Image source from Berita Harian
Every year, Budget headlines come with big numbers. This year it’s RM510 billion, RM459.8 billion and RM16 billion. But the figures that matter most to you are usually smaller ones: how much tax you’ll pay, what aid you can get, and what changes for your salary, savings and home plans.
Budget 2027 was tabled in the Dewan Rakyat on 9 October 2026. Here’s what was announced, what it could mean for you, and when the changes are expected to take effect.
Quick summary: Federal spending is RM459.8 billion. The wider total, including investment from GLICs, public-private partnerships and statutory bodies, is RM510 billion. For individuals, the main changes are:
- individual tax relief rising from RM9,000 to RM12,000, from YA 2027
- lower tax rates for two middle-income bands
- a minimum wage of RM2,000 from June 2027
- SARA aid of up to RM1,800 a year for STR recipients
How Much Is Budget 2027?
| Item | Budget 2027 |
| Federal operating expenditure | RM376.8 billion |
| Federal development expenditure | RM83 billion |
| Total federal expenditure | RM459.8 billion |
| Total including GLIC, public-private and statutory body investment | RM510 billion |
| Projected federal revenue | RM380.8 billion |
| Fiscal deficit target | 3.3% of GDP |
| Federal debt | 63.7% of GDP (projected) |
| GDP growth forecast | 4.2% to 5.2% |
Sources: Bernama, The Star and Bernama (GDP forecast).
Why You’ll See Both RM510 Billion and RM459.8 Billion
You may have seen both figures in the news. They measure different things.
RM459.8 billion is the federal budget. It covers the government’s operating and development spending.
RM510 billion is the wider total. According to Bernama, it adds three types of investment to the federal budget:
- RM25 billion from government-linked investment companies (GLICs)
- RM11 billion in public-private investment
- RM14.2 billion from federal statutory bodies and MOF Inc companies
Budget 2026 was reported the same way. Its federal spending was RM419.2 billion, and its wider total was RM470 billion.
The Government’s Fiscal Position
Federal revenue for 2026 is now estimated at RM363.6 billion, above the original estimate of RM343.1 billion. For 2027, revenue is projected at RM380.8 billion.
The government is targeting a fiscal deficit of 3.3% of GDP in 2027 and 3% by 2028. Federal debt is projected to fall from 64% of GDP in 2026 to 63.7% in 2027, as reported by BusinessToday.
What Changes for Your Income Tax?
For many taxpayers, this is the part of Budget 2027 with the most direct effect. The changes apply from the year of assessment (YA) 2027, according to a summary of the Budget 2027 tax measures. That means you’ll see them when you file in 2028, for income earned in 2027.
When you file in 2027 for this year’s income, the current RM9,000 relief and existing rates still apply.
Individual Tax Relief Rises to RM12,000
The individual tax relief rises from RM9,000 to RM12,000. It’s the first change to this relief since 2010, Bernama reports. Every resident taxpayer gets it automatically. In simple terms, RM3,000 more of your income won’t be taxed.
Lower Rates for Two Income Bands
| Chargeable income | Current rate | Budget 2027 rate |
| RM70,001 to RM100,000 | 19% | 18% |
| RM100,001 to RM150,000 | 25% | 24% |
| RM1,000,001 to RM2,000,000 | 28% | 30% |
Sources: Bernama and The Edge Malaysia.
How Much Could You Save?
The government estimates that the higher relief and lower rates will give up to RM1,600 in extra disposable income to about five million taxpayers.
Tax experts quoted by The Edge Malaysia gave these examples:
| Chargeable income | Estimated tax saving a year |
| RM100,000 | About RM840 |
| RM150,000 | About RM1,520 |
These are illustrations. Your actual saving depends on your income and the other reliefs you claim.
More Expenses You Can Claim
Several relief categories are widening:
- Medical relief now covers postnatal care services, up to RM3,000 within the existing RM10,000 limit.
- Care for parents and grandparents covers all care-related expenses, not only medical costs.
- Education and skills training relief covers all fields of study, as well as children’s tuition fees.
- Lifestyle relief adds AI subscriptions, vaccination costs and pet adoption from registered centres.
- Sports relief covers sports shoes, up to RM300 within the RM1,000 limit.
- Domestic tourism relief of up to RM1,000 is extended to YA 2027.
Sources: Bernama and Budget 2027 tax measures summary.
LHDN will confirm the final conditions for each relief. For the reliefs you can claim this year, see our tax relief guide.
What Changes for Your Salary?
The minimum wage rises from RM1,700 to RM2,000 a month from June 2027, according to Bernama’s Budget 2027 highlights. That’s an increase of RM300, or about 17.6%.
How Much SARA and STR Will You Get?
The allocation for Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) rises to RM16 billion, from RM15 billion this year.
| Group | Aid under Budget 2027 |
| STR recipients | SARA of up to RM150 a month, or up to RM1,800 a year. About 9 million recipients |
| Malaysians aged 18 and above who don’t receive STR | SARA MADANI of RM100, paid twice, for RM200 in total. Up to 13 million recipients, including M40 |
The two RM100 SARA MADANI payments are scheduled before Hari Raya Aidilfitri and before Hari Kebangsaan. For tips on using SARA credit, see our practical guide to SARA aid.
What’s in It for Civil Servants and Retirees?
