Talent Wiki - Malaysia
Your quick guide on talent and labor compliance norms in Malaysia
Capital
Kuala Lumpur
Currency
Malaysian Ringgit (MYR)
Languages
Malay (Official), English, Chinese
Payroll Frequency
Monthly
GDP per Capita
$13,107
Employer Tax
19.2% - 22.7%
Your quick guide on talent and labor compliance norms in Malaysia
Talent Wiki - Malaysia
Subsidiaries
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Work permit
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Payroll
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Benefits & Compensation
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Background checks
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Employment Act
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Sole Proprietorship
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PEO-EOR
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How to hire
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Starting business
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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 4.3% 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
Local Universities
The top local universities in Malaysia are as follows:
Universiti Malaya
RANKING
Local: 1
World: 677
Universiti Teknologi MARA
RANKING
Local: 2
World: 762
Universiti Sains Malaysia
RANKING
Local: 3
World: 838
Universiti Kebangsaan Malaysia
RANKING
Local: 4
World: 961
Universiti Teknologi Malaysia
RANKING
Local: 5
World: 967
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 | 6,180 MYR | 1,413 USD |
| Product Manager | 5,090 MYR | 1,163 USD |
| Sales Executive | 4,250 MYR | 971 USD |
| Developer | 2,570 MYR | 587 USD |
| UI/UX | 2,420 MYR | 553 USD |
| Accounting | 2,280 MYR | 521 USD |
Talent Sourcing Tips
Top Local Job Boards:
Indeed, Neuvoo, Jobs-Station.com
Number of LinkedIn users:
7,003,000
Top Recruitment Agencies:
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 | Holiday | Type |
| 1 Jan | New Year | Public Federal Holiday |
| 22 Jan | Chinese New year | Public Federal Holiday |
| 23 Jan | Chinese New Year | Public Federal Holiday |
| 24 Jan | Chinese New Year (observed) | Public Federal Holiday |
| 8 Apr | Nuzul Al-Quran | Public Federal Holiday |
| 22 Apr | Hari Raya Aidilfitri | Public Federal Holiday |
| 23 Apr | Hari Raya Aidilfitri | Public Federal Holiday |
| 24 Apr | Hari Raya Aidilfitri | Public Federal Holiday |
| 1 May | Labour day | Public Federal Holiday |
| 4 May | Wesak day | Public Federal Holiday |
| 5 Jun | Agong’s Birthday | Public Federal Holiday |
| 29 Jun | Hari Raya Haji | Public Federal Holiday |
| 19 Jul | Awal Muharram | Public Federal Holiday |
| 31 Aug | Merdeka | Public Federal Holiday |
| 16 Sep | Malaysia Day | Public Federal Holiday |
| 28 Sep | Prophet Muhammad’s Birthday | Public Federal Holiday |
| 25 Dec | Christmas day | Public Federal Holiday |
Employee Leaves
| Type of Leave | Time Period | Mandatory |
| Annual Leave | 8 days | Yes |
| Sick Leave | 14 days | Yes |
| Maternity Leave | 12 weeks | Yes |
Payroll
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 1,200.00 per month while the latter is MYR 1,100.00 per month.
Overtime Pay
Overtime pay is based on the day that the work is performed. Below are the rates:
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.
Taxes
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
| Annual Taxable Income | Tax on first amount | Tax rate on the excess | |
| 5,000 to 20,000 MYR | 0 | 1% | |
| 20,000 to 35,000 MYR | 150 MYR | 3% | |
| 35,000 to 50,000 MYR | 600 MYR | 8% | |
| 50,000 to 70,000 MYR | 1,800 MYR | 13% | |
| 70,000 to 100,000 MYR | 4,400 MYR | 21% | |
| 100,000 to 250,000 MYR | 10,700 MYR | 24% | |
| 250,000 to 400,000 MYR | 46,700 MYR | 24.5% | |
| 400,000 to 600,000 MYR | 83,450 MYR | 25% | |
| 600,000 to 1,000,000 MYR | 133,450 MYR | 26% | |
| 1,000,000 to 2,000,000 MYR | 237,450 MYR | 28% | |
| Above 2,000,000 MYR | 517,450 MYR | 30% | |
VAT
Malaysia’s sales and services tax is projected to tread around by 10% in 2022.
Offboarding & Termination
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 |
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)
