Malaysian Ringgit (MYR)
Hire employees in Malaysia. No entity needed.
Usually, to hire in Malaysia, your business needs an entity. That means a local office, an address registered as a subsidiary, and an account with a local bank. All of this, plus navigating regional benefits, payroll, tax, and HR laws, can take months.
Malaysia also treats contractors differently than full-time employees, so misclassifying a contractor could lead to fines. Deel lets you hire employees in Malaysia quickly, easily, and compliantly. We even automate tax document collection, payroll, benefits, and more.
All the necessary benefits for Malaysia
built right in
Deel allows you to provide localized benefits for employees in Malaysia within minutes. All in one manageable online dashboard.
- Employees Provident Fund Contribution
- Training Fund
- Unemployment Insurance
- Private Healthcare - Unisure (optional)
- Private Healthcare - Allianz (optional)
Our quickstart guide to hiring in Malaysia
Navigate the tabs below to learn everything you need to know about hiring an employee in Malaysia
Minimum Wage Requirements
Individual Income Tax
The individual income tax ranges from 0% to 30%. Income tax is calculated according to progressive rates. Multiple additional factors may impact overall rates such as the household status and the number of children.
|Gross Annual Income||Tax Rate (%)|
|Up to MYR 5,000||0|
|Up to MYR 20,000||1%|
|Up to MYR 35,000||3%|
|Up to MYR 50,000||8%|
|Up to MYR 70,000||11%|
|Up to MYR 100,000||19%|
|Up to MYR 250,000||24%|
|Up to MYR 400,000||25%|
|Up to MYR 600,000||25%|
|Up to MYR 1,000,000||26%|
|Up to MYR 2,000,000||28%|
- Employees Provident Fund (EPF):
- 12% for salaries lower than MYR 5,000
- 13% for salaries higher than MYR 5,000
- Employees’ Social Security (SOCSO) - from MYR 23.65 to MYR 86.65 depending on the employee’s salary
- Employment Insurance System (EIS): MYR 2.70 to MYR 9.90 depending on the employee’s salary
- Human Resources Development Fund (HRDF) - 1.00%
Overtime Pay & Maximum Hours
For employees earning over MYR 2,000 per month, overtime is not required and must be agreed upon between the employer and employee. Employees can work a maximum of 104 hours of overtime a month. For all additional hours, employees are paid 150% of their hourly rate. Weekends employees are paid at 200% of their hourly rate and for public holidays employees are paid at 300% of their hourly rate.
Standard working hours are eight hours per day, 40 hours per week. The standard workweek is from Monday to Friday.
- Less than two years of employment - 14 days of sick leave
- Between two and five years of employment - 18 days of sick leave
- More than five years of employment - 22 days of sick leave
Terminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.
Terminations in Malaysia can be complex. There is no at-will termination in Malaysia for employers and termination must be done for just cause.
Compliant terminations include:
- Voluntarily by the employee
- By mutual agreement
- By the expiration of the contract
- Unilaterally by the employer based on:
- Probation period
- Objective grounds
- Disciplinary dismissal
- Performance due to unsuitability for the job
- If the length of service is less than two years, four weeks
- If the length of service is two years or more, but less than five years, six weeks notice
- If the length of service is five years or more, eight weeks notice
Severance for Employees
In Malaysia, severance is generally not required, unless the employee earns less than 4,000 RM per month.
To protect you from unforeseen financial risks arising from terminations, Deel applies a Severance Accrual to all employment agreements in this country. Deel has extensive expertise in managing litigation risk globally and our Severance Accrual calculation is based on the prevailing common-law or statutory entitlements and local best practices. In the event your employee resigns or is not entitled to severance, all unused amounts will be returned to you.
Paid Time Off
Malaysia celebrates 5 national public holidays. However, every employee is entitled to the 11 gazetted public holidays and any day specified as a public holiday under Section 8 of the Holidays Act under Section 60D of the Employment Act. The 11 days include 5 compulsory days (listed below) and 6 elective days (employer discretion from the list on the government website). There are also multiple regional and unofficial holidays that can be granted at the discretion of the employer. For more information about the regional holidays in 2023, refer to the Malaysian government website.
- Labor Day: May 1
- Agong’s Birthday: June 5
- Merdeka (Independence) Day: August 31
- Malaysia Day: September 16
- State Ruler’s Birthday
Employment Contract Details
A contract must include:
- Position offered
- Duration of the contract
- Place of work
- Basic wage & pay date
- Working hours and days
- Other benefits (if any)
- Overtime (if any)
- Annual leave
- Termination clause
- Sick leave and hospitalization leave
- Rest day
- Probationary period
- Notice period
- Duties and responsibilities
- Termination clause
- Statutory deductions and income tax
Probation periods help an employer and the employee ensure they're a hiring match, allowing a company to quickly decide if it's a fit or the employee to see if the job aligns with their career goals.
Hiring in Malaysia, hassle-free
With Deel, your business can easily hire employees in Malaysia. No more worrying about local laws, complex tax systems, or managing
international payroll. Deel takes care of everything in 150+ countries.
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