Malaysian Ringgit (MYR)
Bahasa Melayu
Kuala Lumpur
Cost of Living
(US 69.92)
Time (UTC)
UTC +8
Federal Constitutional Monarchy

Hire in Malaysia without an entity and fully compliant with local labor laws

Malaysia is located across two pieces of land in Southeast Asia. It is one of the world's richest and most industrialized countries. Many people speak English, especially in Kuala Lumpur and other big cities.

The total land area is 127,547 square miles, over 82% of California's total area.

Get to know Malaysia

Malaysia is known for abundant sunshine, stunning beaches, rocky mountains, two annual monsoon seasons, and the world's tallest twin towers. Malaysians are proud of their rich, multicultural traditions from China, South Asia, the Middle East, the West, and archipelagic Southeast Asia. It is a country of space-age cityscapes, South Indian temples, and million-year-old rainforests. 

Penang, also called Georgetown, is considered Malaysia's food capital. However, residents have strong opinions about where to find the best local and multicultural dishes. 

Government policies encouraging foreign investment, market competition, and the privatization of publicly held firms helped create a dynamic financial industry. Malaysia has transitioned from a predominantly agricultural source of raw materials to a rising multi-sector economy since the 1970s. Exports of goods, mainly electronics, oil and gas, palm oil, and rubber, dominate the economy.

The World Bank classifies Malaysia as an upper-middle-income economy with the following trade agreements and alliances: 

Trade Agreements:

  • APEC - Asia-Pacific Economic Cooperation
  • ASEAN - Association of Southeast Asian Nations
  • RCEP - Regional, comprehensive economic partnership
  • TPP - Trans-Pacific Partnership


  • ADB - Asian Development Bank
  • Non-Aligned Movement
  • Commonwealth of Nations
  • OIC - Organization of Islamic Cooperation
  • UN - United Nations
  • WTO - World Trade Organization

“Must know” if you’re hiring in Malaysia without an employer of record

Entity requirements
Mandatory hiring contracts & clauses
Different compliance risks for full-time vs. contractor employees
Mandatory probationary periods
Allowable working hours & overtime wage laws
Timecard and attendance records
Required employer payroll, labor insurance, and tax payments
Discrimination protection
Notices & termination regulations

Budgeting for Malaysian employees

Hiring remote Malaysian professionals is smart and economical, assuming you’re fully compliant with local tax, labor, and wage laws.
Employee Classification–Full-time vs Contractor

Malaysian workers are also referred to as EA or non-EA, depending on how their employment situation addresses criteria set forth in the Employment Act 1955 (EA). 

Beginning January 1, 2023, people earning more than  MYR4,000/month are considered EA (full-time) employees; those earning less than that rate are non-EA contractors. There are additional criteria and exceptions but there’s no pre-defined, legal way to conclusively determine FTE vs contractor status in Malaysia. The Industrial Court resolves disputes.

January 1, 2023 amendments to the EA address:

  • Calculating wages for an incomplete month’s work
  • Changed labor guidelines for contractors 
  • Paternity leave (seven days)
  • Extending paid maternity leave from 60 to 98 days
  • Decreasing maximum working hours from 48 to 45
  • New provisions on flexible working arrangements, discrimination, and forced labour.

In general, EA/full-time employees have

  • Minimum terms and conditions of employment 
  • Fixed salary
  • Standard work hours
  • Benefits and paid leave

In general, non-EA/contractors have

  • Flexible working hours
  • Salary depends on task or project
  • No benefits or paid leave
Employment Contracts

Non-EA employees are protected by the Employment Act 1955, but employment contracts determine the legal relationship with employers. Employee rights, obligations, and remedies are typically defined in the contract and may include:

  • Job title/position
  • Remuneration
  • Commencement date
  • Probation period
  • Duration
  • Hours of work
  • Annual leave
  • Medical benefits
  • Statutory deductions
  • Conflict of interest
  • Confidentiality/non-competition
  • Termination
Probation Period

One to three months

Standard Working Hours & Overtime
  • Eight to 10 hours per day
  • 48 hours per week
  • Workday Overtime = paid 150% of regular salary rate
  • Holiday Overtime = paid 200% of regular salary rate
Payroll Frequency


Wages & Bonuses
  • Minimum daily wage = $13.13
  • Minimum monthly pay = $267.96
  • 13th month pay

USD equivalent median salaries

  • Data Scientist - $19,220 USD
  • Electrical Engineer - $12,579 USD
  • Hardware Engineer - $31,404 USD
  • IT Manager - $27,909 USD
  • Mobile Developer - $32,377 USD
  • Product Manager - $22,544 USD
  • Project Manager - $26,754 USD
  • QA Engineer - $13,137 USD
  • Software Engineer - $21,331 USD
  • System Administrator - $48,782 USD
  • UX Designer - $47,483 USD
  • Web Developer - $18,200 USD
Payroll Taxes & Employer Contributions

Employer Contributions

  • 4% - 13% Provident Fund 
  • 0.20% Employment Insurance (EIS)
  • 1% Human Resource Development Fund

Health Insurance 

  • Social Security Organisation (SOCSO)
  • 1.75% Employer Contribution
  • 0.50% Employee Contribution

Paid leave


  • 90 days (as of January 1, 2023)


  • Seven days (as of January 1, 2023)

Vacation/PTO days

  • Eight days of annual leave for every 12 months of service

Sick Days

  • Two years = 14 days per year
  • Two to five years = 18 days per year
  • More than five years = 22 days per year 

Additional Benefits

  • Medical insurance
  • Dental cover
  • Personal accident insurance
  • Optical coverage
  • Travel allowance
  • Parking allowance
  • Internet allowance
  • Professional training and personal development
  • Remote working benefits
  • Relocation assistance (if needed)
  • Travel incentives
  • Education assistance


Malaysia celebrates six national (public) holidays and multiple observances a year. Some have fixed-dates set on the Gregorian calendar and others are based on the Lunar calendar and thus observed on different dates each year. 


The most important fixed date holidays are:

  • New Year's Day (January 1)
  • Labour Day (May 1)

The most important Lunar calendar holidays are:

  • Thaipusam (January or February)
  • Chinese New Year (February)
  • Nuzul Al-Quran (March or April)
  • Hari Raya Aidilfitri (March or April)
Termination & Severance

Notice Period 

  • 30 days

To avoid an unfair dismissal claim, the dismissal must be for “just cause or excuse”:

  • Misconduct
  • Retrenchment
  • Poor performance
  • Retirement
  • Expired fixed-term contract
  • Resignation
  • Mutual agreement

Severance Pay

  • 10 - 20 days of regular pay
  • Differs based on the length of service

A few fun facts about Malaysia

  • The country's motto is "Unity is Strength.'
  •  There are five meal times in Malaysia – breakfast, lunch, tea, dinner, and supper.
  • You could park 40 Boeing 747s in the Sarawak Cave Chamber without overlapping the wings.
  • Malaysia has 40,934 miles of roads, almost double the 24,901 miles of the earth's circumference.
  • Malaysia is home to four UNESCO-designated World Heritage Sites.

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