Invoice total with 8% or 6% service tax.
Invoice total
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Subtotal
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Service tax
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Why service tax behaves differently from the old GST
If you ran a business in Malaysia before September 2018, you remember GST: a value added tax where you charged 6 percent on sales, claimed back the GST you paid on purchases, and remitted only the difference. Service tax is not that. There is no input tax credit. When you charge service tax on an invoice, that money goes to the Royal Malaysian Customs Department in full, and you cannot offset it against the service tax embedded in your own suppliers' bills. This is the single most important thing to grasp before you start adding it to invoices, because it changes how tax accumulates along a chain of businesses. Each registered provider charges again, and nothing nets off.
This calculator does one focused job: it takes a subtotal, applies the service tax rate you select, and shows you the gross figure your client actually owes. It is built for the person preparing the invoice, not for filing the SST-02 return, so treat the output as the line you write on the document rather than your full liability for the taxable period.
Who has to charge it, and at what rate
You only add service tax once your business is registered, and registration becomes mandatory when your taxable turnover crosses RM500,000 over any rolling 12 month window. That is the threshold this tool references. Some service categories carry a higher registration floor, so a small cafe and a management consultancy do not face identical rules. If you are below the threshold and not voluntarily registered, you should not be charging service tax at all, and adding it to an invoice would be incorrect.
The rate split is the part people get wrong most often. The standard service tax rate the calculator applies is 8 percent. A reduced 6 percent rate covers specific categories: food and beverage, telecommunications, parking, and logistics. So a restaurant bill and a digital marketing retainer can sit at different rates even on the same day. The SST scope was widened in mid 2025 to pull in more services, which is exactly why you should confirm both your registration status and your correct rate band with the Royal Malaysian Customs Department rather than assuming last year's treatment still holds. LHDN handles income tax; Customs administers SST, and the two are separate offices.
A RM10,000 consulting invoice, line by line
Say you are a registered consultancy billing a client RM10,000 for a project. Your service falls under the standard band, so the tool applies 8 percent. The service tax is RM800, and the invoice total your client pays is RM10,800. If instead you ran a logistics service on the reduced band, the same RM10,000 subtotal would carry only RM600 of tax, for a RM10,600 total. The table shows both so the gap is obvious.
| Step | Standard 8% | Reduced 6% |
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The chart above puts the two components side by side so you can see how the selected tax rate flows through to the invoice total.
A practical billing tip and a common slip
State your subtotal and the service tax as two separate lines, never a single tax inclusive figure. A client who sees only RM10,800 cannot reconcile it, and a Customs officer reviewing your records expects the tax to be visible and traceable. Quote net of tax in your proposals too, with a clear note that 8 percent service tax applies, so nobody is surprised at invoicing time.
The slip I see most: charging service tax before you are actually registered, in the belief it makes the business look established. Collecting tax you are not registered to collect creates a liability without authority to hold it. Wait until your registration is confirmed. And if your work straddles bands, for example a venue that both rents parking and caters events, bill the parking at the reduced rate and the catering at standard rather than blending them.
Do I charge service tax to an overseas client?
Exported services are often treated differently from services consumed in Malaysia, and some qualify for exemption. The rules turn on where the service is consumed and the category involved, so do not assume a foreign invoice is automatically zero rated. Check the current treatment with Customs for your specific service before you leave the tax off.
Can I deduct the service tax I paid to my own vendors?
No. Unlike the abolished GST, service tax has no credit mechanism, so the 8 percent your software vendor or your logistics partner charged you is a cost to your business, not something you reclaim. Build it into your pricing rather than expecting to recover it.