Remote’s guide to employing in Malaysia.
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We own our own entity in the countries where we operate to shield your company from risk and provide you and your employees with the signature Remote experience.
Malaysia is a tourism hotspot with rich cultural diversity, and an established economic superpower among the ASEAN countries.
For over half a century, the Malaysian economy has experienced significant economic growth, driven by gains in the mining, tourism, commerce, pharmaceuticals, and manufacturing industries in particular. Kuala Lumpur is now home to a burgeoning tech sector with a strong base of digital talent and highly skilled services professionals.
This Southeast Asian nation is a prime destination for employers looking for quality team members, and many businesses establish an Asian hub in the city affectionately know as KL.
32,730,000 (est. 2020)
Ease of doing business
Cost of living index
VAT - standard rate
GDP - real growth rate
To employ in Malaysia, companies must own a local legal entity in the country or work with a global employment solution. Managing payroll, benefits, taxes, and compliance in Malaysia can get complicated, especially without established local relationships.
Remote’s global employment solution makes it easy for your company to employ workers in Malaysia quickly, efficiently, and in full compliance with all applicable labor laws. We take on the responsibility and legal risks of international employment so you can focus on hiring great talent and growing your business.
Employment regulations in Malaysia are spelled out across several government statutes such as:
Put together, these regulations define the protections and rights applicable to Malaysia’s workforce of 16 million. Employees in Malaysia enjoy protections against discrimination based on age, religion, gender expression, and race.
Common questions that could come up during the hiring process include the minimum wage, overtime rates, and guaranteed paid time off. Remote can help you offer a complete, competitive, and compliant benefits package to your employees in Malaysia.
At Remote, we’re obsessed with helping you craft the best possible employee experience for your team. We are leading the way in practicing “fair equity,” which means making sure employees everywhere have access to both the required and supplemental benefits they need to thrive (and that will allow you to attract the best local talent).
Our benefits packages in Malaysia are tailored to fulfill the local needs of your employees. Typically, our packages contain some or all of the following benefits:
Learn how employment taxes and statutory fees affect your payroll and your employees’ paychecks in Malaysia.
12 - 13%: Provident Fund (for employees up to the age of 60)
4 - 6.5%: Provident Fund (for employees over the age of 60)
1.75%: Social Security (SOCSO)
0.20%: Employment Insurance (EIS)
1%: Human Resource Development Fund (for over 10 employees)
9%: Provident Fund (employees up to the age of 60)
0.00 - 5.5%: Provident Fund (employees over the age of 60)
0.5%: Social Security (SOCSO)
0.20%: Employment Insurance (EIS)
0%: Up to 5,000
1%: 5,000 –20,000
3%: 20,000 – 35,000
8%: 35,000 - 50,000
13.00%: 50,000 - 70,000
21.00%: 70,000 - 100,000
24.00%: 100,000 - 250,000
24.50%: 250,000 - 400,000
25.00%: 400,000 - 600,000
26.00%: 600,000 - 1,000,000
28.00%: 1,000,000 - 2,000,000
30.00%: 2,000,000 and over
Employees are entitled to paid time off in proportion to their tenure working with an employer’s organization.
There are six obligatory public holidays and 10 optional public holidays, and employers are expected to observe at least half of the latter.
Employees accrue sick leave according to their tenure with an employer, and paidsick leave can last up to 22 days annually.
Employees are entitled to a maximum of 60 paid sick days if they are hospitalized, inclusive of the standard sick leave entitlement mentioned above.
Female employees are entitled to 60 days of paid maternity leave, although employers can opt to extend the length of the maternity leave with no additional pay (i.e., for the extra 30 days).
There’s no statutory paternity leave for private employees under Malaysian law, but government employees get anywhere from 7-14 days of paternity leave.
1 - 3 days consecutive working days off as compassionate leave in the event of the death of an immediate family member.
Adoptive parents are entitled to 15 days of leave, from the day their child is handed over to their legal custody.
Employee contracts can be terminated if a just cause is established, such as dishonesty, negligence, fraud, or any other work-related offenses and employees reserve the right to dispute their dismissal as unfair.
There is no stipulated notice period required under Malaysian employment law.
Employees who’re dismissed unfairly (i.e., for reasons not related to their performance or conduct) are entitled to severance packages equivalent to their tenure working with an employer.