Hiring & Employment in Malaysia: 2025 Guide
Your guide to the employment landscape, working customs and local labor laws in Malaysia.
Capital / Economic hubs
Kuala Lumpur (capital); Greater Klang Valley, Penang, Johor Bahru
Currency
Malaysian Ringgit (MYR)
Official Language
Malay (Bahasa Malaysia)
Key Industries
E&E manufacturing, shared services, petrochemicals, palm/agribusiness, logistics, fintech, healthcare, construction
Business Climate Overview
Malaysia offers a diverse economy driven by strong industrial, manufacturing, and services sectors. Its bilingual workforce, modern infrastructure, and strategic ASEAN location make it a top destination for shared services, electronics, and regional headquarters.
Talent Market & Recruitment
Workforce
Large bilingual talent pool; strong in manufacturing, SSC/BPO, and technology
In-demand Roles
- • Software & data
- • Electronics & QA
- • SSC finance
- • Procurement
- • Sales/marketing
- • Healthcare
Hiring Channels
Job Boards:
JobStreet, LinkedIn
Recruitment Firms:
Randstad, Robert Walters, Michael Page
Employment Regulations
Written Contracts
Common and strongly recommended; governed by the Employment Act 1955 (EA) as amended by the Ministry of Human Resources.
Probation Periods
Market practice 3–6 months (not fixed by law)
Public Holidays (2024)
Federal + state holidays; entitlement varies by state and gazette. Always verify against official state/federal lists.
Annual Leave
Employees under the EA are entitled to overtime pay; typical minimum OT rates: 1.5× (normal days), 2× (rest days), 3× (public holidays).
Termination & Severance
Statutory minimum severance: 8 days (<2 yrs), 12 days (2–5 yrs), 16 days (>5 yrs).
Compensation, Tax & Social Security
Average Salary (2025)
Referencing national average rates for 2025
Employer contributions:
Employers contribute up to 17% to the EPF (Employees Provident Fund), depending on age and salary tier (effective Jan 2025 ceiling revision).
Employee contributions:
Employees contribute up to 20% (≤55 yrs) to EPF; age-tiered rates apply.
Overtime Pay
For eligible EA employees, at least 1.5× basic hourly rate for OT; higher on rest days/public holidays.
Bonuses
Market-driven 13th-month or contractual bonuses (not mandatory).
Personal Income Tax
Progressive resident rates up to 24%; see LHDN for exact brackets.
VAT
Currently no VAT; SST system applies separately.
Salary Benchmarks by Industry
| Industry / Role | Junior (Entry–Mid) | Senior (Experienced) |
|---|---|---|
| Software Engineer / Developer | RM5k–7.5k | RM18k–33k+ |
| Front-end / Back-end / Full-stack | RM6.5k–8.3k | RM18k–33k+ |
| Digital Marketing | RM3.3k–5k | RM18k–33k+ |
| Engineering / Manufacturing / Construction | RM5.8k–8.3k | RM18k–33k+ |
| Human Resources | RM5k–7.5k | RM18k–33k+ |
| Finance / Accounting / Banking | RM6.7k–9.2k | RM18k–33k+ |
| Graphic Design / Creative | RM4.2k–6.7k | RM18k–33k+ |
| Healthcare (Doctors, Nurses, Pharma) | RM3.3k–6.7k | RM18k–33k+ |
| Real Estate / Sales | RM5k–7.5k (+commissions) | RM18k–33k+ (+commissions) |
| Management / Leadership | N/A | RM18k–33k+ (varies widely) |
Payroll & Immigration
Payroll Cycle
Monthly; employers must issue payslips and handle statutory deductions (EPF, SOCSO, EIS, PCB).
Work Permits
Employment Pass (EP), Professional Visit Pass, etc. — employer sponsorship required. Quota and eligibility depend on job type and company structure.
Options for Hiring in Malaysia
Employer of Record (EOR)
Local partner employs on your behalf under Malaysian compliance.
Local Payroll Providers
Run payroll and statutory filings (EPF, SOCSO/EIS, PCB).
Independent Contractors
Possible; must manage misclassification risk.
Local Entity Setup
Incorporate a Malaysian entity (Sdn Bhd) to directly hire and manage employees.
Ready to expand your team in Malaysia?
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