Minimum Wage Malaysia 2026: Rates, Law & Guide | QuickHR
Minimum Wage in Malaysia 2026: Salary Rates, Law & Complete Employer Compliance Guide
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Minimum Wage in Malaysia 2026: Salary Rates, Law & Complete Employer Compliance Guide

Posted on 25 May 2026 in Business | Suki Bajaj

The minimum wage in Malaysia sets the legal baseline salary every employer must pay their employees.

Whether you're onboarding your first hire or managing a workforce of hundreds, let us guide you through the latest minimum wage in Malaysia rates, hourly and monthly calculations, employer obligations, and how payroll solutions like QuickHR keep your business compliant.

Key Takeaways:

  • The minimum wage in Malaysia 2026 is RM1,700 per month, applied uniformly across all states including Sabah, Sarawak, and Labuan.
  • Allowances, incentives, and benefits cannot substitute for a base salary that falls below the minimum wage threshold - the basic wage itself must meet the requirement.
  • Minimum wage applies to all private-sector employees from day one, including part-timers and probationary staff, with no grace period for new hires.
  • Non-compliant employers risk fines of up to RM10,000 per employee, back-payment orders, and potential imprisonment for repeat offences under the National Wages Consultative Council Act 2011.
  • QuickHR simplifies payroll compliance by auto-calculating wages, statutory contributions, and being regularly updated with the EP threshold changes, keeping businesses aligned with the latest Malaysian labour regulations.

In this guide, we’ll talk about:

Everything You Need to Know About Minimum Wage in Malaysia

It's governed by the Minimum Wages Order under the National Wages Consultative Council Act 2011, which means non-compliance isn't just an HR oversight; it's a legal violation.

The established policy aims to protect lower-income workers from exploitation, reduce wage inequality, and ensure that every working Malaysian earns enough to cover basic living costs.

For HR, this means the minimum wage is a compliance baseline that shapes how you structure compensation, plan headcount budgets, and manage statutory contributions and income taxes.

💡 See also: Complete Guide to Mandatory Payroll Deductions in Malaysia

One important nuance many employers overlook: allowances, incentives, and benefits cannot be used to top up a salary that falls below the minimum wage threshold. The basic wage itself must meet the requirement, not the total package.

Malaysia payroll regulations

What Is the Minimum Wage in Malaysia?

As of 2026, the minimum wage in Malaysia per month is RM1,700, a rate that came into effect in February 2025 following the gazette of the Minimum Wages Order 2024.

This applies uniformly across all states and territories in Malaysia including Sabah, Sarawak, and Labuan, which previously had lower rates.

Minimum wage Malaysia 2026 monthly, daily and hourly rates

Minimum Wage Malaysia: How the Rate Has Changed Over the Years

Understanding the trajectory of minimum wage increases helps businesses anticipate future changes and budget accordingly.

Year Monthly Rate Coverage Key Change
2013 RM 900 – RM 800 Peninsular / Sabah & Sarawak First national minimum wage introduced
2016 RM 1,000 – RM 920 Peninsular / Sabah & Sarawak First revision upward
2018 RM 1,050 / RM 920 Two-tier rates Separate rates for cities and rural states
2020 RM 1,200 All states Uniform rate introduced for all states
2022 RM 1,500 All states Significant increase; microenterprises phased in at RM1,200
Feb 2025 RM 1,700 All states including Sabah, Sarawak & Labuan Current rate (uniform nationally)

Minimum Wage Malaysia for Foreign Workers

Effective June 1, 2026, there will be major increases on minimum wage thresholds for foreign workers with Employment Passes (EP).

Malaysia Employment Pass minimum salary thresholds by category from June 2026

All new and renewal EP applications submitted on or after 1 June 2026 must comply with these revised thresholds.

HR teams managing foreign hires should audit affected roles now and align compensation offers before the deadline.

Does Minimum Wage Apply to Part-Time Workers?

Yes, the minimum wage in Malaysia applies to all private-sector employees, including part-timers.

Part-timers are generally paid based on an hourly rate, which must not fall below the proportional equivalent of the RM 1,700 monthly minimum wage.

Employer Obligations Under Minimum Wage Law

Malaysia minimum wage law places clear, non-negotiable duties on every employer in the private sector. Here are the key obligations employers must fulfil:

Pay at or above the minimum wage

The gross salary must meet RM1,700 per month. Employers cannot use allowances or incentives to bridge a shortfall to the base pay.

Issue proper payslips

Under the Employment Act, it is mandatory for employers to provide itemised payslips showing basic wages, allowances, deductions, and net pay.

💡 See also: Complete HR Guide to Creating Itemised Payslips in Malaysia

Maintain accurate wage records

Employers must keep payroll records for at least 6 years, which are subject to inspection by the Department of Labour (JTKSM)

Apply the correct rate from day one

The minimum wage applies from the first day of employment, including probation periods. There is no grace period for new hires.

What Happens If Employers Pay Below Minimum Wage?

Non-compliance with Malaysia minimum wage law carries real consequences, and labour enforcement has become increasingly active.

