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Expand your global workforce in Malaysia

Your guide to the employment landscape, working customs and local labor laws in

Capital

Kuala Lumpur

Currency

Malaysian Ringgit (MYR)

Languages

Malay (Official), English, Chinese

GDP per Capita

$1.688 trillion

Employer Tax

15% - 24%

Payroll Frequency

Monthly

Talent overview

Malaysia’s ongoing economic growth is all due to its high labor productivity. The International Monetary Fund has considered Malaysia as the 4th largest economy in Southeast Asia. The manufacturing industry has been the greatest contributor to their success since the 1960s and continues to do so as the country is averaging at a 5.1% GDP growth rate.

Major economic hubs:

Kuala Lumpur, Georgetown and Johor Bahru

Skills in demand:

Programmer or Software Engineers, Information Technology (IT) Specialists, Data Scientists/ Data Analysts / Data Engineers. Computer Science – Cybersecurity, Digital Forensics, Blockchain

Malaysia

Top local universities in Malaysia

Uni1 1

Universiti Malaya

RANKING

Local: 1

World: 693

Uni2 9

Universiti Teknologi MARA

RANKING

Local: 2

World: 890

Uni3 1

Universiti Sains Malaysia

RANKING

Local: 3

World: 990

Uni4 1

Universiti Kebangsaan Malaysia

RANKING

Local: 4

World: 1062

Uni5

Universiti Teknologi Malaysia

RANKING

Local: 5

World: 1081

Top Local Job Boards:

Indeed, Neuvoo, Jobs-Station.com

Number of LinkedIn users:

7,003,000

Top Recruitment Agencies:

Monroe Consulting Group, Seekers Malaysia, Hays Malaysia

Where to find talent

Top Local Job Boards:

Number of LinkedIn users:

Top Recruitment Agencies:

Salary Data

Some common jobs in Malaysia and their corresponding monthly salary are listed below:

Job Title Average Monthly Salary (MYR) Average Monthly Salary (USD)
Marketing Manager 12,100 MYR 2,643 USD
Product Manager 9,600 MYR 2,097 USD
Sales Executive 8,670 MYR 1,894 USD
Developer 6,760  MYR 1,476 USD
UI/UX 4,740 MYR 1,035 USD
Accounting 4,550 MYR 994 USD

Employ in Malaysia

Employing in Malaysia

Knowing the labor laws in Malaysia is crucial when employers onboard workers from the country. Below are some items that should guide businesses when they take in Malaysian employees into their team. 

Employee Contract

There is no statutory language to be used in the Malaysian employment contracts, provided that both employers and employees understand the terms in the document. 

Probation Period

Newly hired Malaysian employees can be under probationary status for up to 6 months of employment. 

Public and Provincial Holidays

Date Name
January 29 Lunar New Year’s Day
January 30 Second Day of Lunar New Year
March 31 Hari Raya Puasa
April 1 Hari Raya Puasa Day 2
May 1 Labour Day
June 2 The Yang di-Pertuan Agong’s Birthday
June 7 Hari Raya Haji
June 27 Muharram/New Year
August 31 Malaysia’s National Day
September 1 Malaysia’s National Day observed
September 5 The Prophet Muhammad’s Birthday
September 16 Malaysia Day
December 25 Christmas Day
Local Holidays
Date Name Localities
January 1 New Year’s Day All except JHR, KDH, KTN, PLS, TRG
January 14 Birthday of Yang di-Pertuan Besar NSN
January 27 Isra and Mi’raj KDH, NSN, PLS, TRG
January 30 Lunar New Year Holiday KTN, TRG
February 1 Federal Territory Day KUL, LBN, PJY
March 1 First Day of Ramadan JHR, KDH, MLK
March 4 Anniversary of the Coronation of the Sultan of Terengganu TRG
March 17 Nuzul Al-Quran KTN, PHG, PNG, PRK, PLS, SGR, TRG, KUL, LBN, PJY
March 23 Birthday of the Sultan of Johor JHR
April 15 Declaration of Malacca as Historical City MLK
April 18 Good Friday SBH, SWK
April 26 Birthday of the Sultan of Terengganu TRG
May 22 Pahang State Holiday PHG
May 30 Harvest Festival SBH, LBN
May 31 Second Day of Harvest Festival SBH, LBN
June 1 Gawai Dayak SWK
June 2 Gawai Dayak Holiday SWK
June 2 Gawai Dayak observed SWK
June 6 Day of Arafat KTN, TRG
June 8 Hari Raya Haji (Day 2) KDH, KTN, PLS, TRG
June 15 Sultan of Kedah’s Birthday KDH
July 7 George Town World Heritage City Day PNG
July 12 Penang Governor’s Birthday PNG
July 17 Birthday of the Raja of Perlis PLS
July 22 Sarawak Independence Day SWK
July 30 Birthday of the Sultan of Pahang PHG
August 1 Almarhum Sultan Iskandar Hol Day JHR
August 24 Birthday of the Governor of Malacca MLK
August 25 Birthday of the Governor of Malacca observed MLK
October 4 Birthday of the Governor of Sabah SBH
October 11 Birthday of the Governor of Sarawak SWK
November 7 Birthday of the Sultan of Perak PRK
November 11 Birthday of the Sultan of Kelantan KTN
November 12 Birthday of the Sultan of Kelantan (Day 2) KTN
December 11 Birthday of the Sultan of Selangor SGR
December 24 Christmas Eve SBH

