Malaysia

Malaysia, strategically located in Southeast Asia, offers a dynamic business environment with a skilled, multilingual workforce and a robust infrastructure. As a member of ASEAN, it serves as a gateway to regional markets. Understanding Malaysia's employment laws, tax obligations, and payroll practices is essential for companies aiming to establish or expand operations in the country.
Contractor Management
EOR
Payroll
Contractor of Record
Currency
Malaysian ringgit (MYR)
Payroll Frequency
Monthly
Employer Taxes
Up to 15.95%

Overview

Population
~33 million
Language
Malaysian
Capital
Kuala Lumpur
Currency
Malaysian ringgit (MYR)
Country code
MYR
Min wage
1,700 MYR/month (urban/rural)
Working hours
9 AM - 5 PM
Weekdays
Monday to Friday (some sectors operate on Saturdays)
Work hours per week
48

Payroll

Salaried Employees
Time-Based Employees
13th Salary

Not mandatory; commonly offered as a bonus

Avg employer tax

Up to 15.95%

Tax Breakdown

Employer Contributions:

Employees Provident Fund (EPF)
12%–13% of monthly salary
Social Security Organization (SOCSO)
1.75%
Employment Insurance System (EIS)
0.2%
Human Resources Development Fund (HRDF)
1% (for companies with ≥10 employees)
Total Estimated Employer Contributions
Approximately 18.95%–22.45% of gross salary

Employee Contributions:

EPF
11% of monthly salary
SOCSO
0.5%
EIS
0.2%
Total Estimated Employee Contributions
Approximately 11.7%–17.2% of gross salary

Personal Income Tax (PIT):

Progressive Rates:

0%
on income up to RM5,000
1%–30%
for higher income brackets

Tax Reliefs:

Available for
EPF contributions, life insurance, medical expenses, and more

VAT

VAT
  • 10% for sales tax and 6% for service tax
Tax Calculation for Malaysia
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Employer cost
Total monthly cost of employment
GBP 9,633
Gross monthly salary costs
GBP 8,334
Estimated taxes and contributions
GBP 8,334
Employee cost
Net monthly salary
GBP 5,137
Gross monthly salary
GBP 8,334
Estimated taxes & social security
GBP 8,334
Employer cost
Total yearly cost of employment
GBP 9,633
Gross yearly salary costs
GBP 8,334
Estimated taxes and contributions
GBP 8,334
Employee cost
Net yearly salary
GBP 5,137
Gross yearly salary
GBP 8,334
Estimated taxes & social security
GBP 8,334
Request a detailed quotation
How it works

Onboarding Process

Onboarding in Malaysia typically includes the following steps to ensure a smooth transition for new hires:

Employment Contract

Must be in writing and include job title, salary, working hours, leave entitlements, and termination conditions

Registration with Authorities

  • Register the employee with the Inland Revenue Board (LHDN) for tax purposes
  • Enroll the employee in EPF, SOCSO, and EIS

Payroll Setup

  • Ensure accurate calculation and withholding of taxes and contributions
  • Provide monthly payslips detailing earnings and deductions

Employee Documentation

Collect copies of identification, tax file number, and bank account details

Workplace Policies

Provide access to company policies, code of conduct, and employee handbook

Pre-boarding

Pre-boarding

Pre-boarding

Key Elements of an Employment Contract in Malaysia
When drafting an employment contract for employees in Malaysia, the following key elements should be included:

Personal Details

Name, contact information, and role of the employee.

Employee Leave Policies

Sick days
  • 14–22 days per year, depending on tenure
  • Hospitalization leave: Up to 60 days per year

Maternity leave
  • 98 consecutive days with full pay
  • Applicable to all female employees
Paternity leave
  • 7 consecutive days with full pay
  • Applicable to married male employees

Other Leaves:

  • Bereavement, marriage, and study leaves are provided at the employer's discretion
Annual Leave
  • Minimum of 8 days per year for employees with 1–2 years of service
  • Increases with tenure
  • Many companies offer 14–20 days as standard
9 Public holidays in Malaysia

Note: Additional state-specific holidays apply.

