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Public Holidays Calendar

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Malaysia 2022
Day Date Holiday Notes
Tuesday Feb-1 Chinese New Year's Day
Wednesday Feb-2 Second Day of the Chinese New Year
Sunday May-1 Labor Day
Monday May-2 Labor Day Holiday
Tuesday May-3 Festival of Breaking the Fast
Wednesday May-4 Second Day of the Festival of Breaking the Fast
Sunday May-15 Wesak Day
Monday May-16 Buddha Day
Monday Jun-6 Birth of the King
Sunday Jul-10 Feast of the Sacrifice
Sunday Jul-31 Islamic New Year's Day
Monday Aug-1 Day off in lieu of Islamic New Year's Day
Wednesday Aug-31 National Day
Friday Sep-16 Malaysia Day
Sunday Oct-9 Birth of the Prophet
Monday Oct-24 Festival of Lights
Sunday Dec-25 Christmas Day
Countrypedia

Malaysia
Payroll and Benefits Guide

Last updated: May 01, 2022
Currency
Malaysian Ringgit (MYR)
Payroll Frequency
Monthly
Employer Taxes
18.95%-22.45%

Papaya Offers Complete Payroll, PEO and Contractor Management Services For Malaysia

Download PDF Version

Overview

Capital
Kuala Lumpur
Currency
Malaysian Ringgit (MYR)
Date Format
dd/mm/yyyy
Fiscal Year
1 January- 31 December
Public holidays calendar

Contributions

Employer

Employer Payroll Contributions

12.00% - 13.00%

Provident Fund (employees under the age of 60)

4.00%-6.50%

Provident Fund (employees over the age of 60)

1.75%

Social Security (SOCSO)

0.20%

Employment Insurance (EIS) (monthly salary ceiling of 5,000 MYR)

1.00%

Human Resource Development Fund (over 10 employees)

18.95%-22.45% Total Employment Cost

Employee

Employee Payroll Contributions

9.00% - 11.00%

Provident Fund (employees under the age of 60) *The extension, which can be opted out if members choose to, will take effect from January 2022 wages (February 2022 contribution) until June 2022 wages (July 2022 contribution). After which, the minimum statutory contribution rate for employees will return to 11%. However, for employees who wish to maintain their contributions rate at 11% can do so by updating EPF

0.00%-5.50%

Provident Fund (employees over the age of 60)

0.50%

Social Security (SOCSO)

0.20%

Employment Insurance (EIS) (monthly salary ceiling of 5,000 MYR)

9.70%-17.20% Total Employee Cost

Employee Income Tax

0.00%

Up to 5,000 MYR

1.00%

5,000 – 20,0000 MYR

3.00%

20,000 – 35,000 MYR

8.00%

35,000 – 50,000 MYR

13.00%

50,000 – 70,000 MYR

21.00%

70,000 – 100,000 MYR

24.00%

100,000 – 250,000 MYR

24.50%

250,000 – 400,000 MYR

25.00%

400,000 – 600,000 MYR

26.00%

600,000 – 1,000,000 MYR

28.00%

1,000,000 – 2,000,000 MYR

30.00%

2,000,000 MYR and over

Minimum Wage

General

The national minimum wage is 1,200 MYR per month (until December 31, 2022) or 1,500 MYR per month for companies in the private sector with five or more employees.

 

Payroll

Payroll Cycle

The payroll cycle in Malaysia is generally monthly, with payments made on the last working day. 

13th Salary

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 Hours

General

Standard working hours are 8 hours per day up to a maximum of 48 hours per week, with the office working hours being slightly less at 45 hours per week; generally, 9 am to 6 pm. 

Overtime

All work more than the standard working hours a week is to be paid as overtime and is regulated by the Employment Act, the employment contract, and the collective agreements.  Generally, the Employment Act is used as guidance, although it is only legally relevant to manual and non-manual employees with a salary of less than 2,000 MYR.  

The Act states that overtime hours during the week on a working day are paid at 150.00% of the regular salary rate and overtime hours worked on rest days and weekends are paid at 200.00% of the regular salary rate. 

