* Playroll continues to analyse immediate opportunities and fulfilled roles by recruitment partners, contractors and employers to identify in-demand jobs.

Capital City
Kuala Lumpur

Ringgit (RM)


MST (GMT +8)

Employment Cost

18.95% - 22.45%

Annual Leave

8 days

In-demand Specialties*
Financial Services, Healthcare, Software And It

The Ultimate Guide to Hiring Employees in Malaysia

Simplify hiring employees in by partnering with Playroll. Our Employer of Record (EOR) handles hiring, onboarding, payroll, taxes, immigration, benefits administration, and compliance. While you maintain control of day-to-day tasks and responsibilities.


Key Considerations Before Hiring In Malaysia

Employing in Malaysia requires employers to own a legal entity in the country and manage payroll, tax, benefits and compliance through their own in-country resources. Grow your team in Malaysia with our Employer of Record solution, ensuring streamlined, compliant business expansion with no entity.

Playroll allows you to hire employee's in Malaysia quickly, easily and we even automate tax document collection, benefits, payroll and more.

Good To Know

The number of paid holidays and sick leave available to employees depends on their length of service.

There is no paternity leave in Malaysia but some employers can choose to offer this. Mothers in Malaysia are entitled to at least 60 days of fully paid maternity leave if they have been employed in the last four months, and have worked for the same employer for at least 90 days in the nine months prior to childbirth. The leave period can begin one month before the expected delivery date.

Probation periods are optional, but commonly range from one to three months. There is no legal difference between an employee on probation and a permanent employee.


Fundamental Aspects of Employment in Malaysia

The regulation of employment in Malaysia falls under the 1955 Employment Act, applicable to both fixed-term and permanent employment. According to this law, any arrangement exceeding one month requires a written employment contract. Such contracts are mandated to incorporate specific terms of employment, which include:

  • Identification of both parties
  • Starting date (and duration for temporary contracts)
  • Workplace and working hours
  • Job description, duties, and responsibilities
  • Basic salary (including compensation and benefits)
  • Payment conditions
  • Probation period
  • Total number of holidays
  • Notice periods and guidelines for termination
  • Clauses concerning workplace health and safety

Probationary Period in Malaysia

In Malaysia, probationary periods generally span from 1 to 3 months. According to the Employment Act, there is no distinction in entitlements whether an employee is within or outside the probationary period.

Working hours in Malaysia

The usual working hours in Malaysia consist of 8 hours per day, not exceeding 45 hours per week. However, it is common for employees to work 40 hours per week.

Overtime in Malaysia

Overtime in Malaysia refers to work performed beyond the regular business hours. The maximum monthly limit for overtime hours is 104. Employees are restricted from working more than 12 hours in a day, inclusive of overtime, and must receive compensation at a rate not less than 150% of their standard hourly wage.

Navigating Key Aspects of Payroll in Malaysia

Malaysia has a robust and complex payroll and tax system, and as an employer, it pays to understand payroll process basics.

1 January - 31 December

Fiscal Year in Malaysia

1 January - 31 December is the 12-month accounting period that businesses in Malaysia use for financial and tax reporting purposes.

Payroll Cycle in Malaysia

The payroll cycle in Malaysia is usually monthly, with employees being paid on the last working day.
9.375 MYR p/h

Minimum Wage in Malaysia

The minimum wage for employees in Malaysia is typically 9.375 MYR per hour, amounting to ~1,500 MYR per month for a typical 40 hour work week.

Minimum wages and salaries in Malaysia

The Minimum Wages Order 2022 established the new minimum wage in Malaysia at 1,500 MYR per month.

Bonus Payments in Malaysia

It is common practice in Malaysia to provide a 13-month payment at the end of the year, as specified in the employment agreement.

Comprehensive Overview of Employment Taxes in Malaysia

Understanding the tax obligations for both employers and employees is crucial when operating in Malaysia's business landscape. This section explains how taxes and statutory fees affect payroll and individual earnings in Malaysia.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 18.95% - 22.45% on top of the employee salary in Malaysia.

Tax Rate Tax Type

Employee Payroll Tax Contributions

In Malaysia, the typical estimation for employee payroll contributions cost is around 11.70% - 17.20%.

Tax Rate Tax Type

Individual Payroll Tax Contributions

The computation of individual income tax in Malaysia follows a progressive rate structure. Other variables, such as household status and the number of dependents, can influence the overall tax rates.

