
<p style="font-size:18px"><em><strong><span style="font-size: 14pt;"><em>In Malaysia, when it comes to income distribution and social class categorisation, there are three distinct income tiers – B40, M40, and T20. This article will delve into both household incomes and the median income in the country.</em></span></strong></em></p>



<div class="wp-block-image size-full wp-image-67497"><figure class="alignleft"><img loading="lazy" width="1200" height="630" src="https://angel-prod-public-content.s3.ap-southeast-1.amazonaws.com/wp-content/uploads/sites/2/2021/07/B40-M40-and-T20-income-classification-in-Malaysia.jpg" alt="B40 M40 and T20 income classification in Malaysia" class="wp-image-67497" srcset="https://angel-prod-public-content.s3.ap-southeast-1.amazonaws.com/wp-content/uploads/sites/2/2021/07/B40-M40-and-T20-income-classification-in-Malaysia.jpg 1200w, https://angel-prod-public-content.s3.ap-southeast-1.amazonaws.com/wp-content/uploads/sites/2/2021/07/B40-M40-and-T20-income-classification-in-Malaysia-300x158.jpg 300w, https://angel-prod-public-content.s3.ap-southeast-1.amazonaws.com/wp-content/uploads/sites/2/2021/07/B40-M40-and-T20-income-classification-in-Malaysia-1024x538.jpg 1024w, https://angel-prod-public-content.s3.ap-southeast-1.amazonaws.com/wp-content/uploads/sites/2/2021/07/B40-M40-and-T20-income-classification-in-Malaysia-768x403.jpg 768w, https://angel-prod-public-content.s3.ap-southeast-1.amazonaws.com/wp-content/uploads/sites/2/2021/07/B40-M40-and-T20-income-classification-in-Malaysia-500x263.jpg 500w" sizes="(max-width: 1200px) 100vw, 1200px" /><figcaption>© abdulrazaklatif/ 123RF</figcaption></figure></div>



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<p>As of 2022, there are a total of 8.4 million households in Malaysia, of which 7.9 million are Malaysian citizens. These figures are based on the <a href="https://www.dosm.gov.my/uploads/release-content/file_20230806205831.pdf" target="_blank" rel="noreferrer noopener">2022 Household Income Survey</a> conducted by the <a href="https://www.dosm.gov.my/portal-main/landingv2" target="_blank" rel="noreferrer noopener">Department of Statistics Malaysia (DOSM)</a>.</p>



<p>A household refers to one or a group of related or unrelated individuals who typically live together and share resources for food and other living expenses. In Malaysia, 97.9% of households are family units, while 2.1% are non-family units.</p>



<p>So, we often hear about the terms B40, M40, and T20, but who exactly fits into these income classes? While we are all classified according to our income levels, it is critical to understand where we fall within the B40, M40, and T20 categories.</p>



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<h2><strong>What is household income?</strong></h2>



<p>DOSM defines household income as the total income received by household members, either in cash or in kind, on a regular and accrual basis, whether weekly, monthly, or annually, and can be used to meet current living expenses.</p>



<h2><strong>What is the average household income in Malaysia?</strong></h2>



<p>The average <strong>urban household income</strong> in 2022 is <strong>RM9,428</strong>, a 2.9% rise from RM8,635 in 2019. Meanwhile, the average <strong>rural household income</strong> in 2022 is <strong>RM5,147</strong>, showing a 0.9% growth from RM5,004 in 2019.</p>



<h2><strong>What are B40, M40, and T20?</strong></h2>



<p>B40, M40, and T20 refer to the classification of household income groups in Malaysia. B40 represents the bottom 40% of income earners, M40 represents the middle 40%, and T20 represents the top 20% of Malaysian household incomes. Here are the findings from the 2022 survey:</p>



<figure class="wp-block-table"><table><tbody><tr><td><strong>Income Classification</strong></td><td><strong>Definition</strong></td><td><strong>Details</strong></td></tr><tr><td>B40</td><td>Bottom 40% income</td><td>Low-income individuals.Household income less than RM5,250.Represents 3.16 million households</td></tr><tr><td>M40</td><td>Middle 40% income</td><td>Middle-class income individuals.Household income between RM5,251 and RM11,819. Represents 3.16 million households.</td></tr><tr><td>T20</td><td>Top 20% income</td><td>High-income individuals.Household income of RM11,820 or more.Represents 1.58 million households.</td></tr></tbody></table></figure>



