Malaysia: Payroll & Employment Facts
Verified statutory employment facts for Malaysia, each with its official source and the date it applies from. This is our reference record. For provider choice and hiring advice, see the Malaysia employer-of-record guide and the Malaysia country hub.
What is the minimum wage in Malaysia?
| National minimum wage |
RM 1,700.00 / month
|
|---|---|
| Next review date |
2026-12-31
|
What employer social contributions apply in Malaysia?
Rates are a percentage of gross wage, applied up to the annual contribution ceiling.
| Employer social security rate |
12.00%
|
|---|---|
| Pension |
12.0-13.0%
|
| Healthcare |
Not available
|
| Annual contribution ceiling |
72,000 MYR
|
| Total employer burden |
13.0 - 13.45%
|
What notice and leave rules apply in Malaysia?
Statutory minimum notice the employer must give, by completed length of service.
| Length of service | Employer notice |
|---|---|
| 0 to 23 months | 4 weeks |
| 24 to 59 months | 6 weeks |
| 60+ months | 8 weeks |
| Payment in lieu of notice (PILON) |
Permitted
|
|---|---|
| Minimum annual leave |
8 days
|
| Annual leave includes public holidays |
No
|
| Public holidays per year |
12 days
|
Is 13th-month pay required in Malaysia?
None of the following are mandated by statute; they may still arise from a contract or collective agreement.
| Thirteenth-month pay required |
Not available
|
|---|---|
| Profit sharing required |
Not available
|
| Holiday bonus required |
Not available
|
How is severance calculated in Malaysia?
| Formula |
Termination & Lay-Off Benefits Regulations 1980: 10 days' wages per year of service for under 2 years; 15 days/year for 2 to under 5 years; 20 days/year for 5+ years. Statutory benefit covers Employment Act employees (post-2023 wage ceiling RM4,000/month) with at least 12 months' continuous service.
|
|---|---|
| Per-year multiplier |
[{'min_years': 0, 'max_years': 2, 'days': 10}, {'min_years': 2, 'max_years': 5, 'days': 15}, {'min_years': 5, 'max_years': None, 'days': 20}] weeks of pay per year of service (for 5+ years tenure)
|
| Minimum qualifying tenure |
12 months
|
| Calculation base |
Regular one day's wages is calculated as (monthly wages / 26). 'wages' includes basic salary and other regular cash payments but excludes items like travel allowances, bonuses, and gratuity.
|
Worked example
An employee with 5 years of continuous service and an annual salary of £30,000 is made redundant. 1. Convert salary to local currency (MYR). Assuming 1 GBP = 5.80 MYR: Annual Salary: £30,000 * 5.80 = MYR 174,000 Monthly Salary: MYR 174,000 / 12 = MYR 14,500 2. Determine the multiplier. With 5 years of service, the rate is 20 days' wages per year of service. 3. Calculate 'one day's wages': One Day's Wages = Monthly Salary / 26 = MYR 14,500 / 26 = MYR 557.69 4. Calculate total severance pay: Total Pay = (Multiplier Rate * One Day's Wages) * Years of Service Total Pay = (20 * MYR 557.69) * 5 Total Pay = MYR 11,153.80 * 5 = MYR 55,769.00 Statutory severance pay is MYR 55,769.00.