As an employer or HR professional in Malaysia, staying on top of minimum wage regulations is crucial. This blog post covers the current minimum wage in Malaysia (RM1,700 per month), the hourly and daily equivalents for part-timers, who the minimum wage applies to, and the increase to RM2,000 announced in Budget 2027 for June 2027.
What is the Minimum Wage in Malaysia?
The Minimum Wages Order 2024, gazetted on 4 December 2024, raised the national minimum wage to RM1,700 per month, or RM8.72 per hour. It took effect on 1 February 2025 for employers with five or more employees and for employers carrying out professional activities under MASCO 2020, regardless of headcount. For all other employers, including those with fewer than five employees, it took effect on 1 August 2025.
The order applies to all employees, including foreign workers, except domestic servants. Even for employees earning commission, piece rates, or other non-standard wages, their total monthly earnings must still be at least RM1,700.
Phase-In for Small Employers (Ended 1 August 2025)
Employers with fewer than five employees, other than those carrying out professional activities under MASCO 2020, were allowed to keep paying RM1,500 until 1 August 2025. Since 1 August 2025, the RM1,700 minimum wage has applied to all employers regardless of headcount.
Minimum Wage for Part-Timers
The minimum wage amendments also apply to employees paid on a daily or hourly basis, including part-timers.
Minimum Wages Adjustment Over the Years
The Malaysian government reviews the minimum wage at least once every two years. The following table shows the minimum wage adjustments over the years:
Budget 2027: Minimum Wage to Rise to RM2,000 from June 2027
In the Budget 2027 speech on 9 October 2026, the government announced that it will raise the national minimum wage from RM1,700 to RM2,000, effective June 2027. More than four million workers are expected to be covered by the new rate. Micro, small and medium enterprises (MSMEs) with annual sales below RM50 million are exempt for now, to give them room to adjust their business models. The government also plans to introduce a minimum wage of RM2,500 per month for semi-skilled jobs and graduates as a starting point. (Source: Budget 2027 speech, Ministry of Finance Malaysia)
The RM1,700 rate continues to apply until the new rate takes effect. The criteria for the MSME exemption and the exact effective date will follow from the Ministry of Human Resources, so check its announcements before updating payroll. To prepare:
- Budget for the RM2,000 rate in your 2027 payroll plan, especially for part-time and hourly staff.
- Check whether your company qualifies as an MSME with annual sales below RM50 million.
- Review pay structures so that allowances and incentives do not leave any employee below the minimum wage.
Staying Compliant with Minimum Salary Regulations
As an employer, adhering to minimum wage regulations is not just ethical but also mandatory by law. Here are some tips for staying compliant:
- Stay updated: Keep yourself informed about any changes or revisions to the minimum wage through official government resources like the Ministry of Human Resources website.
- Review employment contracts: Regularly review employment contracts to ensure they reflect the current minimum wage.
- Maintain proper records: Maintain clear records of employee salaries and working hours to demonstrate compliance during inspections.
Conclusion
Understanding minimum wage regulations is essential for employers and HR professionals in Malaysia. By following the guidelines outlined in this blog post, you can ensure fair compensation for your employees and avoid any legal complications.
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More Resources for You
- A Comprehensive Guide to Annual Leave in Malaysia
- Comprehensive Guide to Maternity and Paternity Leave in Malaysia
- Understanding Working Hours in Malaysia: Key Regulations and Practices
- A Comprehensive Guide to Overtime Pay in Malaysia
- All-in-One HRMS: Unveiling Malaysia's Top 5 HR system Choices for SMEs
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Disclaimer: This blog post provides general information and shouldn't be interpreted as legal advice. For comprehensive details and the latest updates, refer to the official website of the Ministry of Human Resources Malaysia.
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