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Overview
Capital
Kuala Lumpur Currency
Ringgit Date Format
dd/mm/yyyy
Public holidays calendar
Taxes
Employer
Employer Payroll Tax
12.00% - 13.00%
Provident Fund (employees under the age of 60)
4.0%-6.5%
Provident Fund (employees over the age of 60)
1.75%
Social Security (SOCSO)
0.2%
Employment Insurance (EIS)
1.0%
Human Resource Development Fund (over 10 employees)
Up to 15.95%
Total Employment Cost
Employee
Employee Payroll Taxes
9.0%
Provident Fund (employees under the age of 60)
0.0%-5.5%
Provident Fund (employees over the age of 60)
0.50%
Social Security (SOCSO)
0.2%
Employment Insurance (EIS)
Up to 9.70%
Total Employee Cost
Employee Income Tax
0.00%
Up to 5,000
1.00%
5,000 - 20,0000
3.00%
20,000 - 35,000
8.00%
35,000 - 50,000
13.00%
50,000 - 70,000
21.00%
70,000 - 100,000
24.00%
100,000 - 250,000
24.50%
250,000 - 400,000
25.00%
400,000 - 600,000
26.00%
600,000 - 1,000,000
28.00%
1,000,000 - 2,000,000
30.00%
2,000,000 and over
Employer Taxes
3 HIGHEST
3 LOWEST
China
Brazil
Belarus
Malaysia
South Africa
Georgia
Macedonia
41.12%
36.8%
34%
15.95%
2%
2%
0%
Employee taxes
3 HIGHEST
3 LOWEST
Romania
Macedonia
Netherlands
Malaysia
Georgia
Belarus
Ukraine
45%
28%
27.65%
9.7%
2%
1%
0%
Minimum Wage
General
RM1,200 per month in urban areas, RM1,100 per month in rural areas.
Minimum wage (per month)
$4000
$2491
$2391
$257
$36.80
$22
$2.33
Geneva
Australia
Luxembourg
Malaysia
Angola
Uzbekistan
Venezuela
3 HIGHEST
3 LOWEST
Payroll
Payroll Cycle
Salaries are usually paid monthly. Salaries must be paid within 7 days of the following month.
13th Salary
It is only common practice in the manufacturing industry to pay salaries in 13 installments.
Working Hours
General
Working hours are limited to 48 hours per week. The most common office practice is 45 hours per week (9 am-6 pm, Mon-Fri)
Overtime
The minimum guideline for overtime pay in the Employment Act is:
- Extra hours worked on a normal working day – 150%
- Rest days – 200%
- Public holidays – 300%
The Employment Act only covers manual workers and non-manual workers with a monthly salary that does not exceed RM 2,000. However, these guidelines are often used as guidance in Common Law cases for other employees.
Leave
Paid Time Off
- Up to two years of employment: 8 days per year
- Between 2 to 5 years: 12 days per year
- 5 plus years: 16 days per year
Vacation days
Public holidays
3 HIGHEST
3 LOWEST
Brazil
Peru
Georgia
Malaysia
Malaysia
China
Federal
43
42
41
14
14
12
10
Public Holidays
There are 6 compulsory public holidays and 10 optional public holidays (employer should choose at least 5 of these but it is common for offices to close on all). State day is a compulsory public holiday and the day varies from state to state. All other holidays are national.
Sick Days
- Up to two years of employment: 14 days per year
- Between 2 to 5 years: 18 days per year
- 5 plus years: 22 days per year
Maternity Leave
Female employees are covered in full by the employer for a least 60 days if they have been employed in the last four months and have worked for the same employer for at least 90 days in the 9 months prior to childbirth.
Leave will soon be increased to 90 days.
PAID MATERNITY LEAVE (DAYS)
410
365
365
60
45
30
0
Bulgaria
Serbia
Albania
Malaysia
United Arab Emirates
Tunisia
Federal
3 HIGHEST
3 LOWEST
Paternity Leave
No specific law requires paternity but some compaabies do provide it.
Parental Leave
No specific laws.
Termination
Termination Process
Employees can be dismissed for misconduct or poor work performance. Termination is subject to employee challenge for unfair dismissal. It is recommended that proper procedure is followed (warning, time and guidance to improve performance) in order to reduce the likelihood of an unfair dismissal claim.
Notice Period
No set amount but should be equitable between employee and employer
Severance Pay
Minimum termination benefits for employees who are fired for reasons not connected to their conduct are as follows:
- Up to two years of employment: 10 days per year
- Between 2 to 5 years: 15 days per year
- 5 plus years: 20 days per year
Probation Period
Probation is optional. The common practice is to have 1-3 months probations. The Employment Act does not distinguish between employees on probation and permanent employees.
VAT
General
The VAT is 6% standard rate.
Questions & Answers
Who is covered by the employee act or are all employees covered?
Hi Nor, thank you for your question. Not all employees are covered by the Employment Act. People who earn less than 2,000 Ringitt per month, manual laborers (regardless of income level), and foreign workers who are legally in Malaysia are covered. Hope this helps!