Malaysia Leave Entitlement for Employees (2025 Update)

After the 2023 amendments, all employees, regardless of their salary level, are now covered under the Act’s key leave provisions.

Having a good understanding of leave entitlements Malaysia 2025 is essential for every employer. Proper leave management ensures compliance with the Employment Act 1955 while fostering a fair, motivated, and productive workforce. Staying updated also helps avoid costly disputes, maintain workplace harmony, and promote employee satisfaction.

What Is Leave Entitlement in Malaysia?

Leave entitlement refers to an employee’s legal right to take time off from work for rest, sickness, maternity, paternity, or public holidays Malaysia employer obligations.

Under the Employment Act 1955 leave, employers must provide at least the statutory minimum leave entitlements, though many companies offer enhanced benefits as part of their internal HR policy.

The leave entitlements Malaysia apply to all employees in Peninsular Malaysia and Labuan, including those earning above RM4,000 (company policies may apply), while employees in Sabah and Sarawak are covered by the Sabah Labour Ordinance and Sarawak Labour Ordinance, respectively.

Why Is Leave Policy Important for Employers?

A clear and compliant leave policy helps employers:

Stay compliant with Malaysian labour laws.
Prevent disputes and maintain operational efficiency.
Ensure payroll accuracy when calculating leave pay or deductions.
Support employee morale and retention through transparency and fairness.

When employees understand their entitlements, HR can plan better, approve requests efficiently, and maintain smooth business continuity.

Standard Leave Types in Malaysia

Below is a breakdown of the main leave categories Malaysian employers must provide.

Annual Leave Malaysia

Annual leave allows employees to rest or attend to personal matters. The minimum statutory entitlement depends on the employee’s length of service:

Length of Service	Minimum Annual Leave Days
Less than 2 years	8 days
2–5 years	12 days
More than 5 years	16 days

Pro-Rated Leave

For employees who have not completed a full year of service, annual leave is calculated proportionally:

(Months of service ÷ 12) × Annual entitlement

Example:

An employee with 3 years of service resigns after 7 months
(7 ÷ 12) × 12 = 7 days of prorated annual leave.

Payment & Carry-Forward Rules

Paid at the employee’s ordinary rate of pay (basic wage + fixed allowances).
Employers may allow carry-forward or encashment of unused leave based on policy.
Leave must be granted within 12 months after the qualifying year, unless deferred for valid business reasons.

Medical/Sick Leave Malaysia

Employees are entitled to paid sick leave when medically unfit for work.

Length of Service	Paid Sick Leave (Non-Hospitalisation)
Less than 2 years	14 days
2–5 years	18 days
More than 5 years	22 days

Hospitalisation Leave

Up to 60 days per year (aggregate with normal sick leave).

Requirements

Notify the employer within 48 hours of absence.
Provide a valid medical certificate (MC) from a registered doctor or dentist.
Employers may request a second opinion from a panel clinic at their expense.

Maternity Leave Malaysia

Female employees are entitled to 98 consecutive days of paid maternity leave per confinement, as amended under the Employment (Amendment) Act 2022.

Eligibility

Employed for at least 90 days in the 9 months before confinement.
Must have fewer than 5 surviving children.

Employers cannot terminate an employee during her pregnancy or maternity leave except for misconduct, breach of contract, or business closure.

Paternity Leave Malaysia

Married male employees are entitled to 7 consecutive days of paid paternity leave for each confinement (up to 5 confinements).

Eligibility

Employed by the same employer for at least 12 months before the birth.
Must notify the employer 30 days before the expected confinement or as soon as possible after the birth.

Public Holidays

Under the public holidays Malaysia employer obligations (Employment Act), employees are entitled to 11 paid public holidays per year:

5 compulsory holidays:
- National Day
- Malaysia Day
- Birthday of the Yang di-Pertuan Agong
- Birthday of the State Ruler or Federal Territory Day
- Workers’ Day
6 additional holidays: Selected by the employer and displayed before the start of the year.

If employees work on a public holiday, they must be paid two days’ wages in addition to their regular pay.

Unpaid Leave Malaysia

Unpaid leave is not statutory but may be granted at the employer’s discretion. Common reasons include:

Extended illness after paid leave is used up
Personal or family emergencies
Further studies or travel

All unpaid leave arrangements should be formally documented and approved by HR.

Calculating Leave Pay and Deductions

Accurate payroll calculation is crucial for compliance.

Ordinary Rate of Pay (ORP)

ORP = Monthly Salary ÷ 26

Examples of Application

Paid leave days (annual, sick, maternity, etc.)
Encashment for unused leave
Pay adjustments for incomplete months

Excluded from ORP: accommodation value, travel allowance, bonus, and employer pension contributions.

Elective/Discretionary Leave in Malaysia

Apart from mandatory leave types, employers in Malaysia may offer additional discretionary leave based on company policy. It is not required by law, but is often provided to support employee welfare and flexibility.

Unpaid Leave Malaysia

Unpaid leave is granted when paid leave is exhausted or for extended personal reasons (study, travel, child care, etc). The salary calculation for unpaid leave is:

Salary adjustment = Monthly Wages × (Paid Days ÷ Calendar Days)

Emergency Leave Malaysia

It is a short-term leave for urgent personal matters (e.g., family emergencies) and typically treated as annual or unpaid leave.

Compassionate/Bereavement Leave Malaysia

This type of leave is time off to attend funerals or grieve immediate family members. The number of days depends on company policy and the relationship to the deceased.

Hajj Leave Malaysia

Muslim employees can have paid or unpaid leave to perform the Hajj pilgrimage. Usually one-time entitlement, lasting 30-40 days, and subject to company policy.

Replacement Leave Malaysia

When employees work on rest days or public holidays, employers can give replacement leave instead of receiving overtime pay. The leave should be recorded in HR or payroll systems for transparency.

Effective Leave Management for Employers in Malaysia

Managing employee leave efficiently helps maintain compliance, reduce payroll errors, and keep operations running smoothly.

Below are the key responsibilities of both employees and employers in ensuring a fair and transparent leave process.

Employee Responsibilities

Submit leave applications in advance following company procedures.
Inform HR or managers immediately in case of emergencies or illness.
Understand their leave entitlements under the Employment Act and company policy.

Employer Responsibilities

Establish and communicate a clear, compliant leave policy.
Apply leave approvals fairly and consistently across all levels.
Maintain accurate records for payroll and audit purposes.
Stay informed about the latest Employment Act 1955 amendments and updates.

Using an HR system or leave management software can help automate approvals, track entitlements, and ensure every leave request follows company and legal standards.

FAQs

Can employers reject annual leave requests?

Yes, but only for valid operational reasons. The employer should allow employees to reschedule within 12 months.

How is prorated leave calculated for employees who join mid-year?

Use the formula: (Months of service ÷ 12) × Annual entitlement.

Are unpaid leaves required by law in Malaysia?

No. Unpaid leave is discretionary and based on company policy.

How should employers handle public holidays when employees work?

Pay two days’ wages in addition to the regular salary or provide replacement leave.

Are part-time employees entitled to leave?

Yes, but on a pro-rata basis based on working hours compared to a full-time employee.

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