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As of 2025, the minimum wage in Malaysia was increased to RM1,500 per month for private sector companies employing at least five workers. This policy change represents a significant step towards enhancing the financial security of workers in the country, as well as promoting greater economic growth and development. It is worth noting, however, that employers with fewer than five workers have been allowed to defer the implementation of the new minimum wage rate until July 2023.
At the start of 2025, the minimum wage in Malaysia was increased to RM1,700, marking a 13% increase in the RM1,500 minimum wage that was in place from 2022. The new minimum wage is part of the government’s efforts to improve employee well-being.
If you are a foreign employer looking to hire workers in Malaysia, our guide below sheds light on the minimum wage that the government of Malaysia requires of you.
Minimum wage is the smallest wage amount that the law of a country allows employers to pay employees. The presence of a minimum wage ensures that no worker gets paid below a minimum amount for work, maintaining a standard for employees.
In Malaysia, a minimum wage is essential in reducing poverty among citizens and improving the standard of living. A fixed lower limit to how much workers can earn promotes equality among workers and provides stability to the labour market.
The current minimum wage in Malaysia is RM1,700 per month or RM8.72 per hour. Following the 2024 Minimum Wage Order, the RM1,700 minimum wage came into effect in February 2025.
Employers who have 5 or more employees classified under the Malaysia Standard Classification of Occupations (MASCO) were required to comply with the new minimum wage starting from February 1, 2025.
The authorities allowed employers with fewer than 5 employees to defer implementing the new minimum wage till August 1, 2025.
The monthly minimum wage of RM1,700 is a slight improvement over RM1,500, which was the minimum wage from 2022 to 2024.
Since 2022, the minimum wage has been standardised for every region in the country, with no separation between Peninsular Malaysia and other regions.
In 2011, the National Wages Consultative Council (NWCC) was established in Malaysia to establish and enforce a minimum wage in the country.
Fast forward to July 2012, the NWCC passed the first Minimum Wage Order, stating the minimum wage for employees starting from the following year, 2013.
From January 1, 2013, employers were required to pay a minimum monthly salary of RM900 for employees in Peninsular Malaysia, and RM800 for employees in Sabah, Sarawak, and the Federal Territory of Labuan.
There was a slight exception to the law, however, as employers with fewer than 5 employees were allowed to defer their implementation of the new minimum wage till July 1, 2013.
The RM900 monthly minimum wage was equivalent to RM4.33 per hour, while the RM800 wage was RM3.85 per hour.
On a daily basis, the RM4.33 hourly wage amounted to RM51.96, RM41.57, and RM34.64 for a 4-day, 5-day, and 6-day work week, respectively. On the other hand, the RM3.85 hourly rate added up to RM46.20, RM36.96, and RM30.80 for 4, 5, and 6 days of weekly work.
In the years following 2013, the National Wages Consultative Council (NWCC) reviewed the minimum wage at 2 or 3-year intervals. The minimum wage changes accounted for the country’s economy, ensuring that workers and their families were able to keep up.
The first minimum wage amendment came in 2016, when the NWCC increased the monthly minimum wage to RM1,000 – RM4.81 per hour – for Peninsular Malaysia, and RM920 – RM4.42 per hour – for Sabah, Sarawak, and the Federal Territory of Labuan.
The RM4.81 per hour rate amounted to a daily wage of RM57.69, RM46.15, and RM38.46 for a 4-day, 5-day, and 6-day work week, respectively, in Peninsular Malaysia.
For 4 days, 5 days, and 6 days of work in a week, the RM4.42 per hour rate was equal to RM53.08, RM42.46, and RM35.38 per day, respectively, for employees in Sabah, Sarawak, and the Federal Territory of Labuan.
After three years, in January 2019, the NWCC increased the monthly minimum wage to RM1,100 across the nation (RM5.29 per hour). This figure was adjusted to RM1,200 (RM 5.77 per hour) in February 2020, specifically for 16 city council and 40 municipal areas.
In early 2022, the Human Resources Minister in Malaysia removed the list of municipal and city council areas that had a monthly minimum wage of RM1,200. By May of the same year, a minimum wage of RM1,500 per month was declared for the entire country.
