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Malaysia’s Income Classifications: What’s B40, M40 & T20?

Updated 10 Sep 2021 – By Team Loanstreet



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*This article was translated by Farhana Adli from Camne K’jaan Buat Pengelasan Isi Rumah (B40, B50, M40 & T20)?


We’ve always heard of these terms, Bottom 40 (B40), Middle 40 (M40), and Top 20 (T20) - especially when the Kerajaan or our Prime Minister made official regulations regarding financial assistance. Or, you could have heard from the news concerning the poverty cases, and many more. 

Yet, how many of us actually know the real meaning behind B40, M40, and T20? Most importantly, do you know which income classification you belong to? Well, worry not. Let’s scroll down for a more detailed explanation and see it for yourself. 


What is Household Income Classification? 

If you’re not familiar with it, every household in Malaysia will be classified in either of the categories (M40, B40, or T20) per their monthly income. 

Okay, to wit - every year Kerajaan will release a Household Income & Basic Amenities Survey report. With the information received, they’ll monitor, create a plan, and carry on the subsidy and initiative to help out the rakyat. For instance, Bantuan Prihatin Rakyat (BPR), Bantuan Kewangan COVID-19 (BKC), and far more. 

The amount of the financial assistance can also be taken into account, such as the RM1,800 money assistance given towards B40, whereas a maximum of RM1,200 for the M40. See the difference? 


Here’s a simple explanation regarding the household income classification: 

HOUSEHOLD INCOME CLASSIFICATION EXPLANATION MONTHLY HOUSEHOLD GROSS INCOME
B40 Lower-income group. Represents 40% of Malaysians. RM1 - RM4,850
M40 Middle-income group. Represents 40% of Malaysians. RM4,851 - RM10,970
T20

Upper group. Represents the top 20% of Malaysians.

More than RM10,970 and above

Source: Household Income and Basic Survey Amenities Report 2019, DOSM.


Oh! And, in case you’re looking to apply for bantuan from the Kerajaan, check out this website. Just fill out some information and you’ll have a gist of an idea of which financial aid you can apply for. 
 

Will the Household Income Classification change from time to time? 

YES, IT WILL. From 2016 until 2020, Kerajaan has updated the household income classification twice. As we mentioned earlier, the Kerajaan needs to revise the household income classification as a lot of changes can happen over the years. Only then, will they be able to give out the financial aid and subsidy to us. Akin to your laptop lah, it needs a software update every so often, kan? And so does it. 

In 2020, the Kerajaan has made another revision and widened the classifications for the household income by 10 sub-categories. Chief Statistician Malaysia, Datuk Seri Dr Mohd Uzir Mahidin, said that the detailed classification was made to focus on planning and monitoring so that the targeted program can be implemented to lessen the gap of each household’s gross income. Refer to the table below: 
 

HOUSEHOLD INCOME CLASSIFICATION 2016 2019 2020 (Current Classification)
B40 RM1 - RM4,360 RM1 - RM4,850 B10 Less than RM2,500
B20 RM2,500 - RM3,169
B30 RM3,170 - RM3,969
B40 RM3,700 - RM4,849
M40 RM4,361 - RM9,619 RM4,851 - RM10,970 M10 RM4,850 - RM5,879
M20 RM5,880 - RM7,099
M30 RM7,110 - RM8,699
M40 RM8,700 - RM10,969
T20

RM9,619 and above 

RM10,970 and above T10 RM10,970 - RM15,039
T20 More than RM15,039

Source: Household Income and Basic Survey Amenities Report 2019, DOSM.


You must be wondering, what are the metrics used by the Kerajaan to classify the household incomes? 

Unfortunately, the income limitation isn’t the standard used by the Kerajaan to give out financial assistance. After it was systematized progressively, the median of one’s household income is chosen in helping them to set the initiative in motion.

If you guys want to know which classification you actually belong to and the accurate number, do the maths and see the median (take the middle number!). Let’s say, there are a bunch of people in a house - for instance, your siblings, the in-laws, your parents and you. Having said that, we can't simply tally up everyone’s salaries. 

Here’s an example in a small context - there are seven individuals in a household with an income of RM2,500, RM3,800, RM1,800, RM4,500, RM6,700, RM1,200, and RM7,300 approximately. Hence, the median (middle number) household income would be RM3800, if it was arranged in ascending order. Get it, now?
 

HOUSEHOLD INCOME CLASSIFICATION SUB-CATEGORY INCOME THRESHOLD MEDIAN HOUSEHOLD INCOME
B40 B10 Less than RM2,500 RM1,929
B20 RM2,500 - RM3,169 RM2,786
B30 RM3,170 - RM3,969 RM3,556
B40 RM7,000 - RM4,849 RM4,387
M40 M10 RM4,850 - RM5,879 RM5,336
M20 RM5,880 - RM7,099 RM6,471
M30 RM7,110 - RM8,699 RM7,828
M40 RM8,700 - RM10,959 RM9,695
T20 T10 RM10,960 - RM15,039 RM12,586
T20 RM15,039 and above RM19,781

Source: Household Income and Basic Survey Amenities Report 2019, DOSM.


Even so, there’s a limit to the median household income of every state in Malaysia as the living cost differs from one place to another, hence if you’re staying in Selangor or KL, for sure lah the living cost is expensive. As a result, a household with the above average median income would have some spare monnies, while those with insufficient income wouldn't be able to do so - what a bitter truth! *sigh

Also, do refer to the website for more information.
 

 

Source: Household Income and Basic Survey Amenities Report 2019, DOSM.
 

ALSO READ: PEMULIH Stimulus Package: 9 Things You Need to Know
 

“Hold up, what’s with the B50 thingy that our former PM mentioned before?” 

YES - our former PM had made an official statement saying that most of the M40 will bump to B40, hence, the existence of Bottom 50 (B50). *Bruh, what on earth is this 

Okay, FYI, 600,000 M40 households have fallen into B40 group due to the impact of Covid-19 on the economy. This would mean that there’s a possibility for people in the B40 to fall even deeper than what has already been set as a low-income group. Hence, creating a new group called B50. It’s like a snowball effect.
 

You’re not alone, peeps. This koala is clueless as well. 
 

But fret not as, the Kerajaan has yet made an official announcement regarding this B50 thing - so sip your coffee first ya. However, if the B50 group was officialised, here’s what the new household income classification would look like: 

CATEGORY

HOUSEHOLD INCOME CLASSIFICATION 

(BEFORE COVID-19)

HOUSEHOLD INCOME CLASSIFICATION 

(AFTER COVID-19)

1 B40 B50 (increase)
2 M40 M30 (lessen)
3 T20 T20 (maintain)


If it does happen, then unfortunately the classification data can’t be referred to for financial assistance anymore. This is because only the B40 received the financial aid before while missing out on the M40 who needed a leg up-as well.

One thing for sure is that the affordability of one’s household expenditure can’t be solely measured by their incomes. Assuming - if there are two kids in a house, then surely, the monthly expenses aren't as much as a house with six kids. If we plus-minus their commitments, there’ll only be little monies left. Can you draw the distinction now? 

So, we gotta look beyond the household gross income as it doesn’t determine anything and hope that a thorough study of the low-income group (B40 & M40) will be done by the Kerajaan, only then everyone can benefit from the financial assistance.  

ALSO READ: 

*The above article is intended for informational purposes only. Loanstreet accepts no responsibility for loss that may arise from reliance on information contained in the articles.

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