Hire and pay employees in
Malaysia, hassle-free

The individual income tax ranges from 0% to 30%. Income tax is calculated according to progressive rates. Multiple additional factors may impact overall rates such as the household status and the number of children.

• Employees Provident Fund (EPF):
  • 12% for salaries lower than MYR 5,000
  • 13% for salaries higher than MYR 5,000
• Employees’ Social Security (SOCSO) - Employees’ Social Secuity (SOCSO)- From MYR 23.65 to MYR 104.15
• Employment Insurance System (EIS): MYR2.70 to MYS 11.90 
• Human Resources Development Fund (HRDF) - 1.00%

Optional Cost
13th salary: Employers can decide to pay their employees in Malaysia a 13th salary. This is an optional bonus amounting to 1 month salary usually paid in January or December. 

These costs are provided as estimates and are intended solely for general informational purposes. To fully comprehend all associated costs and fees related to the terms of any employment agreement for this country, please contact our Sales team for a quote.

• Less than two years of employment - 14 days of sick leave
• Between two and five years of employment - 18 days of sick leave
• More than five years of employment - 22 days of sick leave

Terminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.

Terminations in Malaysia can be complex. There is no at-will termination in Malaysia for employers and termination must be done for just cause. 

Compliant terminations include:

• Voluntarily by the employee
• By mutual agreement
• By the expiration of the contract
• Unilaterally by the employer based on:
  • Probation period
  • Objective grounds
  • Disciplinary dismissal
  • Performance due to unsuitability for the job

• If the length of service is less than two years, four weeks
• If the length of service is two years or more, but less than five years, six weeks notice
• If the length of service is five years or more, eight weeks notice

In Malaysia, severance is generally not required, unless the employee earns less than 4,000 RM per month.

To protect you from unforeseen financial risks arising from terminations, Deel applies a Severance Accrual to all employment agreements in this country.  Deel has extensive expertise in managing litigation risk globally and our Severance Accrual calculation is based on the prevailing common-law or statutory entitlements and local best practices. In the event your employee resigns or is not entitled to severance, all unused amounts will be returned to you.

Malaysia celebrates 5 national public holidays. However, every employee is entitled to the 11 gazetted public holidays and any day specified as a public holiday under Section 8 of the Holidays Act under Section 60D of the Employment Act. The 11 days include 5 compulsory days (listed below) and 6 elective days (employer discretion from the list on the government website). There are also multiple regional and unofficial holidays that can be granted at the discretion of the employer. For more information about the regional holidays in 2023, refer to the Malaysian government website.

• Labor Day: May 1
• Agong’s Birthday: June 5
• Merdeka (Independence) Day: August 31
• Malaysia Day: September 16
• State Ruler’s Birthday

• Position offered
• Duration of the contract
• Place of work
• Basic wage & pay date
• Working hours and days
• Other benefits (if any)
• Overtime (if any)
• Annual leave
• Termination clause
• Sick leave and hospitalization leave
• Rest day
• Probationary period
• Notice period
• Duties and responsibilities
• Termination clause
• Statutory deductions and income tax