Minimum Salary Malaysia

Malaysia has a national minimum wage policy established under the Minimum Wages Order. The current minimum wage rates apply to all employees regardless of nationality (Malaysian or foreign worker), except for domestic servants and apprentices.

**Peninsular Malaysia:** The minimum monthly wage is RM1,500 for most sectors. This rate applies to all employees working in Peninsular Malaysia regardless of the size of the employer.

**Sabah, Sarawak, and Labuan:** The minimum monthly wage is RM1,500 for employees of companies with 5 or more employees. For companies with fewer than 5 employees, the rate may be lower as per the specific state-level minimum wage order.

**Hourly Rate:** For employees paid on an hourly basis, the minimum hourly rate is RM7.21 for Peninsular Malaysia (calculated as RM1,500 ÷ 26 days ÷ 8 hours).

**Daily Rate:** The minimum daily rate is RM57.69 for Peninsular Malaysia (RM1,500 ÷ 26 days).

Employers who pay below the minimum wage can face penalties under the Minimum Wages Order, including fines and legal action. Employees who believe they are being underpaid can file a complaint with the Labour Department (Jabatan Tenaga Kerja).

The minimum wage is reviewed periodically by the National Wages Consultative Council and may be adjusted based on economic conditions, inflation, and living costs.

**Understanding the Legal Framework:** Malaysia's minimum wage policy is governed by the Minimum Wages Order under the National Wages Consultative Council Act 2011, first introduced in 2013. The National Wages Consultative Council (NWCC) reviews rates periodically, comprising employer, employee, and government representatives. The policy applies to all employees except domestic servants, apprentices, and probationary trainees.

**Overtime and Premium Pay:** Minimum wage employees are entitled to overtime at standard Employment Act rates: 1.5x for the first 2 overtime hours, 2x for subsequent hours. Rest day work pays 1.5x (first 4 hours) and 2x (exceeding 4 hours). Public holiday work pays 2x for first 8 hours and 3x thereafter.

**Employer Penalties:** Employers paying below minimum wage face fines and legal action under the Minimum Wages Order. Employees can file complaints with the Labour Department (Jabatan Tenaga Kerja) at no cost.

While the minimum wage sets the gross salary floor, your actual take-home pay is lower after mandatory deductions. Here is the full calculation for RM1,500 minimum wage (single, Category 1):

| Deduction | Calculation | Amount | |---|---|---| | Gross Salary | Monthly wage | RM1,500.00 | | EPF Employee (11%) | RM1,500 x 11% | RM165.00 | | SOCSO Employee (0.5%) | RM1,500 x 0.5% | RM7.50 | | EIS Employee (0.2%) | RM1,500 x 0.2% | RM3.00 | | PCB (Income Tax) | Below taxable threshold | RM0.00 | | **Net Take-Home** | RM1,500 - RM175.50 | **RM1,324.50** |

At RM1,500 gross, total deductions are approximately RM175.50 (11.7%). There is no PCB because the annual taxable income falls below the RM5,000 tax-free threshold after EPF deduction.

**Employer Total Cost:** | Component | Amount | |---|---| | Gross Salary | RM1,500 | | EPF Employer (12%) | RM180 | | SOCSO Employer (2.05%) | RM30.75 | | EIS Employer (0.2%) | RM3.00 | | **Total Employer Cost** | **RM1,713.75** |

The employer pays RM213.75 above the employee's gross salary, an important consideration for small businesses hiring minimum wage workers.

Minimum wage employees are protected by the Employment Act 1955 (revised), which provides additional rights beyond the minimum wage rate.

**Working Hours:** Maximum 8 hours per day or 48 hours per week (6-day week). For 5-day week employees, the maximum is 9 hours per day or 45 hours per week.

**Rest Days and Public Holidays:** Every employee is entitled to at least one rest day per week. Malaysia has approximately 11-13 paid public holidays per year depending on the state. Working on a rest day or public holiday entitles the employee to premium pay rates.

**Annual Leave:** 8 days (less than 2 years service), 12 days (2-5 years), 16 days (5+ years). This is in addition to public holidays.

**Sick Leave:** 14 days outpatient and 60 days hospitalisation leave per year for employees with less than 2 years service. Increases to 18 days outpatient after 2 years. A medical certificate from a registered practitioner is required.

**Maternity Leave:** 60 days paid maternity leave at full salary per child. The government is progressively increasing this towards 90 days. Some employers offer more generous policies as an additional benefit.

**Protection Against Unfair Dismissal:** Employees can file claims with the Industrial Court for free if they believe they were dismissed without just cause. The court can order reinstatement, back pay, or compensation.