Hire compliantly in Malaysia. Navigate EPF, SOCSO, EIS and a contribution system where the acronyms outnumber the actual tax rates.
Capital
Kuala Lumpur
Language
Malay, English
Average Salary
MYR 4,000
Payroll Cycle
Monthly
Employer Cost
15-20%
Paid Leave
8-16 days
Public Holidays
14-16 days
Tax Rates
0-30%
Detailed guides on the employment topics that matter most when hiring in Malaysia. Independently researched, updated for 2026.
Malaysia’s minimum wage in 2026 is RM1,700 per month (approximately USD 370), unchanged from the increase that took effect on 1 February 2025. The rate applies nationwide to all employees, including foreign workers, part-time workers, and gig workers. The only exemptions are domestic helpers and apprentices. This guide covers the current minimum wage rates in Malaysia, daily and hourly breakdowns, mandatory employer contributions (EPF, SOCSO, EIS), working hours and overtime rules, leave entitlements, penalties for non-compliance, and what international companies hiring in Malaysia need to know.
Read ArticleSOCSO (PERKESO) is Malaysia's mandatory social security system covering all private-sector employees. Employers contribute approximately 1.75% and employees 0.5% of monthly salary under the First Category (Employment Injury + Invalidity), capped at the RM6,000/month wage ceiling since October 2024. Combined with EPF (12-13%), EIS (0.2%), and HRDF (1%), total employer statutory contributions in Malaysia are approximately 15 to 16% of gross salary, among the lowest in Asia. This guide covers both SOCSO schemes, the table-based contribution system, EIS, foreign worker rules (Invalidity Scheme inclusion from July 2024), registration, penalties, and a worked example of total employer cost.
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EPF became mandatory for foreign workers from October 2025. Any provider still treating foreign employee EPF as voluntary is non-compliant and will trigger penalties at audit.
| Key Employment Facts | |
| Minimum Wage | MYR 1,700/month (nationwide) |
| Probation Period | Typically 3-6 months (contractual, not statutory) |
| Standard Working Hours | 45 hours/week (reduced from 48 in 2023) |
| Paid Annual Leave | 8 days (under 2 years), 12 days (2-5 years), 16 days (5+ years) |
| Notice Period | 4-8 weeks (by tenure, or as per contract) |
| 13th Salary | Not statutory (bonuses common, typically 1-3 months) |
| Sick Leave | 14-22 days (by tenure) + 60 days hospitalization |
| Maternity Leave | 98 days at full pay |
Good to Know: Malaysia’s minimum wage increased to MYR 1,700/month from February 2025, applying to all employers nationwide including foreign workers and part-time staff. EPF has no contribution cap, meaning it scales linearly with salary and is the single largest employer cost. The 2022 Employment Act amendments extended coverage to all employees regardless of salary, but overtime pay (1.5x-3x) only applies to those earning MYR 4,000/month or below. Maternity leave of 98 days at full pay is among the most generous in Asia. Paternity leave is 7 days paid. Sick leave scales with tenure: 14 days (under 2 years), 18 days (2-5 years), 22 days (5+ years), plus 60 days hospitalization leave if certified by a registered medical practitioner.
| Employer Contributions | |
| Contribution | Employer Rate |
| EPF (wages MYR 5,000 and below) | 13% |
| EPF (wages above MYR 5,000) | 12% |
| SOCSO (Employment Injury + Invalidity) | ~1.75% (tiered, capped at MYR 6,000) |
| EIS (Employment Insurance) | ~0.2% (capped at MYR 6,000) |
| HRDF (if applicable) | 1% of payroll |
| Total Employer Cost | ~15-20% of gross wages |
| Employee Taxes | |
| Tax / Contribution | Employee Rate |
| Income Tax (PCB/MTD, progressive) | 0-30% |
| EPF (employee share) | 11% |
| SOCSO (employee share) | ~0.5% (tiered, capped at MYR 6,000) |
| EIS (employee share) | ~0.2% (capped at MYR 6,000) |
Total employer cost in Malaysia runs at approximately 1.15x to 1.20x of gross salary. For an employee earning MYR 6,000/month in KL, budget approximately MYR 6,900 to MYR 7,200 in total employer cost. EPF dominates: at 12-13% with no cap, it scales linearly with salary. A MYR 15,000/month senior hire costs MYR 1,800-1,950 in EPF alone, every month, indefinitely.
Malaysia has 11 national public holidays observed across all states. Each state adds 2-4 additional holidays (typically the state Sultan's birthday and state-specific religious observances). Islamic holidays shift annually based on the lunar calendar.
| Date | Holiday |
| January 1 | New Year’s Day |
| February 2 | Thaipusam |
| February 17-18 | Chinese New Year (2 days) |
| March 21-22 | Hari Raya Aidilfitri (approximate, 2 days) |
| May 1 | Labour Day |
| May 27 | Hari Raya Haji (approximate) |
| May 31 | Wesak Day |
| June 1 | Yang di-Pertuan Agong’s Birthday |
| June 17 | Awal Muharram / Islamic New Year (approximate) |
| August 25 | Prophet Muhammad’s Birthday (approximate) |
| August 31 | Merdeka Day (National Day) |
| September 16 | Malaysia Day |
| November 8 | Deepavali |
| December 25 | Christmas Day |
Islamic holidays (Hari Raya Aidilfitri, Hari Raya Haji, Awal Muharram, Maulid Nabi) are determined by moon sighting and may shift by 1-2 days. Each state observes additional holidays, including the state ruler’s birthday and regional celebrations. Employees required to work on a public holiday are entitled to overtime at 3x their hourly rate for the first 8 hours.
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