Payment for overtime worked on public holidays is paid at a rate of 300.00% of the regular salary rate. 

Working Week

Varies across regions, it can be Monday-Friday or Sunday-Thursday

Leave

Paid Time Off

Paid leave in Malaysia is outlined in the employment contract as dependent upon the years of employment. This paid leave is in addition to any public holidays.    

An employee within the first two years of employment is entitled to 8 days paid leave per year. From the second to the fifth year of service, the employee is entitled to 12 days per year, which increases to 16 days for employees with more than five years of service. 

Public Holidays

There are 6 compulsory public holidays and 10 optional public holidays (employer should choose at least 5 of these but it is common for offices to close on all). State day is a compulsory public holiday and the day varies from state to state. All other holidays are national.

Sick Days

Paid Sick pay in Malaysia is set in the employment contract as dependent upon the years of employment and the provision of a professional medical certificate. 

The amount of paid sick leave entitlement is based on the number of years’ service.

  • If an employee has less than two years of service, they are entitled to 14 days of sick leave per year. 
  • An employee with 2 to 5 years of service will be entitled to 18 days of sick leave per year.
  • Employees with more than five years’ service are entitled to up to 22 days of sick leave per year. 

Maternity Leave

In Malaysia, the statutory maternity paid leave period for employees in the private sector is 90 consecutive days.  

The maternity leave period cannot start earlier than 30 days before the due date. All maternity leave in Malaysia is only applicable to a female employee’s first five surviving children.  

Paternity Leave

In Malaysia, fathers in the public sector enjoy seven days of leave to welcome and bond with their new-born, while those in the private sector are not entitled to any leave at all. 

Parental Leave

There is no statutory parental leave in Malaysia. 

Other Leave

There is no other statutory leave in Malaysia. 

Termination

Termination Process

The termination process is standard in Malaysia is based on the Labour Law requirements unless an employer can provide sufficient cause for dismissal without notice.   

Notice of termination must be in writing and sent to the relevant governmental authorities.

Notice Period

There are no statutory notice periods in Malaysia, but 30 days’ notice is commonly given. 

Severance Pay

In Malaysia, severance pay is mandatory if applicable, but the amount differs based on the length of service. 

  • Ten days of severance pay at the regular salary pay rate for every year of service completed for employees within the first two years of employment. 
  • For employees who have completed between two and five years, the payment is calculated at 15 days per year of service.
  • For an employee with five or more years of service, the entitlement is 20 days per year of service. 

Probation Period

The probation period in Malaysia for permanent employees is generally between 1 and 3 months. Although, the Employment Act confirms that there is no difference applicable to entitlements to employees whether they are within their probation period or not. 

VISA

VISA

The employer must sponsor the visa and must be an accredited company that may hire foreign employees. The employee must be a certified foreign expert in the field they will be working.  Malaysia also has a reported critical occupations list (COL), highlighting job types where there is a skills shortage within the country that supports work permits/visa applications. 

In Malaysia, there are three work permit/visa types: an employment pass, a professional visit pass, and a temporary employment pass.  Each type of pass has its criteria for acceptance, with several stipulations that the employee must meet to qualify. 

VAT

General

The standard rate of VAT in Malaysia is 10.00% for sales tax, 6.00% for service tax. 

Version History

May 1, 2022
The monthly minimum wage increased to 1,500 MYR for companies in the private sector with five or more employees.
February 28, 2022
Payroll contributions and personal income tax rates have been updated.
January 1, 2021
The employee contribution to the mandatory Employees Provident Fund (EPF) rate has been reduced to 9%.
Stay up to date on payroll & employment law changes

Questions & Answers

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Nor R.
Nor R.
1 year ago

Who is covered by the employee act or are all employees covered?

Emily Kuhnert
Admin
1 year ago
Reply to  Nor R.

Hi Nor, thank you for your question. Not all employees are covered by the Employment Act. People who earn less than 2,000 Ringitt per month, manual laborers (regardless of income level), and foreign workers who are legally in Malaysia are covered. Hope this helps!

Shirin
Shirin
1 month ago

 If employee pays Social security fund in home country then, is there a need to pay Social Security contribution in host country? 

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