Overtime Pay During Chinese New Year 2026 in Malaysia: Rates, Rules & Examples

Chinese New Year is one of the most important public holidays in Malaysia. While many businesses close or operate with reduced capacity, others, especially in retail, manufacturing, logistics, healthcare, and hospitality, continue running throughout the festive period.

When employees are required to work during the Chinese New Year, overtime and public holiday pay must be handled carefully. Miscalculations during this period are common and can lead to payroll disputes, employee dissatisfaction, or non-compliance with Malaysian employment law.

So, how does overtime pay work during the Chinese New Year 2026? What employers are legally required to pay, and how HR teams can prepare payroll accurately during the festive season?

Chinese New Year 2026 Public Holidays in Malaysia

Chinese New Year is a gazetted public holiday in Malaysia and is officially observed over two days. For 2026, the public holidays are:

Day 1 of Chinese New Year
Day 2 of Chinese New Year

Both days are recognised as public holidays nationwide, unless otherwise specified by state-level declarations.

It is important to distinguish between:

Gazetted public holidays (legally mandated), and
Company-declared holidays (additional leave offered by employers).

Only gazetted public holidays trigger statutory public holiday pay and overtime rules under the Employment Act 1955.

Employment Law Governing Overtime Pay

Overtime and public holiday pay in Malaysia are governed primarily by the Employment Act 1955. The Act covers:

Employees earning RM4,000 and below per month, and
Manual workers, regardless of salary.

Employees outside this scope, such as managers, executives, or professionals earning above RM4,000, are generally governed by:

Their employment contract, and
Company HR policies.

However, many employers still apply similar overtime principles to maintain fairness and consistency.

What Counts as Overtime in Malaysia

Overtime refers to any work performed beyond an employee’s normal working hours. In general:

Normal working hours are up to 8 hours per day, or
45 hours per week.

The way overtime is calculated depends on when the work is performed:

On a normal working day
On a rest day
On a public holiday (such as Chinese New Year)

Each scenario has different pay rules and rates.

Overtime Pay Rates During the Chinese New Year

Chinese New Year is treated as a public holiday, which means overtime rules are stricter than on normal days.

A. Working on a Normal Working Day During the CNY Period

If the Chinese New Year falls on a day that is not a public holiday for the employee (for example, a company-declared working day), overtime is calculated as usual.

Overtime rate: 1.5 times the hourly rate
Applies after exceeding daily or weekly normal working hours

B. Working on a Rest Day During Chinese New Year

If an employee works on their rest day during the Chinese New Year period (but not on the gazetted public holiday itself), rest day pay rules apply.

Payment depends on:

Whether the employee works a half day or full day
Total hours worked

Rates are higher than normal working days but lower than public holiday rates.

C. Working on a Public Holiday (Chinese New Year Day 1 or Day 2)

This is the most critical scenario for employers. When an employee works on a gazetted Chinese New Year public holiday:

Double pay (2×) applies for work done within normal working hours
Triple pay (3×) applies for overtime hours beyond normal working hours

This means public holiday work is compensated at multiple layers, not a flat rate.

Example: Overtime Pay Calculation (Guideline Only)

Step 1: Determine the Hourly Rate

Hourly pay is calculated as:

Monthly salary ÷ 26 days ÷ working hours per day

Example:

Monthly salary: RM3,000

Working hours: 8 hours per day

Daily pay = RM3,000 ÷ 26 = RM115.38
Hourly pay = RM115.38 ÷ 8 = RM14.42

Step 2: Apply Public Holiday Rates

Double pay (2×): RM14.42 × 2 = RM28.84 per hour
Triple pay (3×): RM14.42 × 3 = RM43.26 per hour

Step 3: Calculate Total Pay for the Day

If the employee works:

8 normal hours, and
4 overtime hours on the Chinese New Year

Calculation:

Normal hours: RM28.84 × 8 = RM230.72
Overtime hours: RM43.26 × 4 = RM173.04

Total pay for the day: RM403.76

Who Is Eligible for Overtime Pay

Overtime pay during the Chinese New Year applies to:

Employees earning RM4,000 and below
Manual labour employees
Non-executive staff covered under the Employment Act 1955

For employees outside the Act:

Overtime eligibility depends on employment contracts
Some companies still provide public holiday compensation as a policy decision

Employer Obligations During Chinese New Year

During Chinese New Year, employers are responsible for:

Paying correct public holiday wages
Applying the correct overtime multipliers
Issuing replacement leave only where legally permitted
Obtaining employee consent for holiday work
Maintaining clear payroll records and payslip breakdowns

Employers cannot arbitrarily replace public holiday pay with normal wages unless allowed under the Act or agreed by the employee.

HR & Payroll Best Practices for CNY 2026

To avoid errors and disputes, HR teams should:

Communicate holiday and work schedules early
Clarify who is required to work during CNY
Set clear OT approval procedures
Confirm payroll cut-off dates before the festive period
Ensure attendance and overtime records are accurate
Align payroll systems with statutory holiday rates

Preparation is key, as CNY payroll errors are one of the most common festive-season HR issues.

FAQs

Is the Chinese New Year a paid public holiday in Malaysia?

Yes. Chinese New Year is a gazetted public holiday and must be paid according to the Employment Act.

What is the overtime rate during the Chinese New Year?

Double pay applies during normal hours, and triple pay applies for overtime beyond normal hours.

Do employees get double pay on public holidays?

Yes, at a minimum. Overtime hours are paid at a higher rate.

Can employers give replacement leave instead of holiday pay?

Only under specific conditions allowed by law or mutual agreement.

How is overtime calculated for shift workers during CNY?

Shift schedules must still comply with public holiday pay rules and applicable multipliers.

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