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
$14,250.41
Employer Tax
19.2% - 22.7%
Your quick guide on talent and labor compliance norms in Malaysia
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:
Local: 1
World: 693
Local: 2
World: 890
Local: 3
World: 990
Local: 4
World: 1062
Local: 5
World: 1081
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 |
Talent Sourcing Tips
Indeed, Neuvoo, Jobs-Station.com
7,003,000
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 | Type | Details |
| 1 Jan | New Year’s Day | State Holiday | All except JHR, KDH, KTN, PLS, TRG |
| 14 Jan | Birthday of Yang di-Pertuan Besar | State Holiday | NSN |
| 15 Jan | Birthday of Yang di-Pertuan Besar observed | State Holiday | NSN |
| 25 Jan | Thaipusam | State Holiday | JHR, KDH, KUL, NSN, PJY, PNG, PRK, SGR |
| 1 Feb | Federal Territory Day | Federal Territory Holiday | KUL, LBN, PJY |
| 7 Feb | Isra and Mi’raj (Tentative Date) | State Holiday | KDH, NSN, PLS, TRG |
| 10 Feb | Lunar New Year’s Day | Federal Public Holiday | |
| 11 Feb | Second Day of Lunar New Year | Federal Public Holiday | All except KTN, TRG |
| 11 Feb | Lunar New Year Holiday | State Holiday | Kelantan, Terengganu |
| 4 Mar | Anniversary of the Coronation of the Sultan of Terengganu | State Holiday | Terengganu |
| 11 Mar | First Day of Ramadan (Tentative Date) | State Holiday | JHR, KDH, MLK |
| 23 Mar | Birthday of the Sultan of Johor | State Holiday | Johor |
| 27 Mar | Nuzul Al-Quran | State Holiday | KTN, KUL, LBN, PHG, PJY, PLS, PNG, PRK, SGR, TRG |
| 29 Mar | Good Friday | State Holiday | Sabah, Sarawak |
| 10 Apr | Hari Raya Puasa (Tentative Date) | Federal Public Holiday | |
| 11 Apr | Hari Raya Puasa Day 2 (Tentative Date) | Federal Public Holiday | |
| 15 Apr | Declaration of Malacca as Historical City | State Holiday | Malacca |
| 26 Apr | Birthday of the Sultan of Terengganu | State Holiday | Terengganu |
| 1 May | Labour Day | Federal Public Holiday | |
| 22 May | Pahang State Holiday | State Holiday | Pahang |
| 30 May | Harvest Festival | State Holiday | Labuan, Sabah |
| 31 May | Second Day of Harvest Festival | State Holiday | Labuan, Sabah |
| 1 Jun | Gawai Dayak | State Holiday | Sarawak |
| 2 Jun | Gawai Dayak Holiday | State Holiday | Sarawak |
| 3 Jun | The Yang di-Pertuan Agong’s Birthday | Federal Public Holiday | |
| 3 Jun | Gawai Dayak Holiday observed | State Holiday | Sarawak |
| 16 Jun | Day of Arafat (Tentative Date) | State Holiday | Kelantan, Terengganu |
| 16 Jun | Sultan of Kedah’s Birthday | State Holiday | Kedah |
| 17 Jun | Hari Raya Haji (Tentative Date) | Federal Public Holiday | |
| 17 Jun | Hari Raya Haji holiday (Tentative Date) | Federal Public Holiday | |
| 18 Jun | Hari Raya Haji (Day 2) (Tentative Date) | Common local holiday | KDH, KTN, PLS, TRG |
| 7 Jul | George Town World Heritage City Day | State Holiday | Penang |
| 8 Jul | Muharram/New Year (Tentative Date) | Federal Public Holiday | |
| 13 Jul | Penang Governor’s Birthday | State Holiday | Penang |
| 17 Jul | Birthday of the Raja of Perlis | State Holiday | Perlis |
| 22 Jul | Sarawak Independence Day | State Holiday | Sarawak |
| 30 Jul | Birthday of the Sultan of Pahang | State Holiday | Pahang |
| 12 Aug | Almarhum Sultan Iskandar Hol Day | State Holiday | Johor |
| 24 Aug | Birthday of the Governor of Malacca | State Holiday | Malacca |
| 31 Aug | Malaysia’s National Day | Federal Public Holiday | |
| 16 Sep | The Prophet Muhammad’s Birthday (Tentative Date) | Federal Public Holiday | |
| 16 Sep | Malaysia Day | Federal Public Holiday | |
| 5 Oct | Birthday of the Governor of Sabah | State Holiday | Sabah |
| 12 Oct | Birthday of the Governor of Sarawak | State Holiday | Sarawak |
| 1 Nov | Birthday of the Sultan of Perak | State Holiday | Perak |
| 11 Nov | Birthday of the Sultan of Kelantan | State Holiday | Kelantan |
| 12 Nov | Birthday of the Sultan of Kelantan (Day 2) | State Holiday | Kelantan |
| 11 Dec | Birthday of the Sultan of Selangor | State Holiday | Selangor |
| 24 Dec | Christmas Eve | State Holiday | Sabah |
| 25 Dec | Christmas Day | Federal Public Holiday |
| 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
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:
Taxes
| 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) |
| 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% | |
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:
| Day of Overtime | Rate |
| Extra hours worked on normal working day | 150% |
| Rest days | 200% |
| Public holidays | 300% |
