Miskin Tegar, B40, M40: Maksud & Why It Matters to Malaysian Employers

In Malaysia, terms like miskin tegar, B40, M40, and T20 describe the real financial situation of your employees.

Understanding miskin tegar B40 M40 maksud is important because it affects several core HR functions:

Fair Compensation Planning

HR needs to check whether current salary ranges are realistic compared to today’s cost of living, especially for employees in the B40 and lower M40 groups.

Employee Financial Stress Awareness

Money problems can show up in the workplace as lateness, distraction, lower focus, or even higher turnover, especially among lower-income staff.

Benefit and Allowance Design

Different income groups may need different types of support, such as meal subsidies, transport allowance, childcare assistance, or housing-related help.

Understanding Government Schemes that Affect Employees

Many subsidies, tax reliefs, and assistance programmes are targeted at B40 and M40 households, so HR should know which staff might qualify and how this interacts with company benefits.

When HR understands these income categories, company policies become more fair, practical, and people-centred, instead of purely driven by internal grades or market benchmarks.

What are Income Classifications in Malaysia? (Miskin Tegar, B40, M40, T20)

At the national level, Malaysian households are broadly grouped by income into:

B40 (Bottom 40% of households)
M40 (Middle 40% of households)
T20 (Top 20% of households)

These are based on household, not just individual salary. A household usually has about 3.8 members and 1.8 income earners on average.

The government uses these groups to:

Design subsidies and aid (e.g. Sumbangan Tunai Rahmah, housing support).
Monitor poverty and inequality.
Plan long-term policies on wages, cost of living, and social protection.

Why This Matters to HR

These categories are a useful “lens” to understand your workforce:

A factory, retail outlet, or service operation may be heavily B40 to lower M40.
A tech company or bank may have more upper M40 to T20 employees.

This has a direct impact on:

Attendance & Punctuality

B40 workers are more exposed to transport cost hikes, rental shocks, childcare issues.

Engagement

Employees who are always worried about bills may struggle to focus or join non-mandatory activities.

Turnover

Small pay differences between employers can push B40/M40 employees to switch jobs quickly.

Updated Income Thresholds for B40, M40, T20

According to the Household Income and Expenditure Survey (HIES) 2022, Malaysia’s average household income is RM8,479 per month, and the median is RM6,338.

Using this survey, households are grouped roughly as:

Category	Average Household Income (2022)	Income Range (2022)
B40	~ RM3,440	Up to RM5,249 / RM5,250 and below
M40	~ RM7,694	RM5,250 to RM11,819
T20	~ RM15,867	RM11,820 and above

HR Insights from These Numbers

Most employees sit in B40 to M40, especially in retail, manufacturing, hospitality, and services.
With average household expenses around RM5,150 per month in 2022, many B40 households have very little buffer after paying for essentials.
Rising costs in housing, food, and transport hit B40 and lower M40 the hardest, which can impact:
- Overtime willingness (they may need it, but also burn out faster)
- Focus at work
- Ability to absorb unexpected expenses (car breakdown, medical bills).

Salary structures, allowances, and benefits should be reviewed with these income realities in mind, not just benchmarked against competitors.

Subcategories (B1–B4, M1–M4, T1–T2) Explained for HR

Previously, DOSM further broke down each main group (especially in the 2019 data) into smaller bands:

B40 (2019 bands)

B1: RM2,500 and below
B2: RM2,501 - RM3,170
B3: RM3,171 - RM3,970
B4: RM3,971 - RM4,850

M40 (2019 bands)

M1: RM4,851 - RM5,880
M2: RM5,881 - RM7,100
M3: RM7,101 - RM8,700
M4: RM8,701 - RM10,970

T20 (2019 bands)

T1: RM10,971 - RM15,040
T2: RM15,041 and above

These exact bands may be updated over time, but they are still very useful for HR thinking.

How HR Can Use These Subgroups

You don’t need to label employees as “B2” or “M3” in your system. Instead, think of them as income layers:

Internal Salary Benchmarking

If a big part of your staff is in a “B2 - B3” type range, small cost-of-living shocks will hurt them more. For senior executives closer to “T1 - T2”, different benefits (e.g. tax planning, long-term incentives) may matter more.

Targeted Employee Assistance Programmes

Emergency loans or food vouchers might be aimed at the lowest income brackets. Education support, housing support or childcare subsidies might be aimed at B40 and lower M40.

Benefit Design

Transport allowance matters a lot for employees, depending on public transport or motorbikes.

Meal subsidies/canteen pricing support those who spend a high share oftheir income on food.

Insurance and medical coverage can reduce financial shock from sudden illness.

What is “Miskin Tegar”

Miskin tegar (hardcore poor) refers to households with income below the Poverty Line Income (PGK).

For 2022, the national PGK value is RM2,589 per month, and hardcore poverty is often linked to incomes below about RM1,198 (the “food poverty” level).

The PGK differs by state, for example:

Selangor: ~RM2,830
W.P. Kuala Lumpur: ~RM2,816
Johor: ~RM2,627
Sabah: ~RM2,742
Terengganu: ~RM2,751
Many other states range roughly from RM2,140 - RM2,620+

Hardcore poor households are a small share of all households (about 0.2% in 2022, or around 18,445 households), but they are the most vulnerable.

How HR Should Treat Miskin Tegar Group?

An employee may still be working full-time yet belong to a miskin tegar household, especially if:

They have many dependents
Their spouse is not working
They are on very low wages.

