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Malaysia

Basic Economic Summary

Overview

Malaysia’s ongoing economic growth is all due to its high labor productivity. The country has embraced the benefits of digitalization and has incorporated it into its economic processes. Malaysian citizens are well-versed in technology and have been living an affluent lifestyle because of it. 

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 4.3% GDP growth rate. 

Basic Information

  • Local Languages: Malay (Official), English, Chinese
  • Major Economic Hubs: Kuala Lumpur, Johor Bahru, Seberang Perai
  • Currency: Malaysian Ringgit (MYR)
  • Population: 33.78 million (2022)
  • Date Format: dd/mm/yyyy

Useful Information

Local Universities

Renowned Local Universities:

Salary Data

Average Monthly Salary of Jobs:

Job Title Average Salary Range (MYR) Average Salary Range (USD)
Accounting 2,280 - 7,060 543.50 - 1,682.96
Sales Executive 4,250 - 13,500 1,013.11 - 3,218.12
Marketing Manager 6,180 - 18,700 1,473.18 - 4,457.69
Developer 2,570 - 8,870 612.63 - 2,114.42
UI/UX 2,420 - 7,300 576.88 - 1,740.17
Product Manager 5,090 - 14,600 1,213.35 - 3,480.33

Talent Sourcing Tips

English Proficiency: Moderate Proficiency

Number of LinkedIn Users (2021): 5,915,000

Top Local Job Portals: Indeed, Neuvoo, Jobs-Station.com

More information about job portals in Malaysia can be found here.

Top Recruitment Agencies: Monroe Consulting Group, Seekers Malaysia, Hays Malaysia

More information about recruitment agencies in Malaysia can be found here

Taxes

Employer Payroll Tax

Type of Tax Contribution (%)
Provident Fund (employees under the age of 60) 12% – 13%
Provident Fund (employees over the age of 60) 4% – 6.5%
Social Security (SOCSO) 2.00%
Employment Insurance (EIS) 0.20%
Human Resource Development Fund 1.00%

Links to the provident fund, social security, employment insurance and human resource development fund.

Employee Payroll Tax

Type of Tax Contribution (%)
Provident Fund (employees under the age of 60) 11%
Provident Fund (employees over the age of 60) 0-5.5%
Social Security (SOCSO) 0.50%
Employment Insurance (EIS) 0%

Employee Monthly Income Tax

Net Taxable Income (Ringgit) Contribution (%)
< 416.67 0%
416.67 – 1,666.67 1.00%
1,666.67 – 2,916.67 3.00%
2,916.67 – 4,166.67 8.00%
4,166.67 – 5,833.33 14.00%
5,833.33 – 8,333.33 21.00%
8,333.33 – 20,833.33 24.00%
20,833.33 – 33,333,33 24.50%
33,333.33 – 50,000 25.00%
50,000 – 83,333.33 26.00%
83,333.33 – 166,666.67 28.00%
> 166,666.67 30.00%

Malaysia follows a progressive income tax model. Links to the provident fund, social security, employment insurance and employee income tax.

Minimum Wage & Payroll

Minimum Wage

The minimum wage is 1,200 ringgits per month or 5.77 ringgits per hour.

Payroll Cycle

Payroll in Malaysia is paid monthly, within 7 days of the following month.

Bonus

13th month salary

Common practice in manufacturing industry to pay salaries in 13 instalments.

Working Hours & Statutory Leave

Maximum working hours

Maximum working hours: 48 hours per week. Most common office practice is 45 hours per week.

Maximum overtime hours

Maximum over time hours is 104 hours in 1 month (~4 hours in 1 day).

Overtime pay
PeriodRate
Extra hours worked on normal working day150%
Rest days200%
Public holidays300%

Public Holidays

Malaysia’s 16 public holidays can be found here. There are 6 compulsory public holidays & 10 optional public holidays. At least 5 of the 10 should be given, but it is common for all public holidays to be given.

Annual Leave

Years of EmploymentNumber of Leaves
≤ 28 days
2 – 512 days
> 516 days

Sick Leave

Years of EmploymentNumber of Leaves
≤ 214 days
2 – 518 days
> 522 days

Parental Leave

Maternity Leave

Female employees have 90 days paid leave if employed in the last 4 months and worked for the same employer for at least 90 days in 9 months prior to childbirth.

Paternity Leave

Not mandatory.

Offboarding & Termination

Termination Process

The termination process is relatively simple with notice to be given for the types of contracts as well as severance pay.

Notice Period

There is no set notice period, but should be equitable for both employee and employer

Severance Pay

Years of EmploymentAmount of Pay (Days)
≤ 210
2 – 515
> 520

Probation period

Probation is optional. Employment act does not distinguish between employees on probation and permanent employees.

Employee Benefits

Insurance

Malaysia has enacted the Employment Insurance System Act 2017 (‘the EIS Act’) to establish a social security system for their workers. Insured employees can claim up to 6 months’ worth of benefits once the contract of service has been terminated (except for voluntary resignation, mutual termination, retirement, termination due to misconduct, etc.), Insured employees will have benefits such as job search allowance, early re-employment allowance, reduced income allowance, training allowance. For more information about this act, you may refer to this document here. 

Employee Stock Ownership Plan

ESOPs in Malaysia are granted by employers as a remuneration and incentive for their employees to boost productivity within their business. Some of the Employee Share Plan that Malaysian employers are offering are the following:

  • Employee Share Option Schemes (ESOSs);
  • Performance Share Plans (PSPs);
  • Restricted Share Plans (RSPs); and
  • Employee Share Purchase Plans (ESPPs).

Employees in Malaysia may either buy their company’s ordinary shares or the option to buy their shares in the future at a subsidised rate. 

VAT

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

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