1st
New Year's Day
29th
Chinese New Year
30th
Chinese New Year
1st
Labor Day
12th
Wesak Day
2nd
Yang di-Pertuan Agong's Birthday
31st
National Day
16th
Malaysia Day
20th
Deepavali (except Sarawak)
25th
Christmas Day
  • 01-Jan  New  Year's Day    
  • 14-Jan  Birthday of Yang  di-Pertuan Besar    
  • 28-Jan  Thaipusam        
  • 01-Feb  Federal Territory  Day    
  • 12-Feb  Chinese Lunar New  Year's Day    
  • 13-Feb  Second day of  Chinese Lunar New Year    
  • 13-Feb  Chinese Lunar New  Year Holiday    
  • 14-Feb  Valentine's Day        
  • 04-Mar  Anniversary of the  Coronation of the Sultan of Terengganu    
  • 11-Mar  Isra and Mi'raj
  • 20-Mar  March Equinox    
  • 23-Mar  Birthday of the  Sultan of Johor        
  • 02-Apr  Good Friday    
  • 04-Apr  Easter Sunday    
  • 13-Apr  First Day of Ramadan    
  • 15-Apr  Declaration of  Malacca as Historical City    
  • 26-Apr  Birthday of the  Sultan of Terengganu    
  • 29-Apr  Nuzul Al-Quran        
  • 01-May  Labour Day    
  • 13-May  Hari Raya Puasa    
  • 14-May  Hari Raya Puasa Day  2    
  • 22-May  Pahang State Holiday    
  • 26-May  Wesak Day    
  • 30-May  Harvest Festival    
  • 31-May  Harvest Festival  observed    
  • 31-May  Second Day of  Harvest Festival        
  • 01-Jun  Gawai Dayak    
  • 02-Jun  Gawai Dayak Holiday    
  • 07-Jun  The Yang di-Pertuan  Agong's Birthday    
  • 20-Jun  Sultan of Kedah's  Birthday  
  • 21-Jun  June Solstice        
  • 07-Jul  George Town World  Heritage City Day    
  • 10-Jul  Penang Governor's  Birthday    
  • 17-Jul  Birthday of the Raja  of Perlis    
  • 19-Jul  Day of Arafat    
  • 20-Jul  Hari Raya Haji    
  • 20-Jul  Hari Raya Haji  holiday    
  • 21-Jul  Hari Raya Haji (Day  2)    
  • 22-Jul  Sarawak Independence  Day    
  • 30-Jul  Birthday of the  Sultan of Pahang        
  • 10-Aug  Muharram/New Year    
  • 24-Aug  Birthday of the  Governor of Malacca    
  • 31-Aug  Malaysia's National  Day        
  • 13-Sep  Almarhum Sultan  Iskandar Hol Day    
  • 16-Sep  Malaysia Day    
  • 23-Sep  September Equinox        
  • 02-Oct  Birthday of the  Governor of Sabah    
  • 09-Oct  Birthday of the  Governor of Sarawak    
  • 19-Oct  The Prophet  Muhammad's Birthday (Tentative Date)        
  • 04-Nov  Diwali/Deepavali    
  • 05-Nov  Birthday of the  Sultan of Perak    
  • 11-Nov  Birthday of the  Sultan of Kelantan    
  • 12-Nov  Birthday of the  Sultan of Kelantan (Day 2)        
  • 11-Dec  Birthday of the  Sultan of Selangor    
  • 21-Dec  December Solstice    
  • 24-Dec  Christmas Eve    
  • 24-Dec  Christmas Eve    
  • 25-Dec  Christmas Day    
  • 31-Dec  New Year's Eve

Termination Process

Permissible Grounds

  • Misconduct
  • Redundancy
  • Poor performance
  • Mutual agreement

Notice Period

  • 4 weeks for employees with less than 2 years of service
  • 6 weeks for 2–5 years of service
  • 8 weeks for more than 5 years of service

Severance Pay

  • 10 days' wages per year of service for 1–2 years
  • 15 days' wages per year for 2–5 years
  • 20 days' wages per year for over 5 years

Probation Period

  • Typically 3–6 months
  • Shorter notice periods apply during probation

Personal Details

Name, contact information, and role of the employee.

_'s Booming Remote Workforce

Challenges of Remote Hiring in _

Simplifying Remote Hiring in _ with RemotePass 

Grow Your Team in Malaysia
with RemotePass

Malaysia offers a conducive environment for business growth, with its strategic location, skilled workforce, and supportive government policies. RemotePass simplifies the process of hiring and managing employees in Malaysia, ensuring compliance with local laws, handling payroll and benefits, and providing a seamless experience for both employers and employees.

Building and expanding a global workforce is seamless with RemotePass. Our platform simplifies the complexities of hiring, payroll, and compliance across over 150 countries, including Malaysia.

With RemotePass, you can quickly onboard international employees, manage payroll, ensure legal compliance, and provide competitive benefits—all from one place. Focus on growing your business while we handle the HR and legal intricacies.

