Malaysia offers a skilled, multilingual Southeast Asian workforce and a straightforward provident-fund system. All-in employer cost runs around 1.14x the gross salary. Here is what to know before your first Malaysian hire.
Employment runs under the Employment Act (broadened in 2023) plus EPF, SOCSO, and EIS. Written terms are standard, and the provident fund is the largest single on-cost.
The national minimum wage is about MYR 1,500 per month in 2024*, revised periodically.
Monthly payroll. A contractual bonus is common but not statutory.
There are 14 or more gazetted holidays a year across federal and state dates.
Written terms are standard. Probation is commonly one to six months, with confirmation in writing.
Employer costs sit around 14%, dominated by the Employees Provident Fund plus small SOCSO and EIS contributions.
The employer EPF rate is 13% for lower wages and 12% above a threshold, and it goes to the employee's retirement account.
Employees pay income tax under the monthly deduction scheme plus their EPF and SOCSO share, withheld at source. Withholding is the employer's responsibility, which under EOR means ours.
From 8 to 16 paid days a year depending on tenure under the Employment Act.
98 days of maternity leave following the 2023 amendments, paid by the employer.
Seven days of paid paternity leave under the amended Act.
From 14 to 22 outpatient days a year by tenure, with more for hospitalisation.
Notice runs from four to eight weeks by tenure or pay in lieu, and dismissal needs 'just cause and excuse'.
Statutory termination and lay-off benefits of 10 to 20 days' pay per year apply to covered employees on redundancy.
Commonly one to six months; probationers still have protection against unjust dismissal.
A contractor working like an employee can be reclassified, with back EPF, SOCSO, and entitlements.
*All figures are estimates from public sources (2025-26), pending ops verification - same basis as the EOR cost calculator. Not tax or legal advice.
Compliant Malaysian employment contract, payroll, EPF, and SOCSO, handled. One invoice, flat $399 per month.