<h2><strong>Household income classification in Malaysia 2023</strong></h2>



<p>B40 is further subdivided by B1, B2, B3, and B4; M40 into M1, M2, M3, and M4; and T20 into T1 and T2. Household income is calculated based on median and mean values.</p>



<figure class="wp-block-image size-full"><img loading="lazy" width="750" height="920" src="https://angel-prod-public-content.s3.ap-southeast-1.amazonaws.com/wp-content/uploads/sites/2/2023/10/Screenshot-2023-09-18-135932.webp" alt="" class="wp-image-91056" srcset="https://angel-prod-public-content.s3.ap-southeast-1.amazonaws.com/wp-content/uploads/sites/2/2023/10/Screenshot-2023-09-18-135932.webp 750w, https://angel-prod-public-content.s3.ap-southeast-1.amazonaws.com/wp-content/uploads/sites/2/2023/10/Screenshot-2023-09-18-135932-245x300.webp 245w" sizes="(max-width: 750px) 100vw, 750px" /><figcaption>Source: Household Income Survey Report 2022</figcaption></figure>



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<p>The median income is the middle value when households are arranged from lowest to highest income, whereas the mean income is determined by adding all household incomes and dividing by the number of households.</p>



<figure class="wp-block-table"><table><tbody><tr><td><strong>Income Group</strong></td><td><strong>&nbsp;</strong></td><td><strong>Median Household Income (RM)</strong></td><td><strong>Mean Household Income (RM)</strong></td><td><strong>Income Threshold (RM)</strong></td></tr><tr><td>B40</td><td>B1</td><td>2,012</td><td>1,941</td><td>Less than 2,560</td></tr><tr><td>B40</td><td>B2</td><td>3,034</td><td>3,018</td><td>2,560 – 3,439</td></tr><tr><td>B40</td><td>B3</td><td>3,875</td><td>3,874</td><td>3,440 – 4,309</td></tr><tr><td>B40</td><td>B4</td><td>4,764</td><td>4,771</td><td>4,310 – 5,249</td></tr><tr><td>M40</td><td>M1</td><td>5,770</td><td>5,782</td><td>5,250 – 6,339</td></tr><tr><td>M40</td><td>M2</td><td>6,979</td><td>6,989</td><td>6,340 – 7,689</td></tr><tr><td>M40</td><td>M3</td><td>8,523</td><td>8,536</td><td>7,690 – 9,449</td></tr><tr><td>M40</td><td>M4</td><td>10,552</td><td>10,577</td><td>9,450 – 11,819</td></tr><tr><td>T20</td><td>T1</td><td>13,475</td><td>13,585</td><td>11,820 – 15,869</td></tr><tr><td>T20</td><td>T2</td><td>20,776</td><td>25,719</td><td>15,870 and above</td></tr></tbody></table></figure>



<h2><strong>B40 and their eligible assistance</strong></h2>



<p>The B40 category represents the bottom 40% of household incomes in Malaysia, consisting of 3.16 million households earning less than RM5,250. Among the assistance or incentives available to the B40 group are:</p>



