Payroll Cycle
Minumum Wage
Overtime Pay
Day of Overtime Rate
Extra hours worked on normal working day 150%
Rest days 200%
Public holidays 300%
Visa Immigration

Talent Wiki - Malaysia

Your quick guide on talent and labor compliance norms in Malaysia
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Capital
Kuala Lumpur
Currency
Malaysian Ringgit (MYR)
Languages
Malay (Official), English, Chinese
Payroll Frequency
Monthly
GDP per Capita
$12,295
Employer Tax
19.2% - 22.7%

Supplementary Guide for Employment and Expansion 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:

Universiti Kebangsaan Malaysia

RANKING

Malaysia : 1

World : 785

Universiti Malaya

RANKING

Malaysia : 2

World : 818

Universiti Sains Malaysia

RANKING

Malaysia : 3

World : 873

Universiti Teknologi MARA

RANKING

Malaysia : 4

World : 905

Universiti Teknologi Malaysia

RANKING

Malaysia : 5

World : 961

Salary Data

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

No. Job Title Salary Range (in MYR) Salary Range (in USD)
1 Accounting 2,280 - 7,060 543.50 - 1,682.96
2 Sales Executive 4,250 - 13,500 1,013.11 - 3,218.12
3 Marketing Manager 6,180 - 18,700 1,473.18 - 4,457.69
4 Developer 2,570 - 8,870 612.63 - 2,114.42
5 UI/UX 2,420 - 7,300 576.88 - 1,740.17
6 Product Manager 5,090 - 14,600 1,213.35 - 3,480.33

Talent Sourcing Tips

Top Local Job Boards

Indeed, Neuvoo, Jobs-Station.com

Number of LinkedIn Users

6,603,000

Top Recruitment Agencies

Monroe Consulting Group ,Seekers Malaysia, Hays 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 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
18 Jan Thaipusam State Holiday JHR, KDH, KUL, NSN, PJY, PNG, PRK, SGR
1 Feb Lunar New Year's Day Federal Public Holiday
1 Feb Federal Territory Day Federal Territory Holiday KUL, LBN, PJY
2 Feb Second Day of Lunar New Year Federal Public Holiday All except KTN, TRG
2 Feb Lunar New Year Holiday State Holiday Kelantan, Terengganu
1 Mar Isra and Mi'raj State Holiday KDH, NSN, PLS, TRG
4 Mar Anniversary of the Coronation of the Sultan of Terengganu State Holiday Terengganu
23 Mar Birthday of the Sultan of Johor State Holiday Johor
3 Apr First Day of Ramadan State Holiday JHR, KDH, MLK
15 Apr Good Friday State Holiday Sabah, Sarawak
15 Apr Declaration of Malacca as Historical City State Holiday Malacca
19 Apr Nuzul Al-Quran State Holiday KTN, KUL, LBN, PHG, PJY, PLS, PNG, PRK, SGR, TRG
26 Apr Birthday of the Sultan of Terengganu State Holiday Terengganu
1 May Labor Day Federal Public Holiday
2 May Labor Day observed Federal Public Holiday
2 May Hari Raya Puasa Federal Public Holiday
3 May Hari Raya Puasa Day 2 Federal Public Holiday
15 May Wesak Day Federal Public Holiday
22 May Pahang State Holiday State Holiday Pahang
23 May Pahang State Holiday observed 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
6 Jun The Yang di-Pertuan Agong's Birthday Federal Public Holiday
19 Jun Sultan of Kedah's Birthday State Holiday Kedah
7 Jul George Town World Heritage City Day State Holiday Penang
9 Jul Day of Arafat (Tentative Date) State Holiday Terengganu
9 Jul Penang Governor's Birthday State Holiday Penang
10 Jul Hari Raya Haji (Tentative Date) Federal Public Holiday
10 Jul Hari Raya Haji holiday (Tentative Date) Federal Public Holiday
11 Jul Hari Raya Haji (Day 2) (Tentative Date) Federal Public Holiday Kelantan, Terengganu
11 Jul Hari Raya Haji (Day 2) (Tentative Date) State Holiday Kedah, Perlis
17 Jul Birthday of the Raja of Perlis State Holiday Perlis
18 Jul Birthday of the Raja of Perlis observed State Holiday Perlis
22 Jul Sarawak Independence Day State Holiday Sarawak
30 Jul Muharram/New Year (Tentative Date) Federal Public Holiday
30 Jul Birthday of the Sultan of Pahang State Holiday Pahang
24 Aug Birthday of the Governor of Malacca State Holiday Malacca
31 Aug Malaysia's National Day Federal Public Holiday
3 Sep Almarhum Sultan Iskandar Hol Day State Holiday Johor
16 Sep Malaysia Day Federal Public Holiday
1 Oct Birthday of the Governor of Sabah State Holiday Sabah
8 Oct Birthday of the Governor of Sarawak State Holiday Sarawak
9 Oct The Prophet Muhammad's Birthday (Tentative Date) Federal Public Holiday
24 Oct Diwali/Deepavali Federal Public Holiday All except SWK
4 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
12 Dec Day off for Birthday of the Sultan of Selangor State Holiday Selangor
24 Dec Christmas Eve State Holiday Sabah
25 Dec Christmas Day Federal Public Holiday
26 Dec Christmas Day observed Federal Public 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.

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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 1,200.00 per month while the latter is MYR 1,100.00 per month.

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Overtime pay

Overtime pay is based on the day that the work is performed. Click on the link below to know about the rates:

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Health Examination Clause

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.
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Taxes

Employer-Employee Payroll Tax

Type of Tax Contribution Rate
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%

Employee Income Tax

Type of Tax Contribution Rate
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 Income Tax

Chargeable income (RM) Tax (RM) % on excess
5,000 0 1
20,000 150 3
35,000 600 8
50,000 1,800 13
70,000 4,400 21
100,000 10,700 24
250,000 46,700 24.5
400,000 83,450 25
600,000 133,450 26
1,000,000 237,450 28
2,000,000 517,450 30

VAT

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

Offboarding & Termination

Termination Process

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. 

Notice Period

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.

Severance Pay

Years of Employment Amount of Pay (per year of employment)
≤ 2 10 days of salary
2 – 5 15 days of salary
> 5 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)
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