Tax Rate Income Bracket

Pension in Malaysia

Employees in Malaysia are eligible for the state's old-age retirement pension, provided they meet criteria such as being at least 60 years old. The pension amount is determined by considering both the employee's and employer's contributions. Payment options include lump-sum payments, monthly payments, or a combination of both.

The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Malaysia tailored to your needs.

Easily navigate payroll, taxes and contributions with Playroll.

Grow your distributed workforce today!

Understanding the Protocols for Termination of Employment in Malaysia

When it comes to terminating employment in Malaysia, understanding the legal obligations regarding severance pay and contributions is essential. Below is a detailed overview of the key considerations for both employers and employees.

Termination Process

In Malaysia, terminations must be justified, and at-will termination does not apply. Acceptable reasons for termination include:

  • Voluntary employee resignation
  • Mutual agreement
  • Contract expiration
  • Unilateral decision by the employer (based on probation period, objective reasons, disciplinary dismissal, inadequate job unsuitability)

Notice Period

Workers in Malaysia have the right to minimum notice periods, and either party can offer payment in lieu as an alternative to giving notice. The duration of the notice periods depends on the length of their employment:

  • Less than 2 years of service – 4 weeks’ notice
  • 2-5 years of service – 6 weeks’ notice
  • More than 5 years of service – 8 weeks’ notice

Severance Pay

Severance pay is compulsory in Malaysia when applicable. The amount of payment varies based on the duration of service:

  • First 2 years of service – 10 days severance pay at regular salary pay rate
  • 2-5 years of service – 15 days per year of service
  • More than 5 years of service – 20 days per year of service

Annual Leave Entitlements and Company Policies in Malaysia

The annual leave entitlement in Malaysia is 8 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays in Malaysia

In Malaysia, there are 11 recognised public holidays in a calendar year, which are separate from annual leave. The initial five holidays are national holidays observed throughout Malaysia, and employers have the flexibility to select 6 out of the following 8 holidays to complete the total of 11 public holidays per year:

Holiday Date

Paid Time Off in Malaysia

Maternity Leave in Malaysia

Paternity Leave in Malaysia

Sick Leave in Malaysia

Parental Leave In Malaysia

Malaysia's Benefits Built Into Playroll

Competitive benefits package in Malaysia

Playroll is committed to providing tailored, competitive benefits packages that are designed not only to attract but also retain top talent worldwide. Our global team of benefits experts build custom local packages to ensure your employees in Malaysia's needs are met. Typically our packages contain some or all of the following benefits.

Health Insurance
Pension or 401k
Life and Disability Insurance
Vision Insurance
Dental Insurance
Discounts & Perks

Playroll Supplementary Benefits For Employment In Malaysia

Make your benefits package in Malaysia a talent magnet with Playroll's local plans. We offer benefits that are compliant, comprehensive, and flexible — all at competitive rates. Speak with our local territory experts to explore the localized benefits we can offer you, while you scale your team.

  • Health Insurance
  • Pension
  • Workman's Compensation
  • Background Checks
  • IT Equipment Sourcing

Statutory benefits for employment in Malaysia

Playroll allows you to provide localized benefits for employees in Malaysia within minutes. All in one manageable online dashboard. If you'd like specific information about our benefits packages in Malaysia create an account or contact our global expansion team, today.

Playroll Benefit Services

Playroll's Expertise in Facilitating Work Visas for Malaysia

At Playroll we're all about empowering employees to work anywhere, making mobility possible for global teams. We sponsor visas and hire the employee for you, so you don’t have to worry about payroll, taxes, and more.

It's important to note, visa support can be complicated. There are many variables that affect whether sponsorship is possible, including one’s nationality, education, marital status, and the immigration policy for the country in question.

Unfortunately, this means we can’t support visas everywhere - with that being said, we handle the entire visa process in-house, and dig into your situation to give you an overview of what to expect if we're able to help with visa sponsorship in Malaysia.

Playroll Immigration Support

Integrated EOR Platform

Legal and compliance experts are readily available to provide guidance and case-by-case Q&A support.

Accelerated Immigration Timeline

By leveraging dedicated support from in-house legal and compliance experts for case by case questions and more.

Hire in 50+ Countries

Accelerated Immigration Timeline

Acquiring a visa without an entity has never been easier, leverage Playroll's global coverage to sponsor and hire employees.

Playroll Visa Services

Hiring International Employees is Complex.

Playroll makes it easy!