Updates Rate of Gaji Minimum Malaysia 2025

The government of Malaysia sets a minimum wage (gaji minimum) that employers must comply with. If your company hires staff, even part-timers or foreign workers, knowing the legal wage floor is critical to avoid penalties, audits, or disputes.

What is the Minimum Wage in Malaysia?

The minimum wage, or gaji minimum, is the lowest monthly or hourly wage that an employer is legally required to pay an employee. This rule exists to protect employees and provide a basic standard of living. It applies to both local and foreign workers across industries, unless the role is clearly exempted.

Starting 1 February 2025, the minimum wage in Malaysia is officially set at RM1,700 per month. This applies to:

All employers with five or more employees
Employers involved in professional activities, regardless of staff size

For smaller businesses (with fewer than five employees in non-professional sectors), the same rate will apply from 1 August 2025).

This minimum wage applies nationwide to Peninsular Malaysia, Sabah, Sarawak, and Labuan.

History of Minimum Wage in Malaysia

Malaysia introduced the Minimum Wages Order (MWO) in 2012 as part of national efforts to uplift low-income workers. Since then, the minimum wage has been adjusted several times in response to inflation, cost of living, and economic conditions.

Timeline:

2013: RM900 (Peninsular), RM800 (Sabah, Sarawak, Labuan)
2016: RM1,000 / RM920
2019: RM1,100 (uniform nationwide)
2020: RM1,200 in 57 major city councils; RM1,100 elsewhere
2022: RM1,500 across all regions
2025: RM1,700 nationwide, effective February or August depending on employer size/type

Who is Eligible for the Minimum Wage in Malaysia?

Minimum wage applies to almost all employees working under a contract of service. This includes:

Full-time workers
Part-time and temporary staff
Local and foreign workers with valid work permits
Employees on probation

However, interns and trainees under industrial training or education-linked programs are not always covered. Employers are still encouraged to provide fair allowances.

Who is Exempted from the Minimum Wage Law in Malaysia?

Some categories are excluded from the MWO:

Domestic helpers and live-in maids
Apprentices under formal apprenticeship contracts
Certain informal or non-standard workers, though Malaysia’s long-term direction is to improve wage protections for these groups as they move into formal work arrangements.

While the law doesn’t currently guarantee gaji minimum for every job type, employers are encouraged to practice fair compensation in line with International Labour Organization (ILO) standards, especially when dealing with vulnerable roles like domestic work or part-time contracts.

Who is Responsible for Ensuring Compliance?

The responsibility for compliance falls on the employer, as defined under the Employment Act and the National Wages Consultative Council Act 2011.

Employers must:

Track every employee’s basic wage and confirm it meets or exceeds the current minimum wage.
Keep accurate records of wage payments and payslips.
Make timely salary payments via approved channels.
Stay up to date with government announcements on wage adjustments.

If HR or payroll teams manage compensation, it is their duty to build systems that support compliance across all worker types.

Compliance with Minimum Wage Law

For payroll to comply with minimum wage law:

Structure salary packages so that basic wages (excluding allowances/commissions) are not less than RM1,700
Make statutory deductions (EPF, SOCSO, EIS) separately from minimum wage calculations

For example, if an employee receives RM1,600 in base pay and RM200 in allowance, that is not compliant. The RM1,700 must be the basic wage before any add-ons.

Deductions must also follow legal limits and should never bring wages below the minimum rate unless permitted under specific conditions.

How Often is the Minimum Wage in Malaysia Updated?

The National Wages Consultative Council (NWCC) reviews Malaysia’s minimum wage at least once every two years. Factors considered include:

Poverty Line Income (PLI)
Inflation rate and Consumer Price Index (CPI)
Productivity growth
Labour market conditions

While the review cycle is typically biennial, implementation may be adjusted based on economic circumstances. Employers should monitor announcements from the Ministry of Human Resources and prepare budgets accordingly.

FAQ

Is housing provided by the employer considered part of the minimum wage?

No. Housing, transport, and meals are considered benefits in kind and are not included in the RM1,700 minimum wage.

How do I report non-compliance to authorities?

Reports can be made to the nearest Department of Labour (JTK) office. Employees or whistleblowers may file a complaint with evidence.

Does minimum wage differ by state or city in Malaysia?

No. The current RM1,700 minimum wage is uniform nationwide, including Sabah and Sarawak.

Can small businesses be exempted from paying minimum wage?

Only microenterprises (fewer than five employees, non-professional) have a delayed enforcement date (1 August 2025). No permanent exemptions apply.

What happens if I pay below minimum wage unknowingly?

Even accidental underpayment can lead to legal consequences. Employers may be fined and ordered to pay the shortfall to employees. It’s best to audit your payroll regularly and consult with JTK if unsure.

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