.RMFirst year you contributeContributions made in a calendar year are claimed in the year of assessment of the same number. From 2026 to 2100.Return above inflation, %Your assumption, before the PRS's extra cost. It grows both the PRS and the alternative. Not a forecast. From 0 to 10, up to 2 decimal places.PRS fees a year, %Your assumption. It opens on PPA's published fund fees: management fees of 1% to 1.8% (the midpoint), plus the trustee and admin fees. Your provider's fee page has your fund's. From 0 to 5, up to 2 decimal places.Fees on the alternative a year, %Your assumption, for wherever else you would put the money. At 0 it costs nothing, which favours it. From 0 to 5, up to 2 decimal places.

Everything is in today's ringgit, and the tax bands are read as if they rise with prices. Not modelled: tax rebates, your other reliefs (put them into chargeable income), an employer's PRS deduction, sales charges (PPA lists up to 3% on some funds), withdrawals for housing, healthcare or permanent departure, and the relief after assessment year 2030. Your provider's statement is the figure to trust. The link carries your figures after the #, so you can save or share it. Your figures are not sent to us.

The tax relief, and how long it runs

LHDN lists a relief of up to RM3,000 a year for contributions to a deferred annuity or a PRS, under year of assessment (tahun taksiran) 2025. The relief comes off your chargeable income (pendapatan bercukai), so what it saves is the tax on those ringgit at the top of your income. PPA adds that the relief applies to the gross contribution, charges included.

PPA says the relief is available until assessment year 2030. A saver who starts in 2026 gets the relief only for contributions made up to 2030, however long they keep paying in. After that, the PRS is judged on its returns and fees alone, which is why the calculator puts its tax advantage and its break-even cost side by side.

PPA's pages list the tax relief as the incentive for joining. They do not list a government top-up. If one is announced, it will be on ppa.my. The amounts are the ones LHDN lists for 2025, the latest year its pages list, and Budget changes for later years are not in them. This page covers the PRS; the EPF is a separate account with its own reliefs.

What is locked until 55, and why it matters if you stop early

A PRS suits someone who will not need the money soon. 70% of every contribution goes into sub-account A, which holds it until 55. The other 30% goes into sub-account B, which you can draw on one year after enrolling, once a calendar year, but a general-purpose withdrawal costs an 8% tax penalty on the whole amount you take out, not just the growth. A retirement withdrawal from 55 carries no penalty, and PPA says that holds even if you are still working.

For someone planning to stop work at 40 or 45, that is the bridge problem. The PRS is not what pays for the years before 55: only the 30% in sub-account B can be reached, at a cost. The calculator shows how much sits in each sub-account on the day you stop, and what the penalty would take if you emptied sub-account B. PPA also lists withdrawals for housing and for healthcare from sub-account B, and a full withdrawal if you permanently leave Malaysia, without the penalty; the conditions are on PPA's FAQ page and are not modelled here.

Anyone aged 18 or over, Malaysian or not, can open an account. Contributions are voluntary, with no fixed amount.

Questions people ask

How much tax relief do I get for a PRS contribution?: Contributions to a Private Retirement Scheme (Skim Persaraan Swasta) earn a personal tax relief (pelepasan cukai) of up to RM3,000 a year, which LHDN lists for year of assessment 2025. The tax it saves is that amount taken off your chargeable income, so it depends on your band: at the 19% band, RM3,000 saves RM570.
Until when is the PRS relief available?: The Private Pension Administrator (PPA) says the relief is available until assessment year 2030. The calculator gives no relief after that, and it does not know whether the relief will be extended again.
Can I take money out of my PRS before 55?: Some of it. Each contribution is split 70% into sub-account A, which cannot be withdrawn before 55, and 30% into sub-account B. From 1 year after you enrol you can withdraw from sub-account B for general purposes, once a calendar year, with an 8% tax penalty on the amount withdrawn. PPA also lists housing, healthcare and permanent departure from Malaysia as reasons for an earlier withdrawal; the calculator does not model them.
Is there a penalty to withdraw at 55?: No. PPA says retirement withdrawals, in part or in full, carry no tax penalty from age 55, even if you are still working.
Is the PRS better than just investing the money myself?: Only by the tax it saves, and only for the years the relief runs; the calculator puts a figure on that gap. Against it, most of the money is locked until 55 and the PRS has fees: PPA lists management fees of 1% to 1.8% a year, plus trustee and admin fees and, on some funds, a sales charge. The calculator opens on those fees and shows the yearly fee above which the tax saved no longer covers them, so you can set it against your provider's.
Is a PRS the same as EPF (KWSP)?: No. The PRS is voluntary and run by private providers; the EPF is the Employees Provident Fund. They have separate tax reliefs: voluntary EPF contributions fall under the life insurance and EPF relief, capped at RM7,000 for year of assessment 2025, which is a different cap from the RM3,000 for the PRS. PPA says you cannot withdraw from your EPF to contribute to a PRS.

Sources: LHDN's income tax rates and tax reliefs pages; PPA's PRS tax relief, structure of the PRS and PRS FAQs pages. This is general information, not financial or tax advice; your provider and LHDN decide what applies to you.