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Hiring guidelines in Malaysia
- Pay & taxes
- Leave policy
- Termination
- Time-off
- Additional info
Pay & taxes
Leave policy
Termination
Time-off
Additional info
Minimum Wage Requirements
The minimum wage for employees in Malaysia is MYR 1,500 per month.
Individual Income Tax
The individual income tax ranges from 0% to 30%. Income tax is calculated according to progressive rates. Multiple additional factors may impact overall rates such as the household status and the number of children.
| Gross Annual Income | Tax Rate (%) |
|---|---|
| Up to MYR 5,000 | 0 |
| Up to MYR 20,000 | 1% |
| Up to MYR 35,000 | 3% |
| Up to MYR 50,000 | 8% |
| Up to MYR 70,000 | 11% |
| Up to MYR 100,000 | 19% |
| Up to MYR 250,000 | 24% |
| Up to MYR 400,000 | 25% |
| Up to MYR 600,000 | 25% |
| Up to MYR 1,000,000 | 26% |
| Up to MYR 2,000,000 | 28% |
| Over 2,000,000 | 30% |
Payroll Cost
Employer cost ranges from 13% - 14% of employee salary:
- Employees Provident Fund (EPF):
- 12% for salaries lower than MYR 5,000
- 13% for salaries higher than MYR 5,000
- Employees’ Social Security (SOCSO) - from MYR 23.65 to MYR 86.65 depending on the employee’s salary
- Employment Insurance System (EIS): MYR 2.70 to MYR 9.90
- Human Resources Development Fund (HRDF) - 1.00%
Optional Cost
13th salary: Employers can decide to pay their employees in Malaysia a 13th salary. This is an optional bonus amounting to 1 month salary usually paid in January or December.
Overtime Pay & Maximum Hours
Overtime payment is mandatory and may be included in the salary if the employee is earning less than MYR 4,000 per month.
For employees earning over MYR 4,000 per month, overtime is not required and must be agreed upon between the employer and employee. Employees can work a maximum of 104 hours of overtime a month. For all additional hours, employees are paid 150% of their hourly rate. Weekends employees are paid at 200% of their hourly rate and for public holidays employees are paid at 300% of their hourly rate.
Standard working hours are eight hours per day, 40 hours per week. The standard workweek is from Monday to Friday.
For employees earning over MYR 4,000 per month, overtime is not required and must be agreed upon between the employer and employee. Employees can work a maximum of 104 hours of overtime a month. For all additional hours, employees are paid 150% of their hourly rate. Weekends employees are paid at 200% of their hourly rate and for public holidays employees are paid at 300% of their hourly rate.
Standard working hours are eight hours per day, 40 hours per week. The standard workweek is from Monday to Friday.