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B40, M40 & T20: What do they even mean???

B40, M40 & T20: What do they even mean???

We keep hearing “T20”, “M40” and “B40” bandied about by government officials in news articles but do we really know what it means?

Well, sit tight because we’re going to explain what it’s all about.

Measuring your wealth

First things first, “T20”, “M40” and “B40” are all terms used to classify household income in Malaysia. It’s a more specific definition of “upper-class”, “middle-class” and “lower-class” that divides Malaysian household incomes into percentages.

Malaysia’s income classification.
(Credit: TRP)

This income covers both cash as well as revenue through investments, so you can get income through work, self-employment or inheritance.

Do bear in mind that household income is not the same as individual income.

Household income is the total income received by members of a household which can either be one single person or a group of people (related and unrelated) who live together and make common provisions for food and other living expenses.

Main sources of Malaysian household income in 2016. Orange denotes 2014 numbers.
(Credit: Statistics Department Malaysia)

According to the 2016 Report of Household Income And Basic Amenities Survey, the average Malaysian household roughly consists of 4 people. So you have to add everyone’s incomes together to determine which group you belong to. This includes the combined income for married couples, parents with young kids and even adults who still live with their parents.

Which category you belong to

The income range for the classification isn’t actually set in stone, it’s more of a guideline. The number shifts based on GDP of the country every year. Analysts often suggest looking at the mean (average) or median (middle value of the group) to give you a better idea of where you stand in the income classification.

However, we did manage to sift through reports by the Statistics Department and Khazanah Research Institute to come up with the following guide:

Income threshold for T20, M40 & B40.
(Credit: TRP)

To be considered living in poverty, the household income is RM980 and below for Peninsular Malaysia, RM1,020 for Sarawak and RM1,180 for Sabah.

The real picture

Like we mentioned earlier, the income range is just an approximation of wealth for the B40, M40 & T20 households and serve as a guide for welfare aid.

Welfare aid given to B40.
(Credit: Bernama via Malay Mail)

For instance, the Finance Ministry specifically mentioned in Budget 2020 that RM4,360 is the maximum threshold income for B40, but the Bantuan Sara Hidup (BSH) caps the number at RM4,000.

The Health Ministry considers M40 as those who earn RM100,000 per year (roughly RM8,300 per month) for the mySalam protection plan.

See Also

If you look at the Statistics Department’s 2018 Salaries & Wages Survey Report, the median monthly salary is RM 2,308 which is below the middle mark of the B40 group.

This figure is also below the Bank Negara Malaysia’s 2016 estimated acceptable living wage of RM2,700 for a single individual in Kuala Lumpur.

Estimated living wage for people living in Kuala Lumpur.
(Credit: Bank Negara Malaysia)

A Khazanah Research Institute 2018 report also revealed that lower income households spent around 90% of their income on household expenses, but the higher income households only spent 45% of their income for the same essential items. Meanwhile, the “middle-class” (households earning below RM5,000) is seen cutting back on food consumption due to high food inflation.

To further put the household income numbers into context, T20 possess 46.2% of the national income share, M40 have 37.4% of the national income share while the B40 get 16.4% of the national income share.

So if you’ve ever wondered if you’re poor or doing just okay, you now have a better idea.


Do you know if you’re considered B40, M40 or T20? Let us know on TRP’s Facebook, Twitter, and Instagram!

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