- Special Financial Aid: RM1,500 for 1.3 million civil servants on Gred Utama B and below, including contract staff. More than one million government pensioners, including veterans, receive RM750. Both are paid in two instalments, before Aidilfitri and around the 70th National Day (Bernama).
- Minimum pension: rises from RM1,000 to RM1,350 a month, benefiting nearly 59,000 retirees, veterans and derivative pension recipients (The Star).
- Maternity leave: female civil servants can take up to 490 days over their service, up from 360 days (The Vibes).
What Changes for First-Time Homebuyers?
Budget 2027 proposes stamp duty exemptions on the transfer and loan agreement for first-time homebuyers:
| First home price | Proposed stamp duty exemption |
| Up to RM500,000 | Full exemption |
| RM500,001 to RM750,000 | Full exemption on the first RM500,000, and 50% on the balance |
The proposal covers sale and purchase agreements signed from 1 January 2027 to 31 December 2030, The Star reports.
The Housing Credit Guarantee Scheme (SJKP) also receives an additional RM20 billion, which is expected to help about 80,000 more first-time homebuyers, according to Bernama.
If you’re deciding whether to buy, our rent vs buy cost comparison and first home guide walk through the upfront costs.
What Changes for EPF and Healthcare?
- Automatic EPF registration at 18. Every Malaysian citizen will be registered as an EPF member on turning 18, per The Vibes. The announcement did not say registration includes automatic contributions, NST notes.
- MediAsas from January 2027. EPF members below 55 can pay MediAsas premiums from their Akaun Sejahtera.
Other Changes Worth Knowing
- Bankruptcy threshold: the minimum debt for bankruptcy proceedings rises from RM100,000 to RM150,000 from 2027 (NST).
Allocations by Ministry
| Ministry or region | Allocation |
| Education | RM69 billion |
| Health | RM47.7 billion |
| Home Affairs | RM22 billion |
| Defence | RM22 billion |
| Higher Education | RM19.1 billion |
| Sabah | RM18.7 billion |
| Sarawak | RM16.2 billion |
Source: The Sun.
When Do These Changes Take Effect?
Budget measures are proposals until Parliament passes the related laws. The timings announced so far include:
| Measure | Expected timing |
| Individual relief, tax rates and expanded reliefs | From YA 2027 (filed in 2028) |
| Stamp duty exemptions for first homes | Agreements signed 1 January 2027 to 31 December 2030 |
| MediAsas | January 2027 |
| Minimum wage of RM2,000 | June 2027 |
| SARA MADANI payments | Before Hari Raya Aidilfitri and Hari Kebangsaan |
LHDN, KWSP and the relevant ministries will confirm final details once the laws are passed.
FAQ
How much is Malaysia’s Budget 2027?
Federal spending is RM459.8 billion: RM376.8 billion operating and RM83 billion development expenditure. Including GLIC, public-private and statutory body investment, the total is RM510 billion.
When was Budget 2027 tabled?
On 9 October 2026, by Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim.
What is the new individual tax relief under Budget 2027?
It rises from RM9,000 to RM12,000 from YA 2027. That’s the first change since 2010.
When will I see the new tax relief and rates?
When you file in 2028, for income earned in 2027. When you file in 2027 for 2026 income, the current RM9,000 relief and existing rates apply.
What are the new income tax rates?
18% for chargeable income of RM70,001 to RM100,000, and 24% for RM100,001 to RM150,000. The RM1,000,001 to RM2,000,000 band rises from 28% to 30%.
When does the RM2,000 minimum wage start?
June 2027.
How much SARA will I get in 2027?
STR recipients get up to RM150 a month, or up to RM1,800 a year. Malaysians aged 18 and above who don’t receive STR get RM200 in SARA MADANI, paid in two RM100 instalments.
Is there a stamp duty exemption for first-time homebuyers?
Yes, as a proposal. There’s a full exemption for first homes up to RM500,000. For homes from RM500,001 to RM750,000, the first RM500,000 is fully exempt and the balance gets a 50% exemption. It covers agreements signed from 1 January 2027 to 31 December 2030.
Conclusion: What Budget 2027 Means for You
Budget 2027’s headline figures are large, but its most direct changes for individuals are in tax, wages and aid. If you pay income tax, the higher relief and lower rates are expected from YA 2027. If you’re planning to buy your first home, the proposed stamp duty exemptions run until 2030. And if you receive STR, your SARA credit could rise next year.
Most of these measures still need to be passed into law, so check official sources before making financial decisions based on them.
Disclaimer:
This article is intended for general educational purposes only and does not constitute investment, financial, tax, or legal advice. The information provided is not a recommendation to buy, sell, or hold any product or service. Readers are encouraged to conduct their own research and, where appropriate, seek independent professional advice before making any financial decision.
References to products on Versa app: Investors are encouraged to review the respective fund’s prospectus and product highlights sheet before investing. There are fees when investing in the product. Investors should be aware of other fees, including management fees and other charges that may apply. For further details on all fees and expenses, refer to the respective fund’s prospectus. Past performance is not indicative of future performance.
The Securities Commission Malaysia has not reviewed this marketing/promotional material and takes no responsibility for the contents of this marketing/promotional material and expressly disclaims all liability, however arising from this marketing/promotional material.