Surprising fact: the legal monthly floor was set at RM1,700 on Dec 4, 2024, yet many entry roles start well above that level.
The Minimum Wages Order gives clear monthly, daily and hourly anchors: RM65.38 for six-day weeks, RM78.46 for five-day weeks, RM98.08 for four-day weeks, and RM8.72 per hour.
You will see how this floor links to market pay for skilled roles — from technicians to engineers and creative designers — and how those figures shape hiring, employees expectations and local economic growth.
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Key Takeaways
- The legal floor sets clear monthly, daily and hourly rates that affect wage planning.
- Market pay often exceeds the floor for skilled and technical roles, so benchmark offers carefully.
- Separate headline pay from basic pay to compare offers accurately for any job.
- Policy updates influence employment trends and hiring decisions across sectors.
- Use the official breakdowns to guide scheduling, overtime and part-time arrangements.
What “basic salary in Malaysia” really means versus minimum wage
Know which elements of an offer are legally counted as wages and which are fringe benefits. The Employment Act 1955 treats wages as the cash paid for service and excludes perks like housing, food, utilities, employer pension contributions, travel allowances, reimbursements, end-of-service gratuities, and annual bonuses.
Basic pay, allowances, and total compensation explained
When you review a pay offer, separate the guaranteed cash component from allowances and perks. That clear split helps both employer and employees avoid disputes and keeps contracts compliant.
Why the minimum wage is a legal floor, not a market average
The minimum wage malaysia set at RM1,700 is a statutory baseline phased through february 2025 and later stages. Use it as a compliance anchor, not the sole benchmark for hiring skilled roles. Market rates for many positions will exceed this floor.
- List the cash wage for service in contracts and show which items are excluded.
- Note interns are generally not covered by the National Wages Consultative Council Act 2011.
- Draft clear contract language on roles, hours, and compensation components.
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Minimum wage Malaysia 2025 at a glance: RM1,700 and who it covers
From February to August 2025, the Minimum Wages Order 2024 (P.U.(A) 376/2024), gazetted Dec 4, 2024, introduces a staged RM1,700 per month floor you must plan for.
Effective dates
Phase 1 – Feb 1, 2025: the rate takes effect for employers with five or more employees and for MASCO-classified employers regardless of headcount.
Phase 2 – Aug 1, 2025: all remaining employers must implement the new rate then. Eligible small employers may keep RM1,500 until that August date.
Coverage rules
The five employees threshold triggers early compliance. MASCO employers must apply the new floor even if they have fewer than five staff.
Who is excluded
Domestic servants remain excluded. Foreign workers and most other workers are included, so review your payroll and contracts now.
- Daily / hourly equivalents: RM65.38 (6-day), RM78.46 (5-day), RM98.08 (4-day), RM8.72 per hour.
- Action: audit your current salary structure and update payroll before each phase.
Whatsapp me for more info +6019-3156508. For a detailed guide, see minimum wage 2025 details.
Timeline you need to know: from February 2025 to August 2025
A clear timetable helps you avoid last-minute payroll errors when the new rates kick in. Use this timeline to schedule approvals, staff notices, and system updates so nothing slips through.
Phase one — effective february 2025: From Feb 1, 2025 the RM1,700 wage applies to employers with five or more employees and to MASCO-classified employers regardless of headcount. If you are in this group, start configuring payroll now and draft contract addendums for affected workers.
Phase two — nationwide implementation
Phase two — effective august 2025: On Aug 1, 2025 the RM1,700 rate applies to all employers. Small employers with fewer than five staff (non-MASCO) may continue with RM1,500 until this date. Confirm which category your employer falls into to set lead times for approvals and cashflow planning.
“Sequence your wage adjustments, test payroll calculations, and notify staff well before each effective date.”
- Align payroll cycles and pro-rate wages if pay periods cross the effective dates.
- Map required system adjustments and record-keeping actions to avoid compliance gaps.
- Translate monthly rates into daily and hourly equivalents for shift and part-time rosters.