This group is at the highest financial risk. One shock (accident, hospital bill) can destabilise the family. Miskin tegar may also show absenteeism (need to settle family issues, childcare, debt collectors) or turnover (chasing any slightly higher-paying job).

So, they may need extra support, such as:

Access to social workers or NGO referrals
Company-level zakat / CSR programmes
Structured financial counselling.

Having policies that protect the most vulnerable employees is both compassionate and good for retention.

Malaysia’s Cost of Living & Employee Financial Pressure

The 2022 data shows that average monthly household expenditure is around RM5,150, up from RM4,609 in 2019.

The biggest spending categories include:

Housing, utilities, gas and fuel about 23% of expenses
Food & non-alcoholic beverages about 16%
Restaurants & hotels around 16%
Transport about 11%

At the same time:

Around 6.2% of households still live below the absolute poverty line.
Urban poverty has increased compared to 2019, showing that city living is especially expensive for low-income households.

For HR and employers, this explains why employees may be:

Struggling with fuel and parking costs (leading to lateness, absenteeism).
Living in crowded housing far from work, which adds commuting time and stress.
Finding it hard to pay for childcare, which affects shift availability.

These pressures can reduce productivity, morale, and engagement. This is why benefits such as transport allowance, flexible hours, childcare support, meal programmes, or partial WFH can directly ease financial pressure and make employees more stable.

History of Income Classification & Updates

Malaysia’s income classification and PGK have been updated several times:

2016 to 2019: Household income and poverty lines revised; B40/M40/T20 cut-offs adjusted as incomes rose.
2020: Government introduced 10 subcategories (B1–B4, M1–M4, T1–T2) for more targeted programmes.
2022: Poverty Line Income (PGK) and income ranges updated again after the HIES 2022 survey.

These updates show that income benchmarks are not static. If the government updates its poverty line and income categories, HR should also review:

Salary scales
Allowances
Minimum starting pay
Eligibility for welfare or hardship support

Otherwise, your “old” pay structure might look okay on paper, but unrealistic in real life, especially for B40 employees.

How HR Can Identify Employee Income Challenges (Without Sensitive Data)

HR can use indirect but respectful methods, such as:

Anonymous Surveys

Run short, anonymous pulse surveys asking about:

Difficulty covering monthly expenses
Worries about rent, fuel, food, childcare
Interest in financial education or emergency loan schemes

Cost-of-Living Pulse Checks

Ask questions like:

“In the last 3 months, how often did you need to borrow money to cover basic needs?”
“Which benefits would help you most right now? (Transport, meal, childcare, medical, etc.)”

Use Salary Ranges as a Proxy

HR already knows the pay bands of each role. You can map your salary bands roughly to B40/M40 levels to understand who might be under more pressure.

Monitor Requests for Financial Help

Track these elements:

Salary advance requests
Emergency loans
Early EPF withdrawal inquiries (where relevant)

A spike may signal real financial distress among certain groups.

Additional Tips:

Emergency loan or cash assistance schemes with clear rules and repayment plans.
Flexible benefits where employees can choose what they need most.
Staff welfare programmes funded via CSR or zakat (for eligible organisations).
Financial literacy sessions (budgeting, debt management, EPF/PRS education).

HR Summary & Action Points

To recap:

Miskin tegar is households with income below PGK (RM2,589) and often below RM1,198 for hardcore poverty.
B40, M40, T20 are household income groups used by government to track inequality and design assistance: B40 (up to ~RM5,250), M40 (RM5,250–RM11,819), T20 (RM11,820+).
Most employees fall under B40–M40, who are more exposed to cost-of-living pressure.

Key actions for HR include:

Review internal allowances and starting pay, especially for lower bands.
Support B40 employees with targeted benefits (transport, meals, childcare, emergency aid).
Use income classifications as a reference, not a label, to design more inclusive HR policies.
Regularly update your salary and benefits strategy in line with new DOSM data and PGK updates.

FAQ

What do B40, M40, and T20 mean for employers?

They show where your employees sit in the national income ladder:

B40: More vulnerable to shocks, more sensitive to small pay changes, more likely to need targeted support.
M40: “Middle” group, which often juggles loans, schooling, housing, and may care about career progression and stability.
T20: Higher earners; motivated by career growth, variable pay, recognition and long-term incentives.

How can HR know whether employees fall under B40 or M40?

You usually don’t need exact labels:

Use salary ranges as a guide.
Combine that with anonymous surveys about financial stress.
If you know the typical household size in your workforce (e.g. via voluntary data), you can estimate how tight their finances might be.

The goal is not to tag people as “B40”, but to design policies that make life more manageable for those at the lower end.

Should companies offer extra assistance to B40 staff?

There is no legal requirement to do more than your contract and the law, but it is good practice and often good for business:

Lower-income staff usually make up a large part of frontline operations (production, logistics, customer service).
Supporting them via allowances, welfare programmes, and fair wages can:
- Reduce turnover
- Improve attendance
- Build a reputation as a caring employer.

How do income classifications affect HR benefits planning?

Income classifications help HR:

See which groups may benefit most from transport, meal, childcare, or housing support.
Decide how to design tiered benefits (e.g. different medical coverage for different grades, but with a strong base level for all).
Justify to management why some benefits (e.g. fuel, food, emergency loan funds) are important, especially for B40/M40.

When HR understands miskin tegar B40 M40 maksud, it becomes easier to align HR budgets with real employee needs, not just market “best practice” on paper.

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