Currency
Malaysian Ringgit (MYR)
EOR IN Malaysia
The easiest way to Hire and Manage in Malaysia
Swivelt will take care of payroll, benefits, taxes, compliance, making it easier than ever to expand and manage your team in Malaysia
GET STARTED
EXPAND YOUR BUSINESS IN Asia - Pacific
A guide to employing and growing your team in Malaysia
Fast and compliant market entry. Hire top local talent without the need for a legal entity
Malaysia is a regional leader in Southeast Asia for remote hiring, offering a digitally fluent and English-speaking workforce. Its economy is diversified across manufacturing, services, and a growing digital sector supported by initiatives like MyDIGITAL. The labor market is primarily governed by the Employment Act 1955, which was significantly updated in recent years to enhance worker protections. As of 2026, the national minimum wage in Malaysia is RM 1,700 per month. A unique aspect of Malaysian payroll is the inclusion of the HRD Levy, a mandatory payment for most industries to support the upskilling of the national workforce.
Employer Contributions
Employees Provident Fund (EPF): 12%–13% (depending on salary level)
Social Security Organization (SOCSO): ~1.75%
Employment Insurance System (EIS): 0.2%
Total Employer Contribution: ~14% to 15%
Employee Payroll Taxes
Employees Provident Fund (EPF): 11%
SOCSO: ~0.5%
EIS: 0.2%
Total Employee Contribution: ~11.5% to 12%
Employee Income Tax Rates
Taxable income is calculated after mandatory EPF contributions and specific reliefs (YA 2025/2026):
First RM 5,000: 0%
RM 5,001 – RM 20,000: 1%
RM 20,001 – RM 35,000: 3%
RM 35,001 – RM 50,000: 6%
RM 50,001 – RM 70,000: 11%
RM 70,001 – RM 100,000: 19%
RM 100,001 – RM 400,000: 25%
RM 400,001 – RM 600,000: 26%
RM 600,001 – RM 2,000,000: 28%
Above RM 2,000,000: 30%
Statutory Leave
In Malaysia, annual leave is based on tenure: 8 days for less than 2 years of service, 12 days for 2–5 years, and 16 days for more than 5 years. Employees are entitled to a minimum of 11 public holidays per year, with 5 being compulsory, and the others depending on the state. Unused leave carry-forward is subject to company policy.
Pregnancy and Maternity Leave
In Malaysia, female employees are entitled to 98 days of maternity leave, paid at full salary. This entitlement applies regardless of the employee’s wage level.
Paternity Leave
In Malaysia, male employees are entitled to 7 days of paid paternity leave, applicable to married employees in the private sector, subject to eligibility conditions.
Other leaves
In Malaysia, statutory parental leave is limited, with benefits primarily covered under maternity and paternity provisions. Additional leave types include sick leave (14–22 days for non-hospitalization, based on tenure, and up to 60 days including hospitalization), bereavement leave (typically 2–3 days based on company policy), and marriage leave (commonly 2–3 days based on company policy). Work injury leave is covered under SOCSO (Social Security Organization).
Termination Process
Termination must follow the Employment Act and Industrial Relations Act. Employers must have just cause and excuse for dismissal. Employees can challenge unfair dismissal through the Industrial Court.
Severance (termination benefits) is payable based on tenure under the Employment (Termination and Lay-Off Benefits) Regulations.
Notice Period
Less than 2 years: 4 weeks
2–5 years: 6 weeks
More than 5 years: 8 weeks
Probation Period
Not legally mandated
Common practice: 3 to 6 months