Minimum Hourly Wage in Malaysia 2025: Latest Rates & Calculation

With Malaysia’s minimum wage set to RM1,700 per month starting in 2025, businesses must prepare for higher labor costs while maintaining productivity and competitiveness.

Many employers wonder how to adjust their financial planning, what exemptions exist, and what penalties they could face for non-compliance.

This article breaks down everything employers need to know about the new minimum hourly wage in Malaysia, from payroll updates to industry-specific wage considerations.

What is the Minimum Wage in Malaysia?

The minimum wage is the lowest amount an employer can legally pay employees for their work.

The Malaysian government sets the minimum wage to help workers meet their basic needs while balancing economic growth.

Current Minimum Wage Rates for 2025

As of February 1, 2025, the minimum monthly wage in Malaysia is RM1,700 for all workers, regardless of industry or location.

Businesses with fewer than five employees were given additional time to adjust and will need to comply with this rate starting August 1, 2025.

This increase follows the 2023 minimum wage of RM1,500, which is applied across the country.

Monthly vs. Hourly Minimum Wage

For employers who pay wages based on hours worked, the minimum hourly wage is calculated based on workdays per week.

Monthly Wage	Days Worked per Week	Daily Wage	Hourly Wage
RM1,700	6	RM65.38	RM8.72
RM1,700	5	RM78.46	RM8.72
RM1,700	4	RM98.08	RM8.72

This means that regardless of whether an employee works a 4-day, 5-day, or 6-day workweek, the minimum hourly rate remains RM8.72 per hour.

History of the Minimum Wage in Malaysia

Malaysia introduced the Minimum Wage Order (MWO) in 2013, setting the first national minimum wage at RM900 per month in Peninsular Malaysia and RM800 in Sabah and Sarawak.

Over the years, the minimum wage has been revised multiple times to reflect economic conditions and the cost of living.

Year	Minimum Wage (Monthly)
2016 & 2017	RM1,000 (Peninsular Malaysia), RM920 (Elsewhere)
2018	RM1,050
2019 & 2020	RM1,100 (Rural), RM1,200 (Major towns)
2022	RM1,500 (For businesses with 5+ employees in major towns)
2023	RM1,500 (Entire country)
2025	RM1,700 (Nationwide)

The government typically reviews the minimum wage every two years based on factors such as inflation, economic growth, and industry feedback.

What is the Hourly Minimum Wage in Malaysia?

Employees who are paid hourly must receive at least RM8.72 per hour based on the new 2025 minimum wage structure.

How Overtime and Public Holidays Affect Hourly Pay

If employees work overtime, their hourly wage increases based on the Employment Act 1955:

1.5x the hourly rate for overtime on normal working days.
2x the hourly rate for work on rest days.
3x the hourly rate for work on public holidays.

For example, if an employee earning RM8.72 per hour works overtime, their pay will be:

RM13.08 per hour for overtime work.
RM17.44 per hour on rest days.
RM26.16 per hour on public holidays.

This is an important consideration for businesses that rely on shift workers or operate on weekends.

Who is Eligible for the Hourly Minimum Wage in Malaysia?

All full-time and part-time employees under a contract of service are entitled to the minimum wage. This includes:

Permanent and contract employees.
Full-time and part-time workers.
Employees are paid based on piece rate, commission, or task-based wages.

Employees working irregular hours must still receive at least RM8.72 per hour, even if their total working hours vary each week.

Who is Exempted from Earning the Hourly Minimum Wage in Malaysia?

Some workers are not covered under the minimum wage laws. These include:

Domestic helpers such as maids, babysitters, and personal drivers.
Apprentices undergoing structured training programs.
Interns who are not under a formal employment contract.
Small businesses with fewer than 5 employees (exempt until August 2025).

List of Hourly & Minimum Wage in Each State

Malaysia has a national minimum wage, meaning the rate applies uniformly across all states.

Previously, there were differences between urban and rural areas, but as of 2025, the RM1,700 minimum wage applies nationwide.

For employees compensated on an hourly basis, this adjustment translates to approximately RM8.72 per hour.

In terms of daily wages, depending on the number of working days per week, the breakdown is as follows:

Six-day workweek: RM65.38 per day
Five-day workweek: RM76.92 per day
Four-day workweek: RM96.15 per day

How Does the Minimum Wage in Malaysia Compare to Surrounding Countries?

Malaysia’s minimum wage is higher than some neighboring countries but lower than others.

Country	Minimum Monthly Wage (USD Equivalent)
Malaysia	RM1,700 (≈$364)
Indonesia	IDR4,900,000 (≈$323)
Thailand	THB354/day (≈$225/month)
Vietnam	VND4,680,000 (≈$200)
Cambodia	KHR823,111 (≈$200)
Singapore	No national minimum wage

While Malaysia’s minimum wage is competitive within ASEAN, employers must consider other factors like cost of living, productivity, and business expenses when planning wages.

Who is Responsible for Upholding Minimum Wage Laws in Malaysia?

The National Wages Consultative Council (NWCC) advises the government on wage rates.

While, the Ministry of Human Resources (MOHR) and Department of Labour (JTKSM) enforce compliance.

JTKSM investigates wage disputes, and the Industrial Court handles legal cases involving unpaid wages.

Employers must comply with the Minimum Wages Order by ensuring:

Employees receive at least RM1,700 monthly or RM8.72 per hour.
Payroll records reflect the updated wage rates.
Employees are informed of their wage entitlements.

