Basic Facts

Malaysia, located in Southeast Asia, is separated by the South China Sea into two non-contiguous regions: the Peninsula Malaysia region bordering Thailand (i.e. West Malaysia) and the Malaysia Borneo region bordering Indonesia and Brunei (i.e. East Malaysia). In the last decade, as it moved up the industry value chain from an oil and gas exporter, Malaysia has emerged as an attractive regional hub for services including financial services, information, and communications technology (ICT), and logistics sectors.


*Please note that the official currency is the currency of remuneration when employed through WorkMotion in Malaysia.

Capital :
Kuala Lumpur
Currency :
Ringgit (MYR, RM)
Languages spoken :
Bahasa Malay
Population :
32.7 million (2021 est.)
Minimum wage 2023 :
MYR 1,500 monthly
Cost of Living index :
$$ (93 of 139 countries)
Payroll Frequency :
VAT - standard rate :
GDP - real growth rate :
3% (2021 est.)

Statutory Holidays

The national holidays mentioned below are valid for the year 2024.

Holiday Name
Extra Information
January 1
New Year’s Day
National except Johor, Kedah, Kelantan, Perlis & Terengganu
January 14-15
YDPB Negeri Sembilan's Birthday
January 25
Johor, Kedah, Kuala Lumpur, Negeri Sembilan, Penang, Perak, Putrajaya & Selangor
February 10-12
Chinese New Year
March 28
Nuzul Al-Quran
Movable - National except Johor, Kedah, Melaka, Negeri Sembilan, Sabah & Sarawak
April 10-11
Hari Raya Aidilfitri
May 1
Labor Day
National except Johor, Kedah, Kelantan & Terengganu
May 22
Wesak Day
National except Johor, Kedah, Kelantan & Terengganu
June 3
Agong's Birthday
Movable - First Monday of June
June 17
Hari Raya Haji
July 7
Awal Muharram
Movable - National except Johor
July 8
Awal Muharram Holiday
August 31
Merdeka Day
September 16
Prophet Muhammad's Birthday
Movable - National except Johor, Kedah, Kelantan & Terengganu
September 16-17
Malaysia Day
October 31
Movable - National except Sarawak
December 25

Contract Sharing Time

The approximate time for sharing the contract with an employee in Malaysia is 6 business days assuming no special requests or changes to our standard employment contract. Any such requests or changes would need to undergo internal and external review, directly leading to a time delay.

NOTE: This number is subject to change and is only an estimation of the Contract Sharing Time. The estimated Contract Sharing Time begins from the moment that WorkMotion has received all required information from both the client and the employee.

What You Need To Know

  • There is no paternity leave in Malaysia.
  • There is no provision for a statutory bonus in Malaysia.
  • Amended OSHA covers employees working from home.
  • The Employment Amendment Act now allows an employee to apply in writing to their employer for a flexible working arrangement to vary their hours, days, or place of work

Labor Conditions

Working Hours

The Malaysia workweek is 40 hours, with a standard workday of eight hours. The maximum number of work hours is 45 hours in a week. Workers are entitled to one rest day for every six days worked, and cannot be compelled to work on that rest day.



Work hours should not exceed more than 45 per week. If employers request extra hours, they must pay 1.5 times the employee’s regular wages.

The minimum guidelines for overtime pay are:

  • Extra hours worked on a normal working day – 150%;
  • Rest days – 200%;
  • Public holidays – 300%.


Probation Period

There is no law governing the length of the probationary period. It depends entirely on the employment contract agreed upon between the employer and the employee. The duration period for probation is usually from a period of three to 12 months.


Termination Notice Period

The length of such notice is the same for both employer and employee and is determined by a provision made in writing for such notice in the terms of the contract of service, or, in the absence of such provision in writing, and should not be less than:

Service PeriodNotice Period
Less than 2 years of serviceMinimum 4 weeks
2 years or more but less than 5 years of serviceMinimum 6 weeks
5 years of service or moreMinimum 8 weeks

Leave / Time Off

Annual Leave


Employment DurationAnnual Leave
Less than 2 years8 days
2 years or more but less than 5 years12 days
Over 5 years16 days


If the employee has not completed 12 months of continuous service with the same employer during the year in which their contract of service terminates, their entitlement to paid annual leave should be in direct proportion to the number of completed months of service.

Sick Leave

Employees who are covered by the Employment Act of 1955 are known as EA Employees. 

Employment ConditionsLeave Duration Annually
Less than 2 years of service14 days
More than 2 years but less than 5 years of service18 days
More than 5 years of service22 days
If hospitalization is necessary, as may be certified by a registered medical practitioner or medical officer60 days




Parental Leave

Maternity Leave

Maternity leave is 98 consecutive days. Female employees are entitled to a maternity allowance. Maternity leave may commence anytime within 30 days prior to the expected birth date, but cannot be later than the day immediately following the birth.