Under the National Wages Consultative Council Act 2011, employers who fail to pay the minimum wage can face:

  • Fines of up to RM10,000 per employee for a first offence
  • Up to RM20,000 per employee or imprisonment for repeat offences or wilful non-compliance
  • Back-payment orders where employers may be required to pay all outstanding wages owed to affected employees
  • Labour complaints and investigations where employees can file complaints directly with the nearest JTKSM office, triggering a formal audit of your payroll records
  • Reputational damage in which cases involving wage theft are increasingly publicised, affecting the ability to hire and retain talent

How Minimum Wage Impacts Payroll in Malaysia

The minimum wage rate in Malaysia doesn't just affect the salary line, it ripples through your entire payroll structure.

💡 See also: Ultimate HR Guide to Payroll Compliance in Malaysia

  • EPF contributions are calculated on actual wages paid. A higher base means proportionally higher employer EPF contributions.
  • SOCSO and EIS contributions are also wage-dependent, so accurate base salary inputs matter.
  • Overtime calculations must use the correct hourly rate derived from the monthly wage. Errors here compound quickly across a large workforce.
  • Budget planning needs to account for the full cost of employment, including gross salary, statutory contributions, overtime liability, and leave encashment all flow from the minimum wage baseline.
  • Salary structuring for roles near the minimum wage threshold should be reviewed regularly, especially when minimum wage updates are announced, to avoid inadvertent non-compliance.

How QuickHR Helps Ensure Minimum Wage Compliance

Manually keeping up with minimum wage Malaysia 2026 updates, EP policy changes, and statutory contribution rules is a major operational risk.

QuickHR Malaysia, an all-in-one HRMS and payroll solution, automates your payroll compliance, ensuring accurate calculations, streamlined processing, and on-time submissions.

  • Auto-calculates wages, overtime, public holiday pay, allowances, bonuses, and all statutory contributions based on current regulations, employee citizenship, and age status
  • Always up to date with the latest SOCSO, EPF, EIS, LHDN, and MOHR regulations so you're never caught off guard by policy changes
  • Integrated attendance, leave, and claims into payroll calculations, ensuring accuracy across all processes
  • Direct-to-bank, MAS-compliant salary payments that auto-syncs with payroll in real time
  • One-click statutory submissions with bank-ready files for KWSP, LHDN, PERKESO, and HRDF
  • Accounting integration syncing payroll data directly with QuickBooks Online and Xero for seamless financial reporting

Ready to streamline your payroll compliance? Book a free demo today and see how we can help your business adapt easily to the ever-evolving Malaysian regulations.

Frequently Asked Questions

As of 2026, the minimum wage in Malaysia is RM1,700 per month, effective since February 2025 under the Minimum Wages Order 2024. This rate applies uniformly across all states, including Sabah, Sarawak, and Labuan.

QuickHR makes it easy to configure payroll calculations to reflect the company policies and latest minimum wage in Malaysia 2026 rates, keeping your business fully compliant.

The minimum wage in Malaysia per hour is RM8.18, based on the RM1,700 monthly rate. The daily rate is RM65.38, calculated on a 26-day basis.

QuickHR automates hourly and daily wage calculations, eliminating manual errors and ensuring your payroll consistently meets Malaysia minimum wage law requirements.

Yes, the part-time minimum wage in Malaysia applies to all private-sector employees. Part-timers are paid proportionally based on hours worked, using the RM8.18 hourly rate derived from the RM1,700 monthly minimum.

QuickHR Payroll System accurately prorates wages for part-time staff, ensuring compliance with minimum wage Malaysia regulations effortlessly.

Employers who pay below minimum wage in Malaysia risk fines of up to RM10,000 per employee for first offences, rising to RM20,000 or imprisonment for repeat violations, plus mandatory back-payment orders.

QuickHR makes compliance easier by streamlining payroll reports, giving employers full visibility over salary data to review and verify wages accurately.

The RM1,700 per month minimum wage applies to all private-sector employees in Malaysia, including foreign workers, regardless of nationality. For foreign professionals on Employment Passes (EP), higher revised salary thresholds apply effective 1 June 2026 — all new and renewal EP applications must meet these updated rates set by the Immigration Department of Malaysia.

QuickHR handles payroll for both local and foreign employees, automatically applying the correct wage calculations and statutory contributions based on each employee's work pass status and citizenship — keeping your business compliant without the manual guesswork.

Since EPF is calculated as a percentage of actual wages paid, a higher minimum wage means higher EPF obligations for both employer and employee. At RM1,700/month, the employee contributes RM187 (11%) and the employer contributes RM221 (13% for salaries ≤RM5,000) — bringing the total EPF cost to RM408 per minimum-wage employee per month.

This is why your actual cost of employment always exceeds the base salary figure, and budgeting accurately matters.

QuickHR Payroll auto-computes EPF, SOCSO, and EIS contributions in real time, reflecting the latest statutory rates so you never have to calculate these manually or worry about under-contribution.

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