Workers who are underpaid can report complaints to JTKSM, file claims in the Labour Court, or seek support from trade unions.

Employers found guilty may face penalties or be required to compensate employees.

Malaysia enforces strict wage laws to protect workers and maintain fair labor practices, making compliance essential for all businesses.

Penalties for Violating Minimum Wage Laws in Malaysia

The penalties for failing to comply with minimum wage laws are outlined as follows:

Offense	Penalty
First Offense	A fine of up to RM10,000 per employee. The court may also require the employer to pay the difference between the minimum wage and the employee’s basic wage.
General Penalty	A fine of up to RM10,000 for each violation.
Penalty for Continued Offense	A daily fine of up to RM1,000 for continuing the offense after a conviction.
Penalty for Repeated Offense	A fine of up to RM20,000 or imprisonment for up to 5 years.

Beyond financial penalties, repeated violations may lead to further legal actions, including business restrictions or blacklisting from government tenders.

How Are Complaints and Enforcement Actions Handled?

Employees who are underpaid can file complaints with the Department of Labour (Jabatan Tenaga Kerja, JTKSM). The enforcement process typically follows these steps:

Submit complaints through JTKSM offices, online portals, or helplines. The complaint should include details of unpaid wages and proof of employment.
Labor officers may conduct workplace inspections and review payroll records to determine whether an employer has violated the wage law.
If violations are found, employers will receive notices to correct the wage issue and make necessary payments to employees.
If employers fail to comply, they may be prosecuted under the Employment Act 1955, which can result in fines or legal proceedings.
Courts can order employers to pay back wages owed to workers, ensuring employees receive the correct compensation.

How Often Does the Minimum Wage in Malaysia Increase?

Malaysia’s minimum wage is reviewed every two years by the National Wages Consultative Council (NWCC) to reflect economic conditions and maintain a balance between fair wages and business sustainability.

Factors Influencing Wage Adjustments

The government considers two key criteria before making changes:

Base Criteria:
- Poverty Line Income (PLI): Ensuring wages cover basic living costs.
- Median Wage: Keeping salaries competitive nationwide.
Adjustment Criteria:
- Consumer Price Index (CPI): Inflation’s impact.
- Productivity Growth (P): Assessing business capacity to support wage hikes.
- Real Unemployment Rate (UE): Balancing wage growth with job stability.

Wage Review Cycle

The last increase, in 2023, set the minimum wage at RM1,500, and the 2025 adjustment raised it to RM1,700. Future adjustments will depend on economic trends.

FAQ

When will the minimum wage increase in Malaysia?

The next minimum wage increase in Malaysia will take effect in two phases:

1 February 2025: Employers with five or more employees and businesses under MASCO classifications must start paying a minimum monthly wage of RM1,700.
1 August 2025: The RM1,700 minimum wage will apply to all employers, including those with fewer than five employees.

The Malaysian government reviews the minimum wage every two years, meaning the next potential increase may be discussed in 2027, depending on economic conditions and labor market needs.

How do I calculate hourly pay for part-time employees?

The hourly wage rate is determined by dividing the monthly minimum wage by the total working hours in a month.

For 2025, the minimum hourly wage is RM8.72, calculated as:

Monthly wage (RM1,700) ÷ 195 hours (for a 6-day workweek) = RM8.72 per hour
This rate applies whether an employee works 4, 5, or 6 days per week.

To calculate wages for a part-time employee:

Multiply total hours worked per week by RM8.72 to determine weekly pay.
Multiply weekly pay by four to get an estimated monthly wage.

Example:
A part-time employee working 20 hours per week would receive:

20 hours x RM8.72 = RM174.40 per week
RM174.40 x 4 weeks = RM697.60 per month

What happens if an employer does not comply with minimum wage laws?

Employers who fail to comply with the minimum wage law face strict penalties under the Employment Act of 1955.

Offense	Penalty
First Offense	A fine of up to RM10,000 per employee. The court may also require the employer to pay the difference between the minimum wage and the employee’s basic wage.
General Penalty	A fine of up to RM10,000 for each violation.
Penalty for Continued Offense	A daily fine of up to RM1,000 for continuing the offense after a conviction.
Penalty for Repeated Offense	A fine of up to RM20,000 or imprisonment for up to 5 years.

Additionally, the court may order the employer to pay the wage difference to affected employees.

Employees can file a complaint with the Department of Labour (JTKSM), which may conduct inspections and investigations into non-compliant businesses.

Are there different wage rates for different industries?

No, Malaysia has a national minimum wage, meaning the RM1,700 monthly wage (or RM8.72 hourly rate) applies across all industries.

However, certain job sectors have different wage structures due to industry-specific regulations, such as:

Construction & Manufacturing: Paid by piece rate or task-based wages.
Service Industry (Retail, F&B, Hospitality): Commissions or service charges in addition to the base salary.
Shift-Based Industries (Healthcare, Security, Essential Services): Overtime and shift allowances.

Can employers apply for exemptions from minimum wage requirements?

Yes, but only in specific cases. Currently, the Minimum Wages Order 2024 does not apply to:

Domestic workers (e.g., maids, personal drivers, live-in caregivers).
Apprentices in formal training programs.
Interns who are not in formal employment contracts.
Small businesses with fewer than five employees. They are exempt until August 1, 2025, after which they must comply with the RM1,700 minimum wage.

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