Malaysia’s minimum wage is getting a major update in 2025 — a change that will affect both employers and employees across all industries.
The government has announced an increase in the national minimum wage to RM1,700 per month, aligning with efforts to improve living standards and reduce income gaps.
This update is part of the Minimum Wages Order 2024, and it officially takes effect in two stages starting February 2025. Whether you’re managing a company or working in one, understanding these updates is essential to stay compliant and financially prepared.
Starting 1 February 2025, the minimum monthly wage in Malaysia increases from RM1,500 to RM1,700.
Here’s how the implementation will roll out:
This phased approach gives smaller businesses time to adjust before full implementation in August 2025.
| Working Days per Week | Daily Minimum (RM) | Hourly Minimum (RM) |
|---|---|---|
| 6 days | 65.38 | 8.72 |
| 5 days | 78.46 | 8.72 |
| 4 days | 98.08 | 8.72 |
These rates apply to both full-time and part-time employees, ensuring fair compensation across different work arrangements.
The new wage order reflects Malaysia’s continued effort to:
For employees, it means more income security and better financial stability.
For employers, it means revising payroll systems, budgets, and compliance processes to meet new legal requirements.
Included under the new wage rule:
Exempted categories may include:
It’s important for employers to review their workforce categories carefully to ensure they comply with the latest wage order.
Start by checking which employees are currently earning below RM1,700.
Update your salary structure to reflect the new minimum wage and ensure allowances or bonuses don’t replace the base pay requirement.
A wage increase affects not just basic pay but also:
Plan your monthly cash flow accordingly to avoid financial strain later.
Be transparent. Inform your employees early about any pay adjustments or timeline changes. This builds trust and helps reduce confusion when the policy takes effect.
All salary changes must follow Malaysia’s Employment Act and the Minimum Wages Order. Non-compliance may lead to fines up to RM20,000 or legal penalties.
This is why many businesses now prefer to use outsourced payroll services — to avoid costly errors.
Updating wages across an entire workforce can be challenging, especially for SMEs.
By partnering with a professional payroll services provider, businesses can:
Outsource payroll services providers ensure your company always stays compliant — even when wage laws change.
This is particularly useful for companies without an in-house HR or finance team.
An Employer of Record (EOR) acts as a legal employer on your behalf.
They handle everything from payroll processing to employee benefits and compliance while you focus on day-to-day business operations.
If your business hires remote or overseas employees in Malaysia, partnering with an Employer of Record ensures seamless payroll management under the new wage rules.
The minimum wage adjustment benefits workers across all industries, but employees should also take note of:
If you notice discrepancies, you can raise concerns with your HR department or the Department of Labour Malaysia (JTKSM).
The RM1,700 wage floor may not be the last increase. The government has indicated plans to review minimum wages more regularly, based on:
This means employers should adopt a long-term strategy for sustainable wage management — not just short-term compliance.
Investing in digital payroll systems or outsourced payroll services can make these transitions much smoother, ensuring future wage updates are handled automatically and accurately.
The 2025/2026 minimum wage update marks an important milestone for Malaysia’s workforce.
While it strengthens employee welfare, it also challenges employers to adapt their payroll and compliance systems efficiently.
By leveraging outsourced payroll services or partnering with an Employer of Record, businesses can stay compliant, reduce risk, and focus on growth — while employees enjoy fairer and more transparent pay.
As Malaysia continues to evolve its labour policies, understanding these changes early will help both employers and employees build a more sustainable and productive future together.
Stay compliant and confident with Malaysia’s new wage regulations.
Contact Crown Heritage Asia today to simplify payroll, compliance, and HR management with trusted experts —available across our branches in Kuala Lumpur, Johor Bahru, Penang, Muar, Perak, and Labuan.
