Malaysia is a growing economy in Asia and has moved from a focus on agriculture and mining to service and manufacturing. If you are planning on expansion in Malaysia, or would like to simplify operations, there are several payroll and labor factors to consider.

Payroll and Tax Considerations:

  • Minimum wage is determined by the government and the current wage is MYR 1,200 per month for municipal employees, and MYR 1,100 per month for all other employee types
  • Overtime is paid at 150% of their regular pay rate and holiday pay is twice the regular pay rate
  • Severance benefits are available to employees who have worked at least 12 months before dismissal. Employees dismissed due to gross misconduct are not eligible
  • Tax rates are based on income and vary between 0-30%. Non-residents pay a flat rate between 10-30%

HR and Statutory Requirements:

  • Leave is determined by the length of service and ranges from 8-16 days per year
  • To receive sick pay, employees must be examined by a registered medical practitioner
  • The duration of sick leave depends on the length of service with the employer and ranges from 14-60 days
  • Female employees receive at least 90 consecutive days of maternity leave for each pregnancy
  • An employee is not eligible for maternity leave if she has 5 or more living biological children
  • There are no provisions for paternity leave
  • All employers are required to register with the Employees Provident Fund Board. Contributions are made by both employers and employees, at rates tied directly to the wages paid per month
  • There is no fixed retirement age. Employees can begin withdrawing from the pensions funds once they reach 55 years

Holidays in Malaysia

  • February 1 – Chinese Lunar New Year’s Day
  • February 2 – Second Day of Chinese Lunar New Year
  • May 1 – Labour Day
  • May 2 – Labour Day observed
  • May 3 – Hari Raya Puasa
  • May 4 – Hari Raya Puasa Day 2
  • June 6 – The Yang di-Pertuan Agong’s Birthday
  • July 10 – Hari Raya Haji
  • July 30 – Muharram/New Year
  • August 31 – Malaysia’s National Day
  • September 16 – Malaysia Day
  • October 8 – The Prophet Muhammad’s Birthday
  • December 25 – Christmas Day
  • December 26 – Christmas Day observed

Blue Marble has created easy-to-use cloud-based technology with aggregated reporting for real-time access to your payroll across all countries and currencies. We have a hybrid service model with a dedicated US-based team and direct access to in-country experts in Malaysia to help when questions come up. Get your payroll and compliance under control in Malaysia – click here to learn more