Paternity Leave

A married male employee is entitled to paternity leave from his employer if:

  • He has been employed by the same employer at least 12 months immediately before the commencement of such paternity leave; and
  • He has notified his employer of the pregnancy of his spouse at least 30 days from the expected confinement or as early as possible after the birth.

A married male employee is entitled to a paid paternity leave at his ordinary rate of pay for a period of seven consecutive days in respect of each confinement. The paternity leave is restricted to five confinements irrespective of the number of spouses.

Other Types of Paid Leave

There are no other statutory provisions for paid leave in Malaysia.

Unpaid Leave

Wages are not payable to or recoverable by any employee from their employer:

  • For or on account of the term of any sentence of imprisonment undergone by them; or
  • For any period spent by them in custody; or
  • For or on account of any period spent by them in going to or returning from prison; or
  • Other places of custody; or
  • For or on account of any period spent by them in going to, attending before or returning from a court otherwise than as a witness on their employer’s behalf.

Statutory Benefits

Social security benefits such as disability, retirement, medical payments, and survivors’ benefits are provided by the Social Security Organization and the Employees Provident Fund (EPF). 

Employers are required to pay monthly contributions for each eligible employee according to the rate specified under the Employees’ Social Security Act, 1969. These contributions are divided into two types, namely:

  • Category 1: Below 60 years of age for Employment Injury Scheme and the Invalidity Scheme;
  • Category 2: 60 years and above.


Employer Contributions for Malaysian Citizens and Permanent Residents (Mandatory)
Contribution ItemsCategory 1: Below Age 60Category 2: Above Age 60
Employment Injury Scheme and the Invalidity Scheme
  • 1.75%
  • 1.25%
Employment Insurance System*
  • 0.2%
Employee Provident Fund
  • Salary below MYR 5000 – 13%
  • Salary above MYR 5000 – 12%
  • Non-Malaysians (registered as members after August 1998) – MYR5
  • Salary below MYR 5000 – 6.5%**
  • Salary above MYR 5000 – 6%**
  • Non-Malaysians (registered as members after August 1998) – MYR5
  • No salary limit – 4%

*All employees 18 to 60 years have to contribute. Employees aged 57 and above who have no prior contributions before the age of 57 are exempt. Contribution rates are capped at an assumed monthly salary of MYR 4000.

** Only for Permanent Residents and Non-Malaysians (registered as members before August 1998).

Health Insurance

Malaysia has compulsory universal healthcare which is funded through payroll taxes and the general budget. Private health care is also available. Patients pay small fees for their medical appointments. While there is no public health insurance program for expatriates in Malaysia to join, there are some options for international citizens living in Malaysia long term. 

Other Insurances

Accident Insurance


Employers pay a 1.75% contribution for employees under 60 years of age and 1.25% for above 60 years old beneficiaries.

Employment Injury Scheme provides protection to an employee against accident or an occupational disease arising out of and in the course of their employment.

Unemployment Insurance


The Employment Insurance System (EIS) provides certain benefits and a re-employment placement program for insured persons in the event of loss of employment to promote active labor market policies. The EIS covers only Malaysian citizens and permanent residents.

Both the employer and employee make monthly contributions of 0.2% of the employee’s wage but are restricted to a maximum of MYR 7.90 for employer and employee, respectively.

Public Pension

The minimum retirement age for employees in Malaysia is 60, although employment contracts may stipulate an earlier age. In fact, retirement ages must be included in all labor contracts if an employer wants to avoid being responsible for paying severance to elderly personnel.

Contributions are as follows:

  • Up to age 54: the employer contributes 12% of an employee’s wages, and the employee contributes 11%
  • From 55 to 75: the employer contributes 6% and the employee contributes 5.5%

In Malaysia, pensions are covered by the Employees Provident Fund (Kumpulan Wang Simpanan Pekerja, EPF). Apart from providing a pension, contributors can withdraw money for certain reasons; for example, to cover medical expenses or to purchase a home. 

Other Statutory Benefits

Human Resources Development Fund (HRDF)

Employers with 10 or more Malaysian employees have to compulsorily register with HRDF while employers with fewer employees can choose to do so. The contribution rate is 1% of the monthly wages (Total wages or basic salaries+fixed allowances) of each of their Malaysian employees (0.5% for employers with five to nine employees, who choose to join). HRDF schemes are divided into two categories; HRDF Levy and Government Special Fund. HRDF Levy is a fund that is deposited by employers on a monthly basis. They can apply for schemes provided by HRDF to attend any programs recognized by HRDF.

The Government Special Fund is an allocation provided by the Government to benefit employers who apply for related schemes offered by HRDF.


The information contained in this Country Guide is provided for informational purposes only and should not be construed as legal advice on any subject matter. The contents of this Country Guide contain general information and may not reflect current legal developments or address your situation. You should not act or refrain from acting on the basis of any content included in this Country Guide without seeking the advice or representation of a licensed attorney. WorkMotion Software GmbH disclaims all liability for actions you take or fail to take based on any content included in this Country Guide.


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