Step-by-step calculation
This walk-through assumes a Myanmar tax resident receiving a normal monthly salary plus a one-off year-end bonus. Default: single, no dependant allowances, no donations. Brackets are from the Union Tax Law 2025-2026 (Section 5). Bonuses are fully assessable salary in the year they are paid — not deferred, not split, not taxed at a special rate. Tax year: 1 April – 31 March.
Step 1 — Apply the 20% basic personal relief
Add the expected bonus to the projected annual salary before applying the 20% basic personal relief. The relief still maxes out at MMK 10,000,000/year regardless of how much of the income comes from bonuses.
| Projected annual base salary | (figure) |
| Plus: expected bonus (year-end / festival / 13th-month) | (figure) |
| = Projected annual gross including bonus | (sum) |
| Less: 20% basic personal relief | − up to MMK 10,000,000 |
| Less: spouse / child / parent allowances | 0 in default case |
| Annual taxable income | = residual |
Step 2 — Apply the Union Tax Law 2025-2026 brackets
| Annual taxable income | Marginal rate |
|---|---|
| 1L – 20L (MMK 0 – 2,000,000) | 0% |
| 20L – 100L (MMK 2,000,000 – 10,000,000) | 5% |
| 100L – 300L (MMK 10,000,000 – 30,000,000) | 10% |
| 300L – 500L (MMK 30,000,000 – 50,000,000) | 15% |
| 500L – 700L (MMK 50,000,000 – 70,000,000) | 20% |
| 700L & above (MMK 70,000,000+) | 25% |
Worked illustration — base salary MMK 12,000,000 + bonus MMK 2,000,000 = MMK 14,000,000 annual gross (taxable = MMK 11,200,000 after 20% relief):
| Band | Amount in band (MMK) | Rate | Tax (MMK) |
|---|---|---|---|
| First 2,000,000 | 2,000,000 | 0% | 0 |
| 2,000,001 – 10,000,000 | 8,000,000 | 5% | 400,000 |
| 10,000,001 – 11,200,000 | 1,200,000 | 10% | 120,000 |
| Annual PIT (with bonus) | MMK 520,000 | ||
Without the bonus, annual PIT would be MMK 380,000. The marginal cost of the MMK 2,000,000 bonus is MMK 140,000 (effectively partly 5% and partly 10%).
Step 3 — Convert to monthly withholding
- Smoothed approach: divide MMK 520,000 by 12 → withhold ~MMK 43,333/month from April; recompute when actual bonus is confirmed.
- One-off approach: withhold base PAYE (MMK 380,000 ÷ 12 ≈ MMK 31,667/month) for ordinary months; in the bonus month, withhold the additional MMK 140,000 on top of the base PAYE.
- Either method must reconcile on the annual employer reconciliation by 30 June.
What about SSB and the true net salary?
The SSB wage base is capped at MMK 300,000/month, so most bonuses are outside the SSB ceiling — the 2% employee deduction is already at MMK 6,000 from base salary. Where base wages are below the cap, a bonus paid in that month can briefly push the wage base higher, lifting that month's SSB to the cap.
| Bonus month gross | MMK 1,000,000 base + MMK 2,000,000 bonus = MMK 3,000,000 |
| Less: PIT (one-off) | − MMK 31,667 base + MMK 140,000 bonus = MMK 171,667 |
| Less: SSB (employee, 2% on MMK 300,000 cap) | − MMK 6,000 |
| Bonus-month take-home | ≈ MMK 2,822,333 |
Employer takeaway
Bonuses are fully assessable salary in the year paid. Recompute the projected annual gross when a bonus is announced and either smooth the additional PAYE across remaining months or withhold the lump-sum tax in the bonus payment month. Remit the additional PIT to IRD by the 15th of the following month, reflect the bonus on the annual reconciliation by 30 June, and retain the bonus calculation for at least 7 years.
Common variations to watch for
- 13th-month salary — same treatment as a year-end bonus. See 13th-month tax.
- Festival bonus (Thingyan / year-end) — fully assessable; document the policy.
- Performance bonus tied to KPIs — assessable in the year paid, even if KPIs measured the prior year.
- Sign-on bonus with claw-back — taxed when paid; if clawed back, the employee may claim a refund through the next return.
- Bonus paid in foreign currency to expat — convert at the Central Bank reference rate on the payment date.
Common PIT mistakes to avoid
- Treating bonus as separate from salary for relief purposes — the 20% relief is a single annual figure, not bonus-specific.
- Smoothing PAYE for an unconfirmed bonus — under-withholding all year if the bonus then doesn't materialise; better to withhold one-off in the bonus month.
- Ignoring the marginal-rate jump — a bonus can push the employee into a higher band; communicate the net amount transparently.
- Missing the 15th remit on bonus-month PAYE — late payment triggers interest. See penalties for late filing.
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