Current Region & Language
Currency
Malaysian Ringgit (MYR)
Employer Taxes
Employer contributions for EPF are about 13-15% of salaries, depending on salary levels.
Payroll Frequency
Monthly
Language
Malay
Date Format
DD/MM/YYYY
Malaysia By The Numbers
34 million
Population
MYR 1.5 trillion
GDP
9
National Holidays
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Weekly Working Hours
National Holidays
Leave
In Malaysia, employees are entitled to 11 days of paid gazette holidays each year. Annual leave varies depending on the length of service, with employees entitled to between 08 to 16 days of paid leave. Female employees are statutorily entitled to a minimum of 98 consecutive days of paid maternity leave, while male employees are eligible for up to 7 days of paid paternity leave. For medical leave, employees are entitled to 14 to 22 days of paid sick leave without hospitalization, and up to 60 days of paid sick leave with hospitalization within a calendar year.
Employment Contracts
In Malaysia, any contract of service that exceeds one month or involves work that would require more than a month to complete should be put in writing.
Types of Employment
There are two types of employment: Employees and Independent Contractors.
Employment Costs
EPF : Depending on the income, 12-13% for employees between 18 to 60 years and 6-6.5 % for employees older than 60 years.
EIS: 0.20 % for employees between 18 to 60 years.
SOCSO – 1.75%.
Human Resource Development Fund: 1%
IC Class Factors
The classification of an independent contractor (IC) is determined through a multifactor test that includes behavior control, relationship between the parties, financial control, and integration into the organization.
Labor Leasing
A labor leasing license is required to deploy temporary workers unless they are involved in recruitment and placement of workers for other businesses.
Minimum Wage Requirements
On 1 February 2025, the minimum monthly wages of RM 1,700 will apply to the following employers:
Medical Benefits
There are no specific requirements regarding medical benefits.
Probationary Periods
There is no legally mandated probation period for employees, and it is left to the employer’s discretion to determine whether or not to implement one.
Termination Notice
The notice period for termination of employment is generally determined by the Employment Act 1955 and can also be influenced by the terms of the employment contract. The notice period depends on the length of the employee’s service:
Less than 2 years of service: 4 weeks’ notice.
Between 2 to 5 years of service: 6 weeks’ notice.
More than 5 years of service: 8 weeks’ notice.
These notice periods apply whether the termination is initiated by the employer or the employee, unless a different notice period is stipulated in the employment contract. If no notice is given, the party terminating the employment relationship is generally required to pay compensation equivalent to the wages that would have been earned during the notice period.
Severance
Under the Employment (Termination and Lay-Off Benefits) Regulations 1980, an EA employee who has been employed for 12 months or more is entitled to severance payments based on their years of service. The severance payment structure is as follows: 10 days’ wages for each year of service if employed for less than 2 years, 15 days’ wages for each year of service if employed for 2 to 5 years, and 20 days’ wages for each year of service if employed for 5 years or more. Severance is calculated with pro-rata payments for incomplete years, rounded to the nearest month.
Pre-hire Checks
Immigration authorization or permission is required to prove the right to work for non-Malaysian citizens.
Criminal record and background checks may be required, depending on the industry and the job role and are permitted.
Employers should obtain the employee’s consent if the pre-hire checks require accessing, collecting or processing the employee’s personal data to ensure compliance with the Personal Data Protection Act 2020.
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The information provided on this website is for general informational purposes only and is subject to change without notice. The content on this website is not intended to be a substitute for professional legal advice, diagnosis, or treatment. While we strive to keep the information up to date and accurate, People 2.0 makes no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
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