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Employer of Record (EOR) in Malaysia

What you'll learn

  • Country Introduction
  • Employment Terms
  • Minimum Wage and Working Hours
  • Statutory Leave Laws
  • Termination Process
  • Additional Information
Malaysia Introduction

Malaysia is a country in southeast Asia that is separated by the South China Sea into 2 parts: Peninsular Malaysia and Borneo's East Malaysia. It shares land and maritime borders with Thailand, Brunei, and Indonesia, and maritime borders with Singapore, Vietnam, and the Philippines. Malaysia is a multiethnic and multicultural country, about half the population is ethnically Malay, with minorities of Chinese, Indian, and indigenous peoples. Kuala Lumpur is the capital and has a growing tech sector with highly skilled services professionals.

Employment Terms

The minimum wage in Malaysia is MYR 1,500 per month, with a standard workweek of 8 hours per day with a maximum of 45 hours per week. Overtime work is regulated by employment contracts/collective agreements, and is paid between 150%-300% of the regular salary.

Types of Leave

Parental Leave

Pregnant employees are entitled to paid maternity leave for 98 days, and can start at most 30 days before the due date. Maternity leave in Malaysia only applies for the first 5 children. Fathers can take 7 days of paternity leave after the birth.

Sick Leave

Employees can take paid sick leave, the length of which depends on the years of employment:

  • 0-2 years = 14 days of sick leave
  • 2-5 years = 18 days of sick leave
  • 5+ years = 22 days of sick leave

Paid Leave

There are 10 public holidays in Malaysia, and employees are entitled to paid time off each year (the length of which depends on the years of employment):

  • 1-2 years = 8 days of paid time off
  • 2-5 years = 12 days of paid time off
  • 5+ years = 16 days of paid time off

Termination Process


The termination process in Malaysia requires sufficient cause for dismissal without notice. Notice of termination of an employment contract must be given in writing and sent to the relevant government authorities.

Notice Period

While there is no statutory requirement for the length of notice periods in Malaysia, 30 days of notice is commonly given.

Severance Pay

Severance pay varies based on how long an employee has worked at their company:

  • 0-2 years = 10 days of wages per year of service
  • 2-5 years = 15 days of wages per year of service
  • 5+ years = 20 days of wages per year of service

Additional Information

While not legally required, it is customary to pay a 13th-month salary payment at the end of each the year in Malaysia. As of 2023, employees can now apply for flexible work arrangements, and employers have 60 days to respond with either an agreement or a reason for the rejection.

Malaysian Ringgit (MYR)
Capital City:
Kuala Lumpur
33.8 Million
Cost of Living Rank:
VAT (Valued Added Tax):
Employer TaxES

★  4%-13% - Provident Fund (age-based contribution)

★  1.75% - Social Security

★  0.2% - Employment Insurance

★  1% - Human Resource Development Fund

Get Started in 3 Steps


Remote candidate

You've sourced a full-time employee or contractor located in a country where your company is not incorporated.


Cost Calculation

Pass us the details of your candidate and we will let you know exactly what it costs to employ your candidate in that country.


Onboarding & Admin

Sit back and relax as we onboard your new team member and take care of all the local compliances and admin work.

Same-day onboarding
Best Pricing
Available in 180+ countries
How Remofirst employs in Malaysia

It can be prohibitively expensive to establish an entity in every country you want to hire talent in, so Remofirst will hire and pay your employee on your behalf while you manage their daily duties. Remofirst will handle formal HR procedures and employment contracts that adhere to local laws, so that you can simply approve invoices via our platform. When you work with an Employer of Record (EOR) you can compliantly hire the best employees around the world.

How employees in Malaysia get paid
Your employee's hours, time off, holidays, bonuses, and commissions are automatically calculated into payroll. Remofirst will invoice you in either US Dollars (USD), Euros (EUR), British Pounds (GBP), Canadian Dollars (CAD), Australian Dollars (AUD), or Singapore Dollars (SGD) around the 15th of each month to make sure your employees in Malaysia are paid on time in Malaysian Ringgit (MYR). To make it even easier, you can summarize your entire global team's salaries to aggregate them into one payment (instead of many individual payments).
Full-time Employees vs Global Contractors

Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.

Dependable support for employees
Whenever the employee or employer has a question about benefits, Visas, or anything else related to international employment in Malaysia, they can speak with our customer support team to get answers from our team of experts.