Add or extract SST at the applicable Malaysian rate.
SST amount
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Net (before tax)
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Gross (with tax)
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Worked example
Take a RM1,000 service bill that is quoted tax-exclusive and falls under the standard 8 percent service tax. The tax is 8 percent of RM1,000, which is RM80, so the customer pays RM1,080 in total. Now run the same figure the other way. If RM1,000 were the tax-inclusive total instead, you would extract the embedded tax by dividing by 1.08, which gives a net of about RM925.93 and a service tax of about RM74.07. The reduced 6 percent rate would apply to food and beverage, telecommunications, parking, or logistics, while goods carry sales tax of 5 or 10 percent depending on category. Malaysia has no GST, so there is no input-tax credit mechanism for end customers.
| Item | Amount (RM) |
|---|---|
| Net amount (before tax) | 1,000.00 |
| Service tax rate | 8% |
| Service tax | 80.00 |
| Gross (with tax) | 1,080.00 |
How it is calculated
Malaysia abolished GST in September 2018 and replaced it with the Sales and Service Tax, or SST. Service tax is charged by registered service providers at a standard 8 percent, with a reduced 6 percent on food and beverage, telecommunications, parking, and logistics. Sales tax applies to goods at 5 or 10 percent depending on the category, with some goods at 0 percent. To add tax on a tax-exclusive amount, multiply by the rate. To extract tax from a tax-inclusive amount, divide the total by one plus the rate to get the net, then take the difference as tax. Unlike GST, SST is a single-stage tax with no broad input-tax credit, so businesses cannot reclaim it the way they could under the old system. The SST scope was expanded on 1 July 2025 to cover more services and goods.