The Ministry of Finance (MOF) published Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim’s Budget 2027 speech, which proposes a MYR 2,000 minimum wage. Anwar tabled the budget on October 9, 2026. The new rate would take effect from June 2027, up from MYR 1,700 today.
Got employees in Malaysia? Then you’ve got about seven months to plan.
The headline number is simple. The details aren’t. Some employers are exempt, a second salary floor has no start date, and every statutory contribution moves with the base wage.
It’s still a budget proposal, so keep an eye out for the final legal text. Here’s what changes, who it applies to, what it costs and how to get ready. We use MYR, the ISO currency code, throughout. You’ll see it written locally as RM.
What changes to Malaysia’s minimum wage in June 2027
Under the Budget 2027 proposal tabled on October 9, 2026, the minimum wage rises from MYR 1,700 to MYR 2,000 a month from June 2027. By our calculation, that’s an increase of MYR 300, or about 17.6%. The speech also proposes a higher floor for semi-skilled workers and graduates.
Measure | Rate as of October 2026 | Proposed rate | Start date | Source |
National minimum wage | MYR 1,700 a month | MYR 2,000 a month | June 2027 | MOF Budget 2027 speech |
Minimum wage for semi-skilled workers and graduates | Not stated | MYR 2,500 a month | The speech gives no start date | MOF Budget 2027 speech |
The speech presents the MYR 2,500 floor as a first step for semi-skilled workers and graduates. It gives no start date, so don’t build it into your 2027 pay plans as a fixed cost yet.
Why the push? In the speech, Anwar said labor compensation’s share of GDP remains relatively low at 33.9%.
Who is covered and who is exempt
The new MYR 2,000 rate would benefit more than four million workers, according to the Budget 2027 speech. MSMEs with annual sales below MYR 50 million are exempt. The speech says the exemption gives them room to adjust their business models.
Employer type | Treatment under the Budget 2027 proposal | Still to be confirmed | Source |
Employers with annual sales of MYR 50 million or more | Pay at least MYR 2,000 a month from June 2027 | Final terms in the legal text | MOF Budget 2027 speech |
MSMEs with annual sales below MYR 50 million | Exempt from the new rate | Eligibility test and how long the exemption lasts | MOF Budget 2027 speech |
Treasury Secretary-General Tan Sri Johan Mahmood Merican explained the thinking at a briefing reported by Media Selangor on October 12, 2026. He said the exemption takes into account employers’ capacity, particularly small businesses facing operating cost pressures.
So does the exemption help you? Probably not, if you’re a large global company.
The speech doesn’t say how long the exemption lasts or exactly how the sales test works. Until the details are out, don’t assume a small Malaysian subsidiary qualifies. Ask whether the sales test looks at your local entity or your wider group.
Hire through an Employer of Record (EOR)? Ask your provider how it plans to apply the new rate to your team.
What the increase means for payroll costs and statutory contributions
A worker moving from MYR 1,700 to MYR 2,000 costs you more than MYR 300 a month. That’s because EPF, SOCSO and EIS contributions are calculated on wages, so both your share and your employee’s share rise with the new floor.
The Employees Provident Fund (EPF) runs Malaysia’s retirement savings scheme. The Social Security Organisation (PERKESO) administers SOCSO and Employment Insurance System (EIS) contributions. Check their current contribution rates when you model the change.
Budget for MYR 300 in extra gross pay per worker, plus higher employer contributions on top. The Treasury Secretary-General also said wage increases must be supported by productivity growth.
Then look just above the floor. Someone earning MYR 2,000 today will soon sit level with a new hire on the minimum. Expect pay band questions.
Want the full employer cost for a Malaysian hire? Run the numbers in our employee cost calculator.
How employers should prepare before June 2027
Start now, but don’t lock anything in until you’ve seen the final legal text. The government announced the increase as a proposal in the Budget 2027 speech. We’d advise you to watch official announcements from the Ministry of Human Resources for the updated Minimum Wages Order.
Use the time to get these steps done:
- List every Malaysian employee earning less than MYR 2,000 a month
- Check whether your Malaysian entity might fall under the MSME exemption once the details are published
- Model the new gross pay plus employer EPF, SOCSO and EIS contributions for each affected role
- Review pay bands just above MYR 2,000 to avoid pay compression
- Track the MYR 2,500 floor for semi-skilled workers and graduates, which has no start date yet
- Watch official announcements from the Ministry of Human Resources for the updated Minimum Wages Order
- Update employment contracts and payroll settings before your June 2027 pay run
New to employing in Malaysia? Our Malaysia country guide covers the basics of hiring and paying staff there.
How Multiplier helps you stay compliant in Malaysia
Multiplier keeps your Malaysian payroll in step with the law, so a wage change doesn’t turn into a fire drill. You’ll get the new rate and every recalculated contribution in one place, alongside the other countries you pay.
With Global Payroll, you run payroll for your own entities across 160+ countries from one system. It calculates taxes and statutory payments like EPF, SOCSO and EIS automatically. Real-time payroll previews show you the cost impact before you approve a pay run, and local payroll experts track changes like this one.
Don’t have an entity in Malaysia? Our Employer of Record service lets you hire there without setting one up. We act as the legal employer and handle payroll, tax withholdings, social security and localized benefits.
Either way, you’ll have one team accountable for getting your people paid correctly when June 2027 arrives.
FAQs
When does Malaysia's new minimum wage take effect?
The new MYR 2,000 minimum wage is set to take effect from June 2027. Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim announced it in the Budget 2027 speech on October 9, 2026. It's still a proposal, so check the final legal text to confirm the exact date and terms.
Does the new minimum wage apply to my company?
It applies to you if your business has annual sales of MYR 50 million or more. MSMEs below that threshold are exempt under the Budget 2027 proposal. The speech doesn't say how long the exemption lasts, so confirm your status once the government publishes the details
How much more will a minimum wage employee cost employers under Malaysia's Budget 2027 proposal?
Under Malaysia’s Budget 2027 proposal, employers would pay MYR 300 more per month in base salary for employees earning MYR 1,700. Higher wages would also increase statutory contributions, including EPF, SOCSO, and EIS, raising overall employment costs.
Is the MYR 2,500 salary floor for graduates mandatory yet?
No, the MYR 2,500 minimum for semi-skilled workers and graduates doesn't have a start date yet. The Budget 2027 speech presents it as a first step and gives no timeline. Keep it on your radar when you plan graduate hiring and pay bands for 2027.
Is the MYR 2,000 minimum wage already law?
Not yet. The government announced the increase as a proposal in the Budget 2027 speech on October 9, 2026. We'd advise you to watch official announcements from the Ministry of Human Resources for the updated Minimum Wages Order. Plan for June 2027, but check the final terms before you change payroll.
How does Multiplier help employers manage wage compliance and payroll updates in Malaysia?
Multiplier simplifies global hiring across 160+ countries. Through Multiplier's Employer of Record (EOR) service, companies can hire in Malaysia without a local entity, while Multiplier's Global Payroll platform automatically calculates local EPF, SOCSO, and EIS contributions to keep pay runs compliant.