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How to calculate wages: monthly, daily, and hourly breakdowns
Practical conversions from RM1,700 per month to daily and hourly values keep your payroll compliant and clear.
Use these official figures from the Minimum Wages Order 2024 to convert the new wage for rostering and budgeting.
RM1,700 → daily rates for different workweeks
Apply the following daily equivalents to match typical weekly patterns:
- 6-day week: RM65.38 per day
- 5-day week: RM78.46 per day
- 4-day week: RM98.08 per day
Hourly rate considerations for shift and part-time roles
The official hourly figure is RM8.72. Configure your payroll systems to apply RM8.72 correctly for shifts and flexible schedules.
Tip: keep rounding rules consistent to avoid underpayment disputes and simplify overtime calculations.
- Compute per month to daily and hourly conversions so rosters, OT rates, and part-time arrangements align with law.
- Configure payroll systems to use RM8.72 per hour and test edge cases where pay periods cross the effective date.
- Present salaries clearly to candidates and staff, showing which allowances and bonuses are discretionary and which count toward minimum wages.
- Build a calculator-ready approach that respects the minimum figures while allowing market premiums by role.
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Employer compliance checklist and payroll systems updates
Prepare a clear compliance plan now so payroll and contracts match the new statutory rates.
Quick actions: confirm whether your organisation falls under the Feb 1 or Aug 1 phase. Update payroll systems to RM1,700 and set daily/hourly equivalents (RM65.38, RM78.46, RM98.08, RM8.72 per hour).
Contract addendums, payroll configuration, and record-keeping
Issue contract addendums that state the new wage and effective date. Obtain signed acknowledgements and store copies for audit. Domestic servants remain excluded; foreign workers are included.
Budgeting for increased labor costs and managing business expenses
Project the impact on monthly costs and map increases to departments. Time adjustments with revenue cycles to protect cash flow.
- Confirm phase, adjust wage settings, issue addendums, obtain signatures, keep records.
- Update payroll systems to avoid miscalculations and backpay.
- Train HR and finance teams to reduce processing errors.
- Run scenario planning to measure effects on margins and hiring pace.
“Document every change and test payroll runs before the effective date.”
| Item | Action | Deadline |
|---|---|---|
| Phase identification | Classify workforce and mark effective date | Immediate |
| Payroll update | Set RM1,700 and hourly/daily rates; test runs | Before phase effective date |
| Contracts | Issue addendums and collect signatures | Within 14 days of update |
| Budgeting | Forecast costs and adjust cashflow plans | Quarterly review |
For step-by-step payroll guidance, see our payroll process and compliance guide. Whatsapp me for more info +6019-3156508.
Allowances, bonuses, and what counts toward wages in Malaysia
Understanding what counts toward the statutory floor protects your organisation from underpayment claims.
Excluded items you must not count
These items do not count toward the minimum wage and must be paid on top of guaranteed cash:
- Value of housing, food, fuel and utilities
- Approved amenities and employer pension or provident contributions
- Travel allowances and reimbursements for job-related expenses
- End-of-service gratuities and annual bonuses
What can be included in a contract of service
The only element that counts as wages is the fixed cash pay stated in the contract of service.
Design offers so the guaranteed cash meets the minimum wage on its own. Keep allowances and variable perks separate.
Practical tips: Draft contract templates that name the fixed pay, list excluded items, and explain how bonuses and reimbursements are treated. Present total compensation clearly so employees see guaranteed pay versus perks.
“Do not rely on bonuses or reimbursements to meet the statutory floor; document every element in the contract.”
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How the new minimum wage impacts employees and workers
You should know when RM1,700 applies to your pay and how to check it. The rule takes effect per employer phase, so your pay may change on the Feb or Aug date that fits your workplace category.
Your rights and verifying pay
You have the right to receive at least RM1,700 if your employer falls under the applicable phase. Verify your wage using RM8.72 per hour and the daily equivalents for 4-, 5- and 6-day weeks.