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Malaysia

Malaysia, strategically located in Southeast Asia, offers a dynamic business environment with a skilled, multilingual workforce and a robust infrastructure. As a member of ASEAN, it serves as a gateway to regional markets. Understanding Malaysia's employment laws, tax obligations, and payroll practices is essential for companies aiming to establish or expand operations in the country.
Contractor Management
EOR
Payroll
Contractor of Record
العملة
Malaysian ringgit (MYR)
تردد الرواتب
Monthly
ضرائب أصحاب العمل
Up to 15.95%

نظرة عامة

التركيبة السكانية
~33 million
اللغة
Malaysian
العاصمة
Kuala Lumpur
العملة
Malaysian ringgit (MYR)
رمز الاتصال الدولي
MYR
الحد الأدنى للأجور
1,700 MYR/month (urban/rural)
ساعات العمل
9 AM - 5 PM
أيام الأسبوع
Monday to Friday (some sectors operate on Saturdays)
ساعات العمل اسبوعيا
48

الرواتب

الموظفون برواتب ثابتة
الموظفون بنظام الأجر الزمني
13th Salary

Not mandatory; commonly offered as a bonus

متوسط ​​ضريبة صاحب العمل

Up to 15.95%

تحصيل الضرائب

Employer Contributions:

Employees Provident Fund (EPF)
12%–13% of monthly salary
Social Security Organization (SOCSO)
1.75%
Employment Insurance System (EIS)
0.2%
Human Resources Development Fund (HRDF)
1% (for companies with ≥10 employees)
Total Estimated Employer Contributions
Approximately 18.95%–22.45% of gross salary

Employee Contributions:

EPF
11% of monthly salary
SOCSO
0.5%
EIS
0.2%
Total Estimated Employee Contributions
Approximately 11.7%–17.2% of gross salary

Personal Income Tax (PIT):

Progressive Rates:

0%
on income up to RM5,000
1%–30%
for higher income brackets

Tax Reliefs:

Available for
EPF contributions, life insurance, medical expenses, and more

ضريبة القيمة المضافة

ضريبة القيمة المضافة
  • 10% for sales tax and 6% for service tax
حساب الضريبة في Malaysia
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تكلفة صاحب العمل
إجمالي تكلفة التوظيف الشهرية
GBP 9,633
إجمالي تكاليف الراتب الشهري
GBP 8,334
الضرائب والمساهمات المقدرة
GBP 8,334
تكلفة الموظف
صافي الراتب الشهري

GBP 5,137
الراتب الشهري الإجمالي
GBP 8,334
الضرائب المقدرة والضمان الاجتماعي
GBP 8,334
تكلفة صاحب العمل
إجمالي تكلفة التوظيف السنوية
GBP 9,633
إجمالي تكاليف الرواتب السنوية
GBP 8,334
الضرائب والمساهمات المقدرة
GBP 8,334
تكلفة الموظف
صافي الراتب السنوي

GBP 5,137
الراتب السنوي الإجمالي
GBP 8,334
الضرائب المقدرة والضمان الاجتماعي
GBP 8,334
اطلب عرض أسعار تفصيلي
كيف تعمل الخدمة

عملية الانضمام

تشمل عملية التوظيف في Malaysia عادة الخطوات التالية لضمان انتقال سلس للموظفين الجدد:

Employment Contract

Must be in writing and include job title, salary, working hours, leave entitlements, and termination conditions

Registration with Authorities

  • Register the employee with the Inland Revenue Board (LHDN) for tax purposes
  • Enroll the employee in EPF, SOCSO, and EIS

Payroll Setup

  • Ensure accurate calculation and withholding of taxes and contributions
  • Provide monthly payslips detailing earnings and deductions

Employee Documentation

Collect copies of identification, tax file number, and bank account details

Workplace Policies

Provide access to company policies, code of conduct, and employee handbook

Pre-boarding

Pre-boarding

Pre-boarding

العناصر الأساسية في عقد العمل في Malaysia
عند إعداد عقد عمل للموظفين في Malaysia يجب تضمين العناصر الأساسية التالية:

Personal Details

Name, contact information, and role of the employee.

سياسات إجازات الموظفين

الإجازات المرضية
  • 14–22 days per year, depending on tenure
  • Hospitalization leave: Up to 60 days per year

إجازة الأمومة
  • 98 consecutive days with full pay
  • Applicable to all female employees
إجازة الأبوة
  • 7 consecutive days with full pay
  • Applicable to married male employees

Other Leaves:

  • Bereavement, marriage, and study leaves are provided at the employer's discretion
Annual Leave
  • Minimum of 8 days per year for employees with 1–2 years of service
  • Increases with tenure
  • Many companies offer 14–20 days as standard
9 عطلات رسمية في Malaysia

Note: Additional state-specific holidays apply.

