Employment Act coverage
The 2022 amendments brought most employees under the Act. Certain hour and overtime provisions still turn on a RM4,000 monthly-wage line. Classify the role before you promise (or deny) overtime.
Countries/Malaysia/Hiring guide
Southeast Asia · Hiring guide · 2026
Hiring in Malaysia: labour law and payroll
This page is the labour-law and payroll stack for multinational employers hiring in Malaysia. It is not a salary survey.
In-country employment is how you run this stack without a Sdn Bhd.
To hire without incorporating first, use in-country employment in Malaysia.
Contracts
Contracts and probation
Written terms
Give the employee written particulars of the terms of employment. Stamp duty on written employment contracts is a 2026 compliance item — do not skip it because the hire is 'only six months'.
Probation
Probation is contractual. Notice during probation should be stated. Confirmation in writing closes the file; silence is how 'still on probation' disputes run for a year.
Hours
Working time and overtime
45-hour week
Maximum ordinary hours of work are 45 a week. Daily spreads and rest-day rules sit in the Act. Overtime for covered employees is paid at statutory multiples (typically 1.5× ordinary, higher on rest days and public holidays).
Paid leave
Annual leave, sick leave, and public holidays are statutory once qualifying service is met. Maternity and paternity leave follow the amended Act — not the older shorter entitlements.
Foreign employees
A work pass is required. Employment Pass salary thresholds are being revised in 2026 by category. Check the pass before you issue an offer letter that assumes last year's floor.
Wage floor
Minimum wage, 2026
Malaysia has a single national monthly minimum wage in 2026. EPF is the large statutory add-on for citizens and PRs.
| Rule | Figure |
|---|---|
| National minimum wage | RM1,700 / month (fully in force; under review, not yet replaced) |
| Daily equivalent (6-day week) | RM65.38 |
| EPF (citizens / PRs under 60) | Employer 13% ≤ RM5,000, 12% above; employee 11% |
| EPF (foreign employees) | 2% + 2% from October 2025 on a valid work pass |
The RM1,700 floor is basic wage. Allowances cannot be used to top up a sub-minimum basic salary. As of September 2026 the government is reviewing the rate under the National Wages Consultative Council Act; until a new order is gazetted, RM1,700 remains the law.
Exit
Terminating and offboarding
Notice
Notice follows the contract, subject to Employment Act minima that scale with length of service. Payment in lieu is the usual alternative.
Termination and lay-off benefits
The Employment (Termination and Lay-Off Benefits) Regulations can apply to qualifying employees on redundancy. Do not treat 'end of project' as a cost-free exit.
EPF and SOCSO on exit
Remit final contributions. Foreign-employee pass cancellation is a separate immigration step.
Questions
FAQ
- What is Malaysia's minimum wage in 2026?
- RM1,700 a month nationwide. It is basic wage, not a package of allowances. A review is underway as of September 2026; it has not replaced this rate.
- What is the overtime rule?
- Ordinary hours are capped at 45 a week. Covered employees earn statutory overtime multiples. Some hour rules still depend on whether monthly wages are at or below RM4,000 — classify the role.
- Do foreign employees pay EPF?
- Generally yes, at 2% employee and 2% employer from October 2025, if they hold a valid work pass. That is not the 12–13% citizen rate.
- Is a 13th month required?
- No. Write a bonus into the contract if you intend to pay one.
Other markets
Other hiring guide pages
Reviewed 11 September 2026
This is a hiring briefing for multinational employers, not legal advice. Statutory rates move by city, province, and sector. Confirm the place of work before you issue an offer.
Sources
- Employment Act 1955 (as amended 2022)
- Minimum Wages Order — RM1,700
- Employees Provident Fund Act — contribution rates
Hire in Malaysia
Tell us the city, the role, and whether this is a local contract or a search.