What is B40, M40, T20: Understanding Household Income Classification in Malaysia
Quick Summary:
Understanding B40, M40, and T20 helps you identify your household’s financial standing and eligibility for government aid.
B40 households earn below RM5,249, M40 between RM5,250 and RM11,819, while T20 exceed RM11,820.
Each group qualifies for different forms of assistance, such as STR, SARA, tax reliefs, and housing programmes.
Knowing your category can help you plan finances, manage rising living costs, and track upcoming tax changes.
Use this knowledge to improve your financial stability and prepare for better job and income opportunities.
What is B40, M40, T20? Do you know which of these income classifications your household belongs to? This is an important financial matter to know, especially if your family was severely affected by the pandemic.
Also, the cost of living in big Malaysian cities is high, making financial insecurity a major struggle for some individuals and families. Knowing what income classification your household belongs to will allow you to determine if you can benefit from any financial assistance from the government.
In addition, Malaysia’s income tax brackets have been updated in recent budgets. This means you may see some changes in your purchasing power in 2025.
In this guide, we take a look at what B40, M40, and T20 income classifications are, as well as related concepts that can help you better understand income tax brackets.
For additional information in Malay, you can read Apa Itu B40, M40, T20: Tangga Gaji & Peluang Pekerjaan.
Understanding household income-related terms
Before we jump into the different household income classifications, it’s important to know some key terms connected to household income in Malaysia. You will find them mentioned a lot in many documents and guides, answering what B40, M40, and T20 are, and they are crucial to understanding how they affect your family or household.
The Department of Statistics (DOSM) uses the terms below in the Household Income Survey (HIS) and related publications. This survey is done at least twice every five years in order to monitor indicators of economic growth. In 2020, however, the department also merged the survey with its findings on the impact of COVID-19 on the Malaysian household income during the same year.
Indicators related to household income included average salary and wages, economic performance by sector, employment structure, household demographics, and the value of assistance provided by the Malaysian government in 2020.
A household refers to a group of related or unrelated individuals who live together and share expenses for food, shelter, and other living necessities. In 2024, Malaysian households comprised 3.7 persons on average.
Income recipient refers to the members of the household, at least one, who received income at the time of the survey. In 2024, there were about 1.8 income recipients in Malaysia on average.
Household income, also often referred to as the gross income, refers to the total income earned by the members of a household. This can be in cash or in kind. The average monthly household income in Malaysia in 2024 was RM 9,155.
Median household income is the middle value that falls within a range of household incomes, from low to high. This represents a more accurate description of household income in an area, compared to the mean or average value. Mean household income refers to the average value determined by dividing the total household incomes by the total number of households in an area.
What is B40, M40, T20?
In Malaysia, households are categorised into three main income classifications: Bottom 40% (B40), Middle 40% (M40), and Top 20% (T20). Again, this is based on the 2019 HIS/BA survey.
What is B40 in Malaysia?
B40 represents the bottom-tier households that have an income of below RM 5,249. They are further classified into four sub-groups based on the following income range:
Household Group | Median Income (RM) | Income Range (RM) |
B1 | 2.012 | Less than 2,560 |
B2 | 3,034 | 2,560 – 3,439 |
| B3 | 3,875 | 3,440 – 4,309 |
| B4 | 4,764 | 4,310 – 5,249 |
What is M40 in Malaysia?
M40 represents the middle-tier households whose income falls between RM5,250 and RM11,819. They are further classified into four sub-groups based on the following income range:
Household Group | Median Income (RM) | Income Range (RM) |
M1 | 5,770 | 5,250 – 6,339 |
| M2 | 6,979 | 6,340 – 7,689 |
| M3 | 8,523 | 7,690 – 9,449 |
| M4 | 10,552 | 9,450 – 11,819 |
What is T20 in Malaysia?
T20 represents the top-tier households whose income is higher than RM 11,820. They are further classified into two sub-groups based on the following income range:
Household Group | Median Income (RM) | Income Range (RM) |
T1 | 13,475 | 11,820 – 15,869 |
| T2 | 20,776 | 15,870 and above |
Why is it important to understand household income classification in Malaysia?
All the information should come in handy in various situations that apply to managing your finances. Maybe you’re a fresh graduate looking to get smarter with your financial planning and savings. Or, you could be a seasoned employee looking to understand better how inflation and possible unemployment will impact you and your family’s lives.
Likewise, B40 and M40 household income groups qualify for government aids, facilities, and schemes designed to ease living costs. There are different government assistance programmes that each group is eligible to apply for. Current anchors include Sumbangan Tunai Rahmah (STR) cash aid and Sumbangan Asas Rahmah (SARA) monthly credits for eligible STR recipients.
The B40 group, for example, can receive STR. Many STR-verified households also receive SARA (cashless credits via MyKad to buy essentials). Lower-income families can also apply for public housing through Program Perumahan Rakyat (PPR) and Program Perumahan Rakyat Termiskin (PPRT).
Lastly, STR recipients and their spouses aged 40+ are automatically eligible for PeKa B40 health screenings and related medical support (no separate registration).
Meanwhile, those in the M40 group may qualify for targeted tax reliefs and other supports (e.g., education, medical, childcare) depending on annual rules and eligibility published by LHDN.
Finally, in 2025, Malaysia maintains a progressive personal income tax system with rates from 0% to 30%. A new 2% tax on annual dividend income exceeding RM100,000 applies from the Year of Assessment 2025 and mainly affects higher-income investors.
Summary
Learning about the Bottom 40% (B40), Middle 40% (M40), and Top 20% (T20) income groups will help you understand your household’s current financial standing. It will also let you know if you qualify for any financial aid that the government provides for certain household income classifications. Certain personal income brackets under the M40 and T20 household groups will also see some income tax rate changes this year, which may affect your disposable income.
Now that you understand these household income groups, you can use this knowledge to boost your financial capabilities, starting with pivoting into a more rewarding career. #SEEKBetter jobs that pay better in the country today, starting with creating or updating your Jobstreet profile!
Lastly, check out the Career Resources page for more tips on job searching, self-improvement, and career advancement!
FAQs
1. How do I know if my household is B40, M40, or T20?
Add up the total monthly income of everyone living under one roof who shares expenses (salary, business income, pensions, rental, etc.). Compare the amount with the latest income ranges listed in this article. Use household income, not individual salary.
2. How often does DOSM update the B40/M40/T20 ranges, and where do I see the latest?
DOSM refreshes the B40/M40/T20 thresholds after each Household Income (HIS/HIES) survey, which is conducted at least twice in any five-year period. You can find the latest figures on DOSM’s official Household Income reports and the OpenDOSM dashboards.
3. How do I update my details if my income has changed recently?
Update your income with the Inland Revenue Board (LHDN) through e-Filing or your e-Profile and keep 3–6 months of proof (such as payslips or bank statements). For government cash aid such as STR/SARA, submit an income update or appeal through the MySTR portal when the update period opens.
For public housing schemes like PPR/PPRT or other assistance programmes, contact the relevant housing or state agency to update your records. Always keep copies of all documents in case the agencies request verification.