1st
New Year's Day
29th
Chinese New Year
30th
Chinese New Year
1st
Labor Day
12th
Wesak Day
2nd
Yang di-Pertuan Agong's Birthday
31st
National Day
16th
Malaysia Day
20th
Deepavali (except Sarawak)
25th
Christmas Day
  • 01-Jan  New  Year's Day    
  • 14-Jan  Birthday of Yang  di-Pertuan Besar    
  • 28-Jan  Thaipusam        
  • 01-Feb  Federal Territory  Day    
  • 12-Feb  Chinese Lunar New  Year's Day    
  • 13-Feb  Second day of  Chinese Lunar New Year    
  • 13-Feb  Chinese Lunar New  Year Holiday    
  • 14-Feb  Valentine's Day        
  • 04-Mar  Anniversary of the  Coronation of the Sultan of Terengganu    
  • 11-Mar  Isra and Mi'raj
  • 20-Mar  March Equinox    
  • 23-Mar  Birthday of the  Sultan of Johor        
  • 02-Apr  Good Friday    
  • 04-Apr  Easter Sunday    
  • 13-Apr  First Day of Ramadan    
  • 15-Apr  Declaration of  Malacca as Historical City    
  • 26-Apr  Birthday of the  Sultan of Terengganu    
  • 29-Apr  Nuzul Al-Quran        
  • 01-May  Labour Day    
  • 13-May  Hari Raya Puasa    
  • 14-May  Hari Raya Puasa Day  2    
  • 22-May  Pahang State Holiday    
  • 26-May  Wesak Day    
  • 30-May  Harvest Festival    
  • 31-May  Harvest Festival  observed    
  • 31-May  Second Day of  Harvest Festival        
  • 01-Jun  Gawai Dayak    
  • 02-Jun  Gawai Dayak Holiday    
  • 07-Jun  The Yang di-Pertuan  Agong's Birthday    
  • 20-Jun  Sultan of Kedah's  Birthday  
  • 21-Jun  June Solstice        
  • 07-Jul  George Town World  Heritage City Day    
  • 10-Jul  Penang Governor's  Birthday    
  • 17-Jul  Birthday of the Raja  of Perlis    
  • 19-Jul  Day of Arafat    
  • 20-Jul  Hari Raya Haji    
  • 20-Jul  Hari Raya Haji  holiday    
  • 21-Jul  Hari Raya Haji (Day  2)    
  • 22-Jul  Sarawak Independence  Day    
  • 30-Jul  Birthday of the  Sultan of Pahang        
  • 10-Aug  Muharram/New Year    
  • 24-Aug  Birthday of the  Governor of Malacca    
  • 31-Aug  Malaysia's National  Day        
  • 13-Sep  Almarhum Sultan  Iskandar Hol Day    
  • 16-Sep  Malaysia Day    
  • 23-Sep  September Equinox        
  • 02-Oct  Birthday of the  Governor of Sabah    
  • 09-Oct  Birthday of the  Governor of Sarawak    
  • 19-Oct  The Prophet  Muhammad's Birthday (Tentative Date)        
  • 04-Nov  Diwali/Deepavali    
  • 05-Nov  Birthday of the  Sultan of Perak    
  • 11-Nov  Birthday of the  Sultan of Kelantan    
  • 12-Nov  Birthday of the  Sultan of Kelantan (Day 2)        
  • 11-Dec  Birthday of the  Sultan of Selangor    
  • 21-Dec  December Solstice    
  • 24-Dec  Christmas Eve    
  • 24-Dec  Christmas Eve    
  • 25-Dec  Christmas Day    
  • 31-Dec  New Year's Eve

عملية إنهاء العقود

Permissible Grounds

  • Misconduct
  • Redundancy
  • Poor performance
  • Mutual agreement

Notice Period

  • 4 weeks for employees with less than 2 years of service
  • 6 weeks for 2–5 years of service
  • 8 weeks for more than 5 years of service

Severance Pay

  • 10 days' wages per year of service for 1–2 years
  • 15 days' wages per year for 2–5 years
  • 20 days' wages per year for over 5 years

Probation Period

  • Typically 3–6 months
  • Shorter notice periods apply during probation

Personal Details

Name, contact information, and role of the employee.

_'s Booming Remote Workforce

Challenges of Remote Hiring in _

Simplifying Remote Hiring in _ with RemotePass 

نمِّ فريقك في Malaysia
مع ريموت باس

Malaysia offers a conducive environment for business growth, with its strategic location, skilled workforce, and supportive government policies. RemotePass simplifies the process of hiring and managing employees in Malaysia, ensuring compliance with local laws, handling payroll and benefits, and providing a seamless experience for both employers and employees.

يصبح بناء فريق عالمي وتوسيعه مهمة سهلة مع ريموت باس. منصتنا تبسّط تعقيدات التوظيف والرواتب والامتثال القانوني في أكثر من 150 دولة، بما في ذلك Malaysia.

مع ريموت باس، يمكنك ضم الموظفين الدوليين بسرعة، وإدارة الرواتب، وضمان الامتثال القانوني، وتقديم مزايا تنافسية — كل ذلك من مكان واحد. ركّز على تنمية أعمالك، ودع المهام الإدارية والقانونية علينا.

تجربة مجانية لمدة 7 أيام

لا حاجة لبطاقة ائتمان

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