Basic Information

Social Contribution

Employer Contribution

13-14%+96.55 RM (maximum)

EPF (provident fund): 13% (if the employee’s salary exceeds RM 5,000, the employer contributes 12%)

SOCSO (Social Insurance): Different fixed amounts are paid according to different salaries, with a maximum payment of 86.65 RM.

SIP/EIS (Employment Insurance): Different fixed amounts are paid according to different salaries, with a maximum payment of 9.9 RM

HRDF (Human Resources Development Fund): 1%

Employee Contribution

11%+34.65 RM (maximum)

EPF (provident fund): 11%

SOCSO (Social Insurance): Different fixed amounts are paid according to different salaries, with a maximum payment of 24.75 RM.

SIP/EIS (Employment Insurance): Different fixed amounts are paid according to different salaries, with a maximum payment of 9.9 RM.

Personal Income Tax

If an employee's monthly income exceeds RM4,000, he or she needs to pay personal income tax.

Payroll

Payroll Cycle

The payroll process typically follows a monthly cycle in Malaysia, and payments are made on the last working day. However, employees’ bank accounts must be credited with their salary by the 7th of every month. In addition, the payroll in Malaysia includes a customary 13th-month pay at the end of each year.

13 Salary

No,but In Malaysia, it is customary to pay a 13th-month payment at the end of the year. This will be stipulated within the employment contract.

Working Time

Standard Working Hours (full time)

The typical workweek is Monday to Friday, the standard working hours are usually 8 hours per day.Common working hours are from 9:00 AM to 6:00 PM, with a one-hour lunch break.

Overtime

The average number of hours worked over any period of three weeks, or over any period exceeding three weeks as may be approved by the Director General, shall not exceed forty-five per week.

No employer shall require any employee who is engaged under his contract of service in shift work to work for more than twelve hours in any one day.

Overtime Pay

Workday：For any overtime work carried out in excess of the normal hours of work, the employee shall be paid at a rate not less than one and half times his hourly rate of pay irrespective of the basis on which his rate of pay is fixed.

Rest days：In the case of an employee employed on a daily, hourly or other similar rate of pay who works on a rest day, he shall be paid for any period of work

Which does not exceed half his normal hours of work,one day's wages at the ordinary rate of pay; or which is more than half but does not exceed his normal hours of work, two days’ wages at the ordinary rate of pay.

In the case of an employee employed on a monthly or weekly rate of pay who works on a rest day, he shall be paid for any period of work—which does not exceed half his normal hours of work, wages equivalent to half the ordinary rate of pay for work done on that day; or which is more than half but which does not exceed his normal hours of work, one day’s wages at the ordinary rate of pay for work done on that day.

For any work carried out in excess of the normal hours of work on a rest day by an employee mentioned in paragraph , he shall be paid at a rate which is not less than two times his hourly rate of pay.

Holidays

Public Holidays

There are a total of 12 public holidays in Malaysia in 2024.

Annual Leave

Less than 2 years of service: At least 8 days of annual leave per year.

2 to 5 years of service: At least 12 days of annual leave per year.

More than 5 years of service: At least 16 days of annual leave per year.

The employer shall pay the employee his ordinary rate of pay for every day of paid annual leave, and an employee on a monthly rate of pay shall be deemed to have received the annual leave pay if he receives his monthly wages, without abatement in respect of such annual leave, for the month in which he takes such annual leave.

Sick Leave

24 days of paid sick leave（For sudden illnesses, an employee is entitled to take up to 10 days of sick leave）,16 days of paid sick leave at 100% of the employee's average income,8 days of paid sick leave at 50% of the salary.

Must be supported by a medical report from the employee’s attending doctor or the doctor of the organization.

Where no hospitalization is necessary,—Of fourteen days in the aggregate in each calendar year if the employee has been employed for less than two years;Of eighteen days in the aggregate in each calendar year if the employee has been employed for two years or more but less than five years; Of twenty-two days in the aggregate in each calendar year if the employee has been employed for five years or more; Or of sixty days in the aggregate in each calendar year if hospitalization is necessary.

Maternity Leave

The minimum amount of paid maternity leave in Malaysia is 98 days.

However, while maternity leave is a statutory right, there are still conditions that must be fulfilled to be eligible: The employee must have been employed within the 4 months leading up to confinement. The employee must have been employed for a total of 90 days in the nine months prior to confinement.Maternity leave only applies for the first five children.

Paternity Leave

A married male employee shall be entitled to a paid paternity leave at his ordinary rate of pay for a period of seven consecutive days in respect of each confinement.

And shall be restricted to five confinements irrespective of the number of spouses.

A married male employee shall be entitled to paternity leave from his employer if— he has been employed by the same employer at least twelve months immediately before the commencement of such paternity leave; and he has notified his employer of the pregnancy of his spouse at least thirty days from the expected confinement or as early as possible after the birth.

