Countries/Malaysia/In-country employment
Southeast Asia · In-country employment
In-country employment in Malaysia
Malaysia is used as a bilingual hub for regional HQ, shared services, and peninsula manufacturing.
The national minimum wage is a monthly floor. EPF is the large add-on for Malaysian citizens and permanent residents. Foreign employees now have a separate, lower EPF path.
Plan an in-country hire- ✓
Malaysian contract — The person is employed under the Employment Act 1955, as amended, not as an unpaid visitor.
- ✓
You still manage — Your managers set the work. We run the contract, EPF / SOCSO / EIS, and payroll.
- ✓
No company first — Start the hire before you incorporate. Convert later if you open your own Sdn Bhd.
Statutory stack
What sits on top of wages
Statutory add-ons below are published contribution rates, not a salary survey. HRDF applies in listed industries above a headcount threshold.
| Item | 2026 rule |
|---|---|
| EPF (Malaysian citizens / PRs under 60) | Employer 13% on wages up to RM5,000, 12% above; employee 11% |
| EPF (foreign employees, from Oct 2025) | Employer 2% and employee 2% on a valid work pass |
| SOCSO + EIS | Small additional employer percentages on a published wage table |
| National minimum wage | RM1,700 / month in 2026 (rate under review; not yet replaced) |
| 13th month | Not statutory; contractual if you write it in |
Role salary ranges are not on this page. Open the 2026 salary guide when those figures are published.
Choose a path
In-country employment vs incorporating
A Sdn Bhd is straightforward to open. In-country employment is still the usual path for a first seat or a team that should not wait on company setup.
| In-country employment | Your own entity | |
|---|---|---|
| When to use it | A first Malaysian hire, a shared-service seat, or a plant office that must start before the company exists. | When you want your own Sdn Bhd as the employer. |
| Who employs | A licensed local employer holds the contract. Your managers direct the work. | Your Sdn Bhd employs and remits EPF in its own name. |
| Work passes | The local employer sponsors the pass that matches the role. | Your company sponsors once it is eligible. |
Onboarding
From briefing to first payday
EPF, SOCSO, and EIS registration, and a work pass if needed, set the calendar.
01
Briefing
Role, nationality, start date, and peninsula vs East Malaysia place of work.
02
Contract
Employment Act contract, probation, and the RM4,000 coverage line for certain overtime rules.
03
Statutory funds
EPF, SOCSO, EIS, and work-pass sponsorship if the hire is a foreign national.
04
First payday
Monthly pay and remittances, usually by the 15th of the following month.
05
Convert or close
Move onto your Sdn Bhd, or terminate under the Employment Act.
Compliance
Five points that change the hire
01
RM1,700 is basic wage
Allowances do not top up a sub-minimum basic salary. The national floor is RM1,700 a month in 2026; the government is reviewing it, but it has not been replaced as of this page.
02
EPF for foreigners
From October 2025, foreign employees on a valid work pass generally contribute 2% with a 2% employer match. Do not apply the 12–13% citizen rate to that population.
03
Employment Act coverage widened
The 2022 amendments brought most employees under the Act. Some overtime and hour rules still turn on a RM4,000 monthly-wage line. Classify the role.
04
45-hour week
Maximum ordinary hours are 45 a week. Overtime is paid at statutory multiples for covered employees.
05
Work pass is not optional
A foreign hire needs the pass that matches the job. An Employment Pass threshold change in 2026 affects new and renewal applications — check the category before you offer.
Questions
FAQ
- Can we hire in Malaysia without a Sdn Bhd?
- Yes. In-country employment puts the person on a local contract with EPF, SOCSO, and EIS, while your managers direct the work.
- What is Malaysia's minimum wage in 2026?
- RM1,700 a month nationwide. It became fully enforced in 2025. As of September 2026 the government is reviewing the rate; until a new order is gazetted, RM1,700 remains the floor.
- How much is employer EPF?
- For Malaysian citizens and PRs under 60, 13% of wages up to RM5,000 a month and 12% above, with an 11% employee share. Foreign employees on a work pass are generally on 2% + 2% from October 2025.
- Is a 13th month required in Malaysia?
- No. Write a bonus into the contract if you intend to pay one.
Labour-law detail for Malaysia sits on the hiring guide.
Other markets
Other in-country employment 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)
- Minimum Wages Order — RM1,700 nationwide
- Employees Provident Fund (KWSP) — contribution rates
Plan an in-country hire in Malaysia
Tell us the city, the role, and when they need to start.