Malaysia
Min. wage
(x12 payments)
RM1,700 /mo
About the minimum wage
Employer tax
~13.95-14.95%
Understand employer tax
Annual leave
8 days
Learn about annual leave
Notice period
4-8 weeks (by tenure)
Termination and notice info
Updated
Sep 2026
The standard and default employment relationship is an open-ended (permanent/indefinite) contract of service, terminable only by lawful notice, mutual agreement, or dismissal with just cause and excuse. Since 1 Jan 2023, the Employment Act's core protections apply to ALL employees regardless of salary level (previously capped at RM2,000/month).
Fixed-term contracts are lawful where there is a genuine, demonstrable temporary need. No statutory cap on renewals, but courts scrutinise the substance of the relationship - repeated back-to-back renewals covering an ongoing role suggest disguised permanent employment. If reclassified, the employee gains full protections and non-renewal can be challenged as unfair dismissal unless just cause and excuse is shown.
Normal hours must not exceed 8 hours/day or 45 hours/week; max daily spread-over 10 hours, with a rest break of at least 30 minutes after 5 consecutive hours. Overtime capped at 104 hours/month. Overtime pay under Part XII applies to employees earning RM4,000/month or below (manual workers regardless of wage) at minimum 1.5x for normal-day overtime, 2x for rest-day work, 3x for public-holiday work.
The Employment Act 1955 does not mandate, define, or cap probation periods - it is purely contractual. Employers commonly use 3-6 months. Probationers still accrue statutory leave and are protected against dismissal without just cause once deemed 'employees.' Notice during probation is whatever is stated in the contract. An employee whose probation is neither confirmed nor extended in writing at the end of the stated period is generally deemed confirmed.
Malaysia has no statutory requirement for a 13th or 14th month salary/bonus. It is extremely common market practice - many employers pay a discretionary 'Hari Raya'/annual bonus equivalent to roughly one month's salary, sometimes written into the employment contract, becoming a contractual (not statutory) entitlement.
No general job-title licensing regime, but several professions require local registration (law, medicine, engineering, accounting). For foreign nationals, employment is gated by immigration approvals: an Employment Pass (managerial/professional/skilled roles) or Visitor's Pass (Temporary Employment) for lower-skilled roles subject to sector-specific quotas and levies.
For a Malaysian/PR employee earning above RM5,000/month, total statutory employer contributions are approximately 13.95%: EPF 12%, SOCSO 1.75% (capped at RM6,000/month), EIS 0.2% (capped at RM6,000/month). For employees earning RM5,000/month or below, EPF employer rate rises to 13% (total ~14.95%). Separately, employers with 10+ Malaysian employees must pay a 1% HRDF training levy, and employers hiring non-Malaysian staff pay an annual foreign-worker levy instead. Since 1 October 2025, EPF for foreign employees became mandatory at a flat 2% employer/2% employee rate.
Total statutory employee contributions for a Malaysian/PR employee under 60: approximately 11.7% of gross salary: EPF 11% (uncapped), SOCSO 0.5% (capped at RM6,000/month; 0% for 60+), EIS 0.2% (capped at RM6,000/month; not applicable to 60+ or certain foreign-worker categories). Non-Malaysian employees generally not covered by EIS and contribute EPF at a flat 2% rate since 1 October 2025.
In addition to statutory leave, employees are entitled to the following statutory benefits:
Malaysia's core statutory schemes are EPF/KWSP, SOCSO/PERKESO, and EIS. Rates below are for Malaysian citizens/PRs under 60; foreign employees are subject to different (generally lower) rates.
Work-related injury, occupational disease, and commuting accidents for Malaysian employees are covered under SOCSO's Employment Injury Scheme, funded entirely by the employer's 1.75% contribution.
Statutory termination/lay-off benefits apply to employees dismissed by reason of redundancy/retrenchment or non-renewal of a fixed-term contract for business reasons, with at least 12 months of continuous service.
Calculated pro-rata for incomplete years; must generally be paid within 7 days of termination. Does not apply to dismissal for misconduct, poor performance, or voluntary resignation.
There is no statutory 13th (or 14th) month salary requirement in Malaysia.
P.S. our team speaks multiple languages and we'd love to chat in your preferred language if requested.
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 are paid on time. 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).
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.
Whenever the employee or employer has a question about, or anything else related to international employment, they can speak with our customer support team to get answers from our team of experts.
