Hire and pay employees in

Malaysia, hassle-free

Hire and pay employees 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.

The average onboarding time frame in Malaysia is 5 days with Deel.

Currency

Malaysian Ringgit (MYR)

Capital

Kuala Lumpur

Official Language

Malay

Payroll Cycle

Monthly

Onboard, pay and manage employees in Malaysia with Deel.

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.

Deel lets you hire employees in Malaysia quickly, easily, and compliantly. We even automate tax document collection, payroll, benefits, and more. For your existing direct employees, we can manage your entire payroll operation from end-to-end.

Download the Guide

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

The minimum wage for employees in Malaysia is MYR 1,500 per month.

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%
Over 2,000,000 30%

Payroll Cost

Employer cost ranges from 13% - 14% of employee salary:
  • 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 
  • Human Resources Development Fund (HRDF) - 1.00%

Optional Cost
13th salary: Employers can decide to pay their employees in Malaysia a 13th salary. This is an optional bonus amounting to 1 month salary usually paid in January or December. 

Overtime Pay & Maximum Hours

Overtime payment is mandatory and may be included in the salary if the employee is earning less than MYR 4,000 per month. 

For employees earning over MYR 4,000 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.

Maternity Leave

Pregnant employees who have worked no less than 90 calendar days in the last four months are entitled to 60 calendar days of paid leave.  Leave can be taken time up to 30 days before giving birth. The remaining days can be divided into two periods of time. The employee will receive 100% of the salary during this period, and the employer will be responsible for this pay. 

Paternity Leave

There is no paternity leave currently required by law. 

Parental Leave

In Malaysia, no law covers parental leave. However, employees may be entitled to maternity leave and paternity leave. 

Sick Leave

Employees are entitled to paid sick leave. The number of sick leave days will depend on the length of employment, which ranges from 14 to 22 days per calendar year. The employee will receive 100% of their average salary paid by the employer. 
  • 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
In addition to sick leave, employees are entitled to two months of hospitalization leave per year. Sick leave is paid by the employer at 100% of the salary.  A medical certificate is required under all circumstances.

Termination Requirements

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

Notice Period

The minimum notice period is four weeks and increases based on the length of the employment. 
  • 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
For Non-Employment Act Employees, the notice period is dependent on the agreement between the employer and the employee. Employment Act Employees are generally those that earn less than RM 2,000 per month or are engaged in manual labor.

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

Both full-time and part-time employees are entitled to paid time off (PTO), the number of days based on the length of service. Employees are eligible to take PTO as soon as they accrued enough. 

Public Holidays

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

Onboarding

Onboarding takes five business days.

Employment Contract Details

Contracts must be in English. They must be in writing and signed by both parties. 
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 Period

Employees hired using Deel have a probation period of 90 days, which you can extend up to 180 days. As of January 2022, it's Deel company policy to include probation periods in all employment contracts moving forward.

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.
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Hiring in Malaysia, hassle-free

With Deel, your business can easily hire employees in Malaysia with our EOR solution. If you have an entity, our Global Payroll solution takes care of payroll and compliance for your direct employees. Our 250+ in-house experts handle everything from managing local laws, complex tax systems, or your payroll in Malaysia and 150+ countries.

Group (8)

599 USD

Management fee

Group (9)

13-14%

Estimate Employer Cost

*of employee salary

Want to learn the cost of hiring an employee in Malaysia?

View our Employee Cost Calculator

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