The minimum wage of RM1,500 per month was equal to RM7.21 per hour, and daily rates of RM86.54 for 4 days, RM69.23 for 5 days, and RM57.69 for 6 days of work in a week.
When broken down to an hourly scale, the monthly minimum wage of RM1,700 in Malaysia is equivalent to RM8.72 per hour. While the standard figure of RM1,700 per month is easy to implement for full-time employees, the hourly rate is necessary for compensating part-time workers.
The hourly minimum wage of RM8.72 translates to a daily wage of RM98.08, RM78.46, and RM65.38 for 4-day, 5-day, and 6-day work weeks, respectively.
Not all workers in Malaysia earn standard wages, as certain workers are paid per task, piece, or commission. In such cases, a worker’s wages for each task or project should be adjusted so that the total amount earned in a month is not less than RM1,700.
The Ministry of Human Resources in Malaysia recognised the need to properly classify occupations in the country. In 2020, the Malaysia Standard Classification of Occupations (MASCO) was created as a benchmark for classifying the country’s employment structure.
MASCO was created based on the International Standard Classification of Occupations (ISCO) by the International Labour Organisation (ILO). However, the details of MASCO are tailored to fit the specific structure and needs of Malaysia’s labour market.
According to MASCO, there are 10 major groups of occupations in the country, as shown in the table below:
| Group Number | Occupation Category |
|---|---|
| Major Group 1 | Managers |
| Major Group 2 | Professionals |
| Major Group 3 | Technicians and Associate Professionals |
| Major Group 4 | Clerical Support Workers |
| Major Group 5 | Service and Sales Workers |
| Major Group 6 | Skilled Agricultural, Forestry, Livestock and Fishery Workers |
| Major Group 7 | Craft and Related Trades Workers |
| Major Group 8 | Plant and Machine Operators and Assemblers |
| Major Group 9 | Elementary Occupations |
| Major Group 0 | Armed Forces |
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For each of the Major Groups in the table above, there are 4 classification tiers for workers, making a total of 5 tiers under MASCO. Each classification is represented by a code, with varying digits, as shown below:
| Classification | Number of Digits |
|---|---|
| Major Group | 1-digit code |
| Sub-Major Group | 2-digit code |
| Minor Group | 3-digit code |
| Unit Group | 4-digit code |
| Small Unit Group | 6-digit code |
By assigning each tier under each category a unique code, MASCO makes it easy to identify workers in Malaysia and their occupation. Here’s an example of the code structure for a Physicist in Malaysia.
| Group | Occupation Title | Code |
|---|---|---|
| Major Group | Professional | 2 |
| Sub-Major Group | Science and Engineering Professionals | 21 |
| Minor Group | Physicists, Chemists and Related Professionals | 211 |
| Unit Group | Physicists and Astronomers | 2111 |
| Small Unit Group | Physicist | 2111-01 |
If you want to hire employees in Malaysia in diverse fields, an Employer of Record handles the process on your behalf without you needing to register a company in the country.
The Malaysia Standard Classification of Occupations (MASCO) is important for employers in Malaysia because it helps to plan and determine wage structures for Malaysian workers while maintaining balance and equality in the country’s workforce.
Companies and businesses that employ workers in roles classified under MASCO are required to pay the minimum wage of RM1,700.
The increase in the minimum wage in Malaysia is expected to improve the standard of living for workers in the country. With more earnings, Malaysian employees get higher purchasing power and are able to afford better products and services.
The effect of the minimum wage is particularly impactful for low-income workers, as it helps to improve their social welfare.
A potentially negative effect that Malaysia’s minimum wage can have on the populace is inflation in the cost of products. The increase in the country’s minimum wage means that Malaysian businesses have to pay their workers more.
To cope with the increased salary requirements, businesses might increase the cost of products, and this can potentially cancel out the increased purchasing power for residents.
There are mixed opinions on how an increase in the minimum wage can affect unemployment rates in Malaysia.
On the positive side, the increase in the minimum wage will spur more workers to get into the workforce, and this can boost the country’s employment rate.
On the negative side, the minimum wage increase means that employers need to pay workers more. As a result, some employers find ways to replace workers with automation or simply hire fewer workers, in a bid to reduce salary costs.
As a country in South East Asia, Malaysia’s neighbouring countries include Vietnam, Thailand, the Philippines, and Singapore.