How to report non-compliance
If your pay does not match the floor, file a complaint with the Department of Labour. Keep your contract of service and payslips as evidence. That documentation speeds investigations.
| Issue | What to check | Action |
|---|---|---|
| Underpayment | Monthly, daily, hourly rates | Gather payslips; lodge complaint |
| Coverage | Foreign workers included; domestic servants excluded | Confirm status with HR |
| Dispute | Contract of service details | Request written clarification; escalate if needed |
This change supports a baseline for living while allowing market rates above the floor for skilled roles. If discrepancies arise, discuss adjustments with HR and use the official rates to support your case.
“Document your payslips and contracts, then report promptly to the Department of Labour.”
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Hiring and retaining top talent: don’t treat RM1,700 as a ceiling
Treat the new minimum wage as a legal floor, not your market offer. You must position pay to attract top talent and meet role expectations.
Starting salary guidelines by MASCO and sector signals
The Ministry of Human Resources gives MASCO-based starting ranges to guide employers. For example, an industrial/production technician is around RM2,290; a mechanical engineer about RM3,380; a creative content designer roughly RM2,985.
Steven Sim stressed that the minimum wage should not be used as a graduate or skilled starting point.
Progressive Wage Policy (PWC) and upskilling for growth
The PWC pilot has RM200 million to link pay progression to skills and performance. Use this to design career paths that support retention and growth.
- Benchmark offers to MASCO ranges so your salaries outcompete the floor where skills demand it.
- Recalibrate hiring so RM1,700 remains a compliance base and not the top of your pay band.
- Tie pay steps to learning budgets and business development goals to keep talent engaged.
“Design pay bands that reward skills and performance, not just meet the statutory minimum.”
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Historical context: Malaysia minimum wages and adjustments over the years
Historic adjustments reveal the policy logic behind each rise and its impact on firms and staff.
From 2016–2017 the floor began at RM1,000 for Peninsular areas and RM920 elsewhere. By 2018 the rate moved to RM1,050 nationwide.
Across 2019–2020 policy allowed higher floors for towns (RM1,200) and lower for rural districts (RM1,100). On May 1, 2022 businesses in major towns with five or more staff saw RM1,500 applied.
That RM1,500 became nationwide on Jan 1, 2023. The next increases took effect Feb 1, 2025 for employers with ≥5 employees and MASCO firms, with full rollout on Aug 1, 2025.
- You will see how malaysia minimum wages evolved over the years through staged increase rounds.
- You will understand how adjustments moved the market from split regional rates toward a unified floor.
- You will connect this cadence to economic growth and how businesses and workers responded.
“Reviews typically occur every two years to balance cost pressures, productivity and fiscal conditions.”
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Sector examples and roles: where salaries typically start above minimum
Market forces push many roles to begin above the legal floor because skills and regional costs differ. You should compare typical offers to the new minimum so hiring stays competitive.
Industrial and production technician
The Ministry of Human Resources lists about RM2,290 for this role. That figure sits clearly above the malaysia minimum and shows how manufacturing sectors pay for practical skills.
Mechanical engineer
Entry mechanical engineers typically start near RM3,380. Firms with complex products pay premiums to secure technical talent.
Creative content designer
Creative roles often begin around RM2,985. Agencies and digital teams bid higher where experience and portfolio quality matter.
- You will compare these salaries to see why many sectors price talent above the floor.
- You will connect regional cost of living and business development to pay bands.
- You will map how product complexity and skill scarcity push offers beyond the new minimum.
| Role | Typical starting pay | Relation to new minimum |
|---|---|---|
| Industrial/Production Technician | RM2,290 per month | Well above RM1,700; market premium for skills |
| Mechanical Engineer | RM3,380 per month | High premium; reflects technical demand |
| Creative Content Designer | RM2,985 per month | Above floor; shaped by portfolio and region |
Use role-by-role benchmarks to set structured ranges that leave room for growth while aligning to policy.
Tip: tie offers to employer brand and hiring timelines to improve acceptance rates.
