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Your guide to the employment landscape, working customs and local labor laws in Malaysia
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
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:
Local: 1
World: 693
Local: 2
World: 890
Local: 3
World: 990
Local: 4
World: 1062
Local: 5
World: 1081
Indeed, Neuvoo, Jobs-Station.com
7,003,000
Top Local Job Boards:
Top Local Job Boards
Number of LinkedIn users:
Number of LinkedIn users
Top Recruitment Agencies:
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 |
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.
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.
Newly hired Malaysian employees can be under probationary status for up to 6 months of employment.
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 |
Type of Leave | Time Period | Mandatory |
Annual Leave | 8 days | Yes |
Sick Leave | 14 days | Yes |
Maternity Leave | 14 weeks | Yes |
Leave Compliance
Payroll cycle
Payroll in Malaysia is paid monthly. It is given within the first 7 days of the following month.
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.
Overtime pay
Overtime pay is based on the day that the work is performed. Below are the rates:
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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% |
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) |
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
– |
Malaysia’s sales and services tax is projected to tread around by 10% in 2022.
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.
Employers in Malaysia may provide the following benefits to their employees:
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 |
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:
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Overtime Pay
Minimum Wage
Overtime Pay
Day of Overtime | Rate |
Extra hours worked on normal working day | 150% |
Rest days | 200% |
Public holidays | 300% |
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