Hire in Malaysia
Currency
Malaysian Ringgit (MYR)
Capital
Kuala Lumpur
Contract Language
English / Malay
Payroll Cycle
Monthly
Our quickstart guide to hiring in Malaysia
Learn everything you need to know about hiring an employee in Malaysia
Wage & Tax Obligation
Minimum Wage Requirements
As of 2023, Malaysia has set a minimum wage of 1,500 MYR per month (approximately $335) for most sectors. The minimum wage can vary by region and is subject to periodic review, so it’s important to check for updates regularly.
Malaysia operates a progressive income tax system for individuals, with rates ranging from 0% to 30% based on annual income. The tax brackets are as follows:
Up to 5,000 MYR: 0%
5,001 to 20,000 MYR: 1%
20,001 to 35,000 MYR: 3%
35,001 to 50,000 MYR: 8%
50,001 to 70,000 MYR: 14%
70,001 to 100,000 MYR: 21%
Above 100,000 MYR: 24% to 30%
Employers are responsible for withholding income tax from employees' salaries and remitting it to the tax authorities.
Individual Income Tax
Payroll Cost
Payroll costs in Malaysia include the employee's gross salary plus statutory contributions. Employers typically pay:
Employee Provident Fund (EPF): 13% of gross salary for employees earning up to 5,000 MYR per month, and 12% for those earning above that.
Social Security Organization (SOCSO): Contributions depend on the employee's salary, typically ranging from 0.5% to 1.75%.
Overtime Pay & Maximum Hours
The standard working hours in Malaysia are 48 hours per week. Overtime is compensated as follows:
Overtime pay for work on regular days:
1.5 times the hourly rate for the first two hours.
2 times the hourly rate for hours beyond that.
On rest days and public holidays, the rate is typically 2 times the hourly rate.
Employers must adhere to the limits on working hours and ensure proper compensation for overtime.
Leave Policy
Maternity Leave
Pregnant employees who have worked no less than 90 calendar days in the last four months are entitled to 98 calendar days of paid leave. Leave can be taken any time up to 30 days before giving birth. The remaining days can be divided into two periods of time. The employee will receive 100% of the salary during this period, and the employer will be responsible for this pay.
Paternity Leave
There is no paternity leave currently required by law.
Parental Leave
In Malaysia, no law covers parental leave. However, employees may be entitled to maternity leave.
Sick Leave
Employees are entitled to paid sick leave of up to 14 to 22 days per year, depending on tenure.
Termination
Termination Requirements
Termination must follow legal procedures:
Valid reasons for dismissal include misconduct, redundancy, or poor performance.
Employers are required to provide a written notice of termination.
Notice Period
The notice period varies based on the length of employment:
Less than 2 years: 2 weeks’ notice
2 to 5 years: 4 weeks’ notice
More than 5 years: 8 weeks’ notice
Severance for Employees
In Malaysia, severance pay is typically not mandated by law except in cases of redundancy. However, it may be specified in employment contracts. If applicable, severance pay generally depends on the employee's length of service.
Statutory Time Off
Paid Time Off
Employees are entitled to at least 8 to 16 days of annual leave, depending on their length of service.
Public Holidays
Employees are entitled to statutory time off for 11 gazetted public holidays per year.
New Year's Day
Chinese New Year
Thaipusam
Labour Day
Wesak Day
Agong's Birthday
Hari Raya Puasa
Merdeka Day (Independence Day)
Malaysia Day
Deepavali
Hari Raya Haji
National Christmas Day
Some states in Malaysia may observe additional holidays or different dates for certain holidays, particularly for festivals and religious occasions. It's advisable to check specific state calendars for any variations.
Certain holidays, like Chinese New Year and Hari Raya, are celebrated for two days, but only the first day is a public holiday in some states.
Disclaimer
The information contained in this Country Guide is provided for informational purposes only and should not be construed as legal advice on any subject matter. The contents of this Country Guide contain general information and may not reflect current legal developments or address your situation. You should not act or refrain from acting on the basis of any content included in this Country Guide without seeking the advice or representation of a licensed attorney. Anemone HR disclaims all liability for actions you take or fail to take based on any content included in this Country Guide.
Information provided in this Country Guide is provided “as is” without warranty of any kind, either express or implied, including without limitation warranties of merchantability, fitness for a particular purpose, or non-infringement. Anemone HR periodically adds, changes, improves, updates, or removes information without notice, and assumes no liability or responsibility for any errors or omissions in the contents of this Country Guide. This Country Guide may contain links to other websites. Anemone HR disclaims all liability for the privacy practices or the content of such websites.