What Is CP500? A Plain-English Guide for Malaysian Freelancers

CP500 in one sentence

CP500 is the instalment scheme Lembaga Hasil Dalam Negeri Malaysia (LHDN) uses to collect income tax from people who earn business, rental, or other non-employment income during the year — rather than waiting for one lump sum when you file your annual return. If you are a freelancer, consultant, or sole proprietor in Malaysia, CP500 is effectively how you "pay as you earn" without an employer to withhold tax for you.

Who actually gets a CP500 notice

CP500 applies to individuals who declared business income (Section 4(a) of the Income Tax Act 1967) on a previous Form B — this covers most Malaysian freelancers, consultants, sole proprietors, and partners in a conventional partnership. LHDN typically issues the notice in February or March, based on the chargeable income reported in your most recent assessed Form B.

First-year freelancers usually do not receive a CP500 notice straight away, because LHDN has no prior-year Form B to base an estimate on. That does not mean no tax is owed — the full amount is still due when you file your first Form B, so it is worth setting aside a percentage of every invoice from day one, even before any CP500 notice arrives.

How LHDN calculates your instalment amount

LHDN starts from the chargeable income on your last assessed Form B, applies the current year's progressive tax bands, and divides the resulting figure into six roughly equal instalments. These are due bi-monthly — commonly described as "every two months" rather than quarterly — typically in January, March, May, July, September, and November.

What happens if you miss a payment

Missing or underpaying a CP500 instalment without an approved revision normally triggers an automatic late-payment penalty (commonly 10%) on the outstanding instalment amount. This is separate from, and can stack with, any penalty that applies later if your final Form B tax is also paid late. If your income has genuinely changed during the year, Form CP502 lets you ask LHDN to revise the instalment estimate up or down — see our dedicated guide on how CP502 works for the full process.

CP500 vs your final Form B bill

CP500 instalments are only an estimate, based on last year's figures — they are not your actual tax bill for the current year. Your real liability is worked out when you file Form B (due 30 June, or mid-July for e-Filing), reconciling your actual net profit and reliefs against what you paid through CP500. If your instalments added up to more than the final assessed tax, LHDN refunds the difference; if they fell short, you settle the balance (baki cukai) by the filing deadline.

Check your own CP500 notice directly with LHDN

For your actual CP500 notice, due dates, and any correspondence specific to your tax file, log in to LHDN's official MyTax portal at mytax.hasil.gov.my, or visit the main LHDN website at hasil.gov.my. Neither this page nor the rest of this site can access or display your personal LHDN records.