Employee Leaves

Type of Leave Time Period Mandatory
Annual Leave 8 days  Yes
Sick Leave 14 days Yes
Maternity Leave 14 weeks Yes

 

Leave Compliance

Payroll in Malaysia

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Payroll cycle

Payroll in Malaysia is paid monthly. It is given within the first 7 days of the following month.

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Minimum wage

Minimum wage in Malaysia varies from the Municipal councils from areas outside it. The former has a minimum wage of MYR 1,700.00 per month. 

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Overtime pay

Overtime pay is based on the day that the work is performed. Below are the rates:

Read more

How taxes work

Employer and Employee Payroll Tax

Employee Provident Fund (EPF):

Contributions Malaysian citizens and permanent residents (mandatory) Expatriates and foreign workers (without permanent resident status) (voluntary)
Rate of contribution of employee’s wages (minimum)
Employer Employee Employer Employee
Below age 60:
Income > MYR 5,000 12% 11% MYR 5 per person 11.0%
Income ≤ MYR 5,000 13%
Above age 60:
Income > MYR 5,000 Malaysian: 4.0%;
Permanent resident: 6.0%
Malaysian: 0%; Permanent resident: 5.5% MYR 5 per person 5.5%
Income ≤ MYR 5,000 Malaysian: 4.0%;
Permanent resident: 6.5%

Social Security Organisation (SOCSO):

Contribution to Employer Rate Employee Rate
Employment Injury Scheme (EIS) and Invalidity Scheme (IS) Maximum MYR 86.65 Maximum MYR 24.75
Employment Insurance System (EIS) 0.2% (Restricted to MYR 9.90) 0.2% (Restricted to MYR 9.90)

Employee Income Tax

Taxable Income Range (Malaysian Ringgits, MYR) Calculations (RM) Tax Rate (%) Tax (RM)
0 – 5,000 On the first 5,000 0 0
5,001 – 20,000 On the first 5,000

Next 15,000

1 0

150

20,001 – 35,000 On the first 20,000

Next 15,000

3 150

450

35,001 – 50,000 On the first 35,000

Next 15,000

8 600

900

50,001 – 70,000 On the first 50,000

Next 20,000

11 1,500

2,200

70,001 – 100,000 On the first 70,000

Next 30,000

19 3,700

5,700

100,001 -400,000 On the first 100,000

Next 150,000

25 9,400

75,500

400,001 – 600,000 On the first 400,000

Next 200,000

26 84,400

52,000

600,001 – 2,000,000 On the first 600,000

Next 400,000

28 136,400

392,000

Above 2,000,000 On the first 2,000,000

Next ringgit (MYR)

30 528,400

VAT

Malaysia’s sales and services tax is projected to tread around by 10% in 2022.

Bonus

13th Month Pay

In Malaysia, a 13th month pay is not mandatory. Although, it is customary to provide a 13th month pay at the end of the year. 

Employee Benefits

Employers in Malaysia may provide the following benefits to their employees: 

  • Medical insurance.
  • Life insurance.
  • Disability insurance.
  • Retirement contributions and pension plans.

Employee offboarding

Malaysia observes a  pro-employee system.  When terminating an employment contract, Employers must send out a notice with a just reason for dismissal. Employees will then have the opportunity to provide an explanation, challenge the employer’s decision or accept it.

Malaysian employees under the probationary period will have up to 30 days of notice period. On the other hand, Malaysian employees after probation will  have up to 3 months of probation period.  

Years of Service Amount of Pay (per year of employment)
Below or equal to 2 years 10 days of salary
2 years to 5 years 15 days of salary
Above 5years 20 days of salary

 

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Visa and
immigration

Getting an employment visa in Malaysia includes acquiring a Malaysia Work Permit. There are 3 types of work permit base on how long the employee intends to stay in the country:

  • Employment Pass – issued from 1 to 5 years
  • Temporary Employment Pass – issued up to 2 years
  • Professional Visit Pass – issued for a year (12 months)

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