Note that Malaysia’s monthly minimum wage of RM1,700 is currently equivalent to $403.08. Also, the daily wages, which range from RM65.38 to RM98.08, are $15.50 to $23.26, respectively.
Malaysia’s monthly RM1,700 ($403.08) minimum wage is notably higher than Vietnam’s monthly minimum wage, which ranges from VND 3,450,000 to 4,960,000 ($130.61 to $187.77).
On a daily earnings scale, Malaysia’s RM65.38 to RM98.08 ($15.50 to $23.26) is more than Thailand’s THB 337 to 400 ($10.64 to $12.62), and PHP 658 to 695 ($11.62 to $12.28) in the Philippines. Singapore does not have an official minimum wage.
When you consider the entire continent of Asia, Malaysia is far outpaced by the stronger economies of South Korea and Japan.
South Korea’s hourly minimum wage is KRW 10,030 ($7.23) and Japan’s is JPY 1,121 ($7.59). These are much higher figures than Malaysia’s RM8.72 ($2.07) per hour.
At the other end of the earning spectrum, Asian countries, Bangladesh and Myanmar, earn very little compared to Malaysia. The monthly minimum wage in Bangladesh is 12,500 BDT ($102.75), while Myanmar’s daily rate is MMK 4,800 to 6,800 ($2.29 to $3.24).
While Malaysia’s minimum wage exceeds that of some Asian countries, there is still a large gap between Malaysia and European countries in terms of earnings.
As of July 2025, the minimum wage for countries in the EU ranges from €551 ($647.44) per month for Bulgaria to €2,704 ($3177.29) per month for Luxembourg, respectively. These numbers are much higher than Malaysia’s $403.08 per month.
The authorities of Malaysia review the minimum wage frequently (every two to three years) and make changes to the minimum wage amount when necessary. These frequent reviews are necessary to ensure that the minimum wage at any given time accurately reflects the economic demands that Malaysians face.
In late 2023, Malaysia announced a Progressive Wage Policy (PWP) that was aimed at improving skills, productivity, and wages among employees of micro, small, and medium enterprises (MSMEs).
Employers of businesses under the PWP are aided in building skills and productivity, leading to higher wages. The PWP is not compulsory for all employers – companies can register voluntarily.
The pilot phase of the PWP was launched from June 2024 to December 2024. The Malaysian government provided additional funding for the PWP in 2025, extending the number of workers to benefit from the policy.
The Ministry of Human Resources is particular about enforcing the monthly minimum wage of RM1,700 for all employees in Malaysia.
In an announcement in July 2025, the ministry announced August 1, 2025, as the expiry date of the deferment for employers with fewer than 5 employees. After August 1, 2025, all employers were expected to align with the new minimum wage, regardless of their number of employees.
Employers who do not comply with the minimum wage are violating the National Wages Consultative Council (NWCC) Act of 2011. The authorities attach a fine of up to RM10,000 to be paid by an employer for each employee they do not pay up to the minimum wage.
After the initial RM10,000 fine per employee, there is an additional RM1,000 fine for each extra day an employer violates the law. If an employer repeatedly violates the minimum wage act, they can be charged up to RM20,000 or face a five-year imprisonment sentence.
Since its inception in 2013, the minimum wage in Malaysia has been a necessary tool for stability and equality among workers in the country. Workers enjoy better earnings, leading to improved social welfare in all regions of Malaysia.
The minimum wage figure has been reviewed every two or three years since 2013. Considering that the current minimum wage of RM1,700 was put in place in 2025, employers and employees can expect a minimum wage review by 2027 or 2028.
Starting from January 1, 2025, the minimum wage rate for full-time workers in Malaysia is RM1,700 per month.
The Ministry of Human Resources in Malaysia considers factors like a decent standard of living, higher work productivity, and social security for workers and their families when adjusting the minimum wage.
Since 2022, there has been no difference between the minimum wage in various Malaysian states. Before 2022, states in Peninsular Malaysia had a slightly higher minimum wage than Sabah, Sarawak, and the Federal Territory of Labuan.
The minimum wage for part-time workers in Malaysia is calculated at a rate of RM8.72 per hour, based on the RM1,700 monthly minimum wage.
