Employ in Malaysia with ease.

Remote makes employment in Malaysia easy. With our localized contracts, easy invoice management, and best-in-class compliance, you can grow your global team with confidence.

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  • Availability

    Remote-Owned Local Entity

    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.

  • Capital city

    Kuala Lumpur

  • Currency

    Malaysian ringgit
    (RM, MYR)

  • Languages spoken

    Malay

  • Services available

    Services available:

    • Employer of Record
    • Contractor Management

Facts & Stats

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.

  • Capital city

    Kuala Lumpur

  • Currency

    Malaysian ringgit
    (RM, MYR)

  • Languages spoken

    Malay

  • Population size

    32,730,000 (est. 2020)

  • Ease of doing business

    Very easy

  • Cost of living index

    39.51 (2021)

  • Payroll frequency

    Monthly

  • VAT - standard rate

    6%

  • GDP - real growth rate

    4.3 (2019)

Grow your team in Malaysia with Remote

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.

Risks
of misclassification

Malaysia, like many other countries, treats self-employed individuals or contractors and full-time workers differently and there are specific risks associated with contractor misclassification.

Employing in Malaysia

Employment regulations in Malaysia are spelled out across several government statutes such as:

  • The Employment Act of 1955
  • The Industrial Relations Act of 1967
  • Trade Unions Act of 1959
  • Employees Provident Fund Act of 1991
  • Employees’ Social Security Act of 1969
  • Occupational Safety and Health Act of 1994, etc.

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.

Competitive benefits package 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:

  • Health Insurance
  • Dental Insurance
  • Vision Insurance
  • Mental Health Support
  • Pension or 401(K)
  • Life and Disability Insurance

Calculate the cost to hire an employee
in Malaysia

Taxes in Malaysia

Learn how employment taxes and statutory fees affect your payroll and your employees’ paychecks in Malaysia.

  • Employer taxes

    • 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)

  • Employee taxes

    • 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)

  • Personal income tax rates (all in MYR - Malaysian Ringgit)

    • 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

Types of leave

Paid Time Off

Employees are entitled to paid time off in proportion to their tenure working with an employer’s organization.

  • Up to two years of employment: 8 days off per year
  • 2 - 5 years: 12 days off per year
  • 5+ years: 16 days off per year

Public Holidays

There are six obligatory public holidays and 10 optional public holidays, and employers are expected to observe at least half of the latter.

Sick Leave

Employees accrue sick leave according to their tenure with an employer, and paidsick leave can last up to 22 days annually.

  • Up to two years of employment: 14 days per year
  • 2 - 5 years: 18 days per year
  • 5+ years: 22 days per year

Employees are entitled to a maximum of 60 paid sick days if they are hospitalized, inclusive of the standard sick leave entitlement mentioned above.

Maternity Leave

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).

Paternity Leave

There’s no statutory paternity leave for private employees under Malaysian law, but government employees get anywhere from 7-14 days of paternity leave.

Bereavement Leave

1 - 3 days consecutive working days off as compassionate leave in the event of the death of an immediate family member.

Adoption Leave

Adoptive parents are entitled to 15 days of leave, from the day their child is handed over to their legal custody.

Employment termination

Termination process

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.

Notice period

There is no stipulated notice period required under Malaysian employment law.

Severance pay

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.

  • Up to two years of employment: 10 days pay for each year of service
  • 2 - 5 years: 15 days pay for each year of service
  • 5+ years: 20 days pay for each year of service

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