<ul><li><a href="https://bantuantunai.hasil.gov.my/" target="_blank" rel="noreferrer noopener">Sumbangan Tunai Rahmah (STR)</a> – Cash aid for low-income households (B40).</li><li><a href="https://belanjawan.mof.gov.my/manfaat/faq/skim-madani.html" target="_blank" rel="noreferrer noopener">MADANI Medical Scheme</a> – Created to cover the healthcare needs of the B40 group for Primary Acute Care (Outpatient Treatment of Acute Cases) in 21 districts.</li><li><a href="https://www.kkd.gov.my/en/public/news/18900-subsidi-jaringan-prihatin-rm300-bagi-penerima-layak" target="_blank" rel="noreferrer noopener">Jaringan Prihatin B40</a> – RM300 support for purchasing new devices and RM180 for monthly data subscriptions.</li><li><a href="https://budget.mof.gov.my/manfaat/faq/bkk.html" target="_blank" rel="noreferrer noopener">Bantuan Kanak-Kanak (BKK)</a> – Assists families/caregivers of children or assists children without/gaining caregivers to continue living with their families and ensure their well-being.</li><li><a href="https://belanjawan.mof.gov.my/manfaat/faq/bwe.html" target="_blank" rel="noreferrer noopener">Bantuan Warga Emas</a> – RM500 monthly stipend for the poorest elderly citizens (<em>warga emas miskin tegar</em>).</li><li><a href="https://www.mysalam.com.my/b40/info/" target="_blank" rel="noreferrer noopener">mySalam</a> – A free takaful health protection initiative.</li><li><a href="https://www.rurallink.gov.my/program-perumahan-rakyat-termiskin-pprt/" target="_blank" rel="noreferrer noopener">Program Perumahan Rakyat Termiskin</a> – Targeted at those who want to build new houses or renovate existing ones for occupancy and require assistance.</li></ul>



<figure class="wp-block-image size-full"><img loading="lazy" width="750" height="907" src="https://angel-prod-public-content.s3.ap-southeast-1.amazonaws.com/wp-content/uploads/sites/2/2023/10/Screenshot-2023-09-18-135958.webp" alt="" class="wp-image-91059" srcset="https://angel-prod-public-content.s3.ap-southeast-1.amazonaws.com/wp-content/uploads/sites/2/2023/10/Screenshot-2023-09-18-135958.webp 750w, https://angel-prod-public-content.s3.ap-southeast-1.amazonaws.com/wp-content/uploads/sites/2/2023/10/Screenshot-2023-09-18-135958-248x300.webp 248w" sizes="(max-width: 750px) 100vw, 750px" /><figcaption>Source: Household Income Survey Report 2022</figcaption></figure>



<h2><strong>M40 and their eligible assistance</strong></h2>



<p>The M40 category represents the middle 40% of household incomes in Malaysia, consisting of 3.16 million households with incomes ranging from RM5,251 to RM11,819. Among the assistance or incentives available to the M40 group are:</p>



<ul><li>Income tax rate reduction of up to 2% beginning in 2024 for those with taxable incomes between RM35,000 and RM100,000.</li><li>Stamp duty exemption of up to 100% for first-time home purchase priced at RM500,000 and below.</li><li>Stamp duty exemption of up to 75% for first-time home purchases priced between RM500,001 and RM1 million.</li></ul>



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<h3><strong>B40, M40, and T20 classifications are to be phased out in 2024</strong></h3>



<p>Beginning in 2024, the classification of the population into B40, M40, and T20 categories will be gradually phased out. According to <a href="https://www.businesstoday.com.my/2023/06/14/no-more-b40-m40-t20-classifications-from-2024-said-rafizi/" target="_blank" rel="noreferrer noopener">Minister of Economy Rafizi Ramli</a>, this action is taken to shift subsidies and socio-economic policies towards household disposable income.</p>



<h3><strong>What is the monthly income required to live comfortably in Malaysia?</strong></h3>



<p>A comfortable life is subjective and depends on each individual&#8217;s unique lifestyle. Aside from that, the factors influencing a comfortable life for Malaysians include the location of your residence or workplace.</p>



<p>According to the <a href="https://www.ricebowl.my/career-advice/blog/en/28384/what-is-the-average-cost-of-living-in-malaysia-updated-2023" target="_blank" rel="noreferrer noopener">local job site Ricebowl.my</a>, the cost of living in Malaysia&#8217;s five major states is as follows:</p>



<ul><li>Kuala Lumpur = RM4,500 to RM7,500 per month</li><li>Penang = RM3,500 to RM6,000 per month</li><li>Selangor = RM3,000 to RM5,000 per month</li><li>Johor = RM2,500 to RM4,000 per month</li><li>Sabah = RM2,000 to RM3,500 per month.</li><li></li></ul>



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