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结论
Start by mapping which workers the staged increase affects and when it hits payroll. Confirm whether your organisation falls under february 2025 (five employees and MASCO) or the full rollout on august 2025. Update systems to reflect the wage 1,700 and the official daily and hourly conversions.
Issue contract addendums, keep clear records, and explain what does not count toward the new minimum wage — housing, utilities, travel reimbursements, gratuities and bonuses must sit above the floor. Balance compliance with competitiveness by benchmarking pay for talent and top talent.
Factor cost living and projected costs into budgets so business growth and retention stay aligned. For tailored help and payroll checklists, Whatsapp me for more info +6019-3156508.
FAQ
What does “basic salary in Malaysia” mean compared to minimum wage?
The term refers to your fixed monthly pay before allowances and bonuses. Minimum wage is a legal floor—the lowest monthly amount employers must pay eligible workers. Your total compensation can include allowances for housing, transport, and performance bonuses, but not all of these count toward the statutory minimum.
Which components typically count toward wages and which are excluded?
Basic pay, fixed allowances stated in the contract, and regular commissions usually count. Exclusions commonly include employer-paid housing, utilities, travel reimbursements, and one-off bonuses. Check your employment agreement and payroll policy to confirm what your employer includes.
What is the new minimum wage for 2025 and when does it take effect?
The statutory minimum monthly amount was set at RM1,700 with phased enforcement. The first phase began in February 2025 for qualifying employers; broader nationwide application followed in August 2025. Verify the exact effective date for your workplace based on employer size and sector.
Who must comply first under the phased rollout?
Employers with five or more employees and those classified under MASCO categories had to implement the new rate in the first phase. Smaller businesses and other sectors became subject to the minimum in the later phase when the wage applied nationwide.
Which workers are not covered by the new minimum?
Certain groups are excluded, such as domestic servants and other specially exempted roles under labor regulations. Short-term trainees, interns, or sector-specific exemptions may also apply. Confirm status with your employer or the relevant labor authority.
How do you convert RM1,700 into daily and hourly rates?
Monthly-to-daily and hourly conversions depend on your agreed workweek. For a six-day week, divide by the typical monthly workdays; for five- or four-day weeks, adjust accordingly. Hourly rates use your contracted daily hours. Your payroll team should provide precise breakdowns for your role.
How should employers update payroll systems to remain compliant?
Employers must update contracts, adjust payroll configurations to reflect the new floor, track allowances separately, and keep accurate records of hours and payments. Perform system tests, notify staff, and document changes to avoid disputes and fines.
How can businesses budget for the increased labor costs?
Review wage bills, revise pricing, optimize staffing or schedules, and consider productivity improvements. Factor in higher employment costs during forecasting and monitor cash flow. Small firms may phase adjustments or apply for government support where available.
Does the RM1,700 figure limit how much you can pay new hires?
No. The minimum is a floor, not a ceiling. To attract and retain talent you should offer competitive packages—base pay above the minimum, benefits, training, and bonuses—to reflect market demand for skills and responsibilities.
What should you do if your employer pays less than the statutory minimum?
Raise the issue with human resources first and request clarification in writing. If unresolved, file a complaint with the labor department or the appropriate enforcement agency. Keep pay slips, contracts, and communication as evidence when reporting non-compliance.
How do allowances and bonuses affect hiring decisions and retention?
Employers often use allowances and bonus structures to make roles more attractive without inflating base pay. For you, ask for clear terms in the contract that state which payments are regular and which are discretionary, and negotiate for total compensation reflecting your skills.
What are typical starting levels in sectors that often pay above the minimum?
Some sector examples include industrial technician roles around RM2,290, mechanical engineering positions near RM3,380, and creative content design roles around RM2,985. Levels vary by experience, location, and employer size, so use job market data when negotiating.
How have minimum wages changed over the years and why does that matter to you?
Minimum rates have been adjusted periodically to reflect cost of living, inflation, and economic conditions. These changes affect purchasing power, hiring costs, and business planning. Stay informed through official announcements to understand how adjustments influence your employment terms.