Marriage Leave

Not mentioned in the law.

Bereavement Leave

Typically, bereavement leave allows employees to take time off work to grieve and manage affairs related to the death of a close family member, such as a spouse, parent, child, or sibling. The duration and terms of bereavement leave can vary widely depending on the employer. Some companies may offer a few days of paid leave, while others might provide unpaid leave or require employees to use their annual leave or other types of leave.

Parental Leave

Some companies will offer adoption leave, although this is not mandated by law. The terms and duration can vary depending on the employer.

Religious Holidays

Malaysia is a multicultural and multi-religious country, and this diversity is reflected in its wide array of religious holidays. Here are some of the major religious holidays celebrated in Malaysia:

Islamic Holidays

Hari Raya Aidilfitri (Eid al-Fitr): Celebrated at the end of Ramadan, the Islamic holy month of fasting. It is one of the most significant holidays for Muslims in Malaysia.

Hari Raya Haji (Eid al-Adha): Also known as the Festival of Sacrifice, it commemorates the willingness of Ibrahim (Abraham) to sacrifice his son as an act of obedience to God.

Maulidur Rasul: The birthday of the Prophet Muhammad.

Awal Muharram: Islamic New Year, marking the beginning of the Islamic lunar calendar.

Buddhist Holidays

Wesak Day:Celebrates the birth, enlightenment, and death of Buddha. It is the most important Buddhist festival in Malaysia.

Hindu Holidays

Thaipusam: A significant Hindu festival celebrated mainly by the Tamil community. Devotees often carry kavadis (burdens) as acts of penance.

Deepavali (Diwali): Known as the Festival of Lights, it signifies the victory of light over darkness and good over evil.

Labor Contract

Labor Contract Type

Labor contracts are divided into fixed-term contracts and permanent contracts.

Probation Period 

Three to six months.

Termination

Notice Period

Fixed-term Contract

The termination notice period for the probationary period is 24hours or 1week, depending on the contract.

The termination notice period for official employees is 30 days.  If the contract does not specify, the statutory requirements shall apply.The statutory notice periods are as follows (based on years of service, X):

X < 2 years --- 4 weeks;

2 < X < 5 years --- 6 weeks;

X > 5 years --- 8 weeks.

The termination notice period for official  employees is employers must issue a written termination notice, specifying the last day of employment and the reason for termination. Adhere to the notice period stipulated in the contract or provide payment in lieu of notice, which is generally 30 days. If the contract does not specify, the statutory requirements shall apply. The statutory notice periods are as follows (based on years of service, X):

X < 2 years --- 4 weeks;

2 < X < 5 years --- 6 weeks;

X > 5 years --- 8 weeks.

Permanent Contract

Internship employees do not have a notice period.

Official employees must give 30 days’ notice before resigning,If the contract does not specify, the statutory requirements shall apply. The statutory notice periods are as follows (based on years of service, X):

X < 2 years --- 4 weeks;

2 < X < 5 years --- 6 weeks;

X > 5 years --- 8 weeks.

The dismissal period for official employees is 30 days’ notice before resigning,If the contract does not specify, the statutory requirements shall apply. The statutory notice periods are as follows (based on years of service, X):

X < 2 years --- 4 weeks;

2 < X < 5 years --- 6 weeks;

X > 5 years --- 8 weeks.

Severance Pay

Fixed-term Contract

There is no compensation for employees who leave during the probation period.

Official employees get compensation for dismissal is employees who have been employed for 12 months or more and earn a monthly salary not exceeding RM4,000 are entitled to the following minimum statutory severance pay. For employees earning more than RM4,000 per month, the entitlement to severance pay depends on the employment contract. If the contract does not specify, there is no statutory right to severance pay, but in some cases, it is generally expected that employers should provide reasonable severance pay. (If an employee is terminated without cause, the statutory minimum severance pay generally needs to be paid, but this can be negotiated with the employee.) The statutory requirements are as follows (based on years of service, X): 

X < 2 years --- 10 days' salary per year;

2 < X < 5 years --- 15 days' salary per year;

X > 5 years --- 20 days' salary per year.

Permanent Contract

Internship employees do not have a compensation.

Termination compensation for official employees who have been employed for 12 months or more and earn a monthly salary not exceeding RM4,000 are entitled to the following minimum statutory severance pay. For employees earning more than RM4,000 per month, the entitlement to severance pay depends on the employment contract. If the contract does not specify, there is no statutory right to severance pay, but in some cases, it is generally expected that employers should provide reasonable severance pay. (If an employee is terminated without cause, the statutory minimum severance pay generally needs to be paid, but this can be negotiated with the employee.) The statutory requirements are as follows (based on years of service, X):

X < 2 years --- 10 days' salary per year;

2 < X < 5 years --- 15 days' salary per year;

X > 5 years --- 20 days' salary per year.