Malaysia Minimum Wages 2025: Full Guide for Employers & Employees
Minimum Wages in Malaysia 2025: What Employers and Employees Need to Know
As we approach 2025, the discussion on minimum wages in Malaysia continues to take center stage for employers, employees, and policymakers. Ensuring fair wages while balancing economic growth is a key priority for the Malaysian government.
In this article, we will explore the new Minimum Wages Order 2024 [P.U.(A) 376/2024] (MWO 2024), which sets out the revised minimum wage structure and its implications for businesses and workers.
Current Minimum Wage Framework
Under the Minimum Wages Order 2024 (MWO 2024), which was gazetted on 4 December 2024, the new minimum wage will come into effect in two stages:
- From 1 February 2025: The minimum monthly wage of RM1,700 will apply to:
- Employers with five employees or more; and
- Employers categorized as conducting professional activities under the Malaysia Standard Classification of Occupations 2020 (MASCO Employers), regardless of the number of employees they have.
- From 1 August 2025: The minimum monthly wage of RM1,700 will apply to all employers, regardless of the number of employees.
Employers who have less than five employees (excluding MASCO Employers) can continue to pay the existing minimum wage of RM1,500 until 1 August 2025.
Key Facts at a Glance (Quick Summary / At a Glance Table)
| Item | Detail |
|---|---|
| Monthly Wage | RM 1,700 per month |
| Effective dates | 1 Feb 2025 (Employers with ≥5 employees & MASCO Employers), 1 Aug 2025 (All employers) |
| Daily & Hourly Rates | Daily & hourly breakdown based on 4-, 5-, 6-day work weeks – e.g. RM65.38/day (6-day), RM78.46/day (5-day), RM98.08/day (4-day), hourly RM8.72 |
| Who’s Covered | Employers with ≥5 employees; MASCO Employers (any size); later extended to all employers from 1 Aug 2025 |
| Exemptions | Domestic servants |
Implementation Phases & Who Needs to Comply When
Phase 1 – 1 February 2025:
- Employers with five or more employees
- MASCO-classified employers (regardless of size)
Phase 2 – 1 August 2025:
- All remaining employers (including small ones not in MASCO) must pay RM1,700.
Grace periods / transitional provisions if any (e.g. employers continuing at RM 1,500 until the date)
Breakdown of Minimum Wage Rates
The minimum wage has been broken down as follows:
| Minimum Wages | ||||
|---|---|---|---|---|
| Monthly | Daily | Hourly (Each hour) | ||
| RM 1,700 | Amount of Days worked in a week | RM 8.72 | ||
| 6 | 5 | 4 | ||
| RM 65.38 | RM 78.46 | RM 98.08 | ||
Why the Adjustment in Minimum Wages?
The increase in minimum wages was announced by Prime Minister Datuk Seri Anwar Ibrahim during the tabling of the 2025 Malaysian Budget in October 2024. The adjustment aligns with the Government’s commitment to ensure that employees “earn meaningful wages and salaries to live more comfortably”.
Key objectives include:
- Improving the purchasing power of Malaysian workers;
- Supporting economic growth by increasing household incomes;
- Ensuring equitable wages across different sectors, including foreign workers.
Who is Not Covered / Exemptions
It is important to note that the Minimum Wages Order 2024 does not apply to domestic servants.
- Domestic servants (as defined under the Employment Act 1955 & Sabah/Sarawak Ordinances) are excluded.
- Any other exclusions: e.g. apprentices? (Check if in law)
- Interns or trainees under certain conditions (if applicable) — clarify whether minimum wage applies to them.
Employer Responsibilities
Employers should prepare for the wage adjustment to avoid non-compliance penalties. Key actions include:
- Stage Compliance: Understand which stage (February or August 2025) applies to your business category.
- Payroll Adjustments: Update payroll systems to reflect the new wage structure.
- Issue Addendums Where Necessary: An addendum is a written amendment to an existing employment agreement that updates specific terms without replacing the entire contract. In this case, the addendum would:
- Clearly state the revised minimum wage (RM1,700) and the effective date.
- Include adjustments to daily and hourly wages where applicable.
- Be signed by both the employer and the employee to acknowledge mutual agreement on the changes.
- Addendums are particularly useful when:
- Existing contracts are still valid and will not be replaced with new agreements.
- Employers want to avoid drafting entirely new contracts for minor adjustments like wage updates.
- Employers should keep copies of the signed addendums for audit and compliance purposes.
- Budget Planning: Prepare for increased labor costs, particularly for SMEs.
Employee Expectations
Employees, especially those earning minimum wages, should be aware of the following:
- Know Your Rights: Ensure that your employer complies with the revised wage rates.
- Report Non-Compliance: File complaints with the Department of Labour if employers fail to meet the new minimum wage requirements.
- Foreign Workers Included: The new minimum wage applies equally to local and foreign workers.
Malaysia’s minimum wage adjustments over the years:
The Malaysian government reviews the minimum wage at least once every two years. The following table shows the minimum wage adjustments over the years:
| Year | Minimum Wage Rates (Monthly) |
|---|---|
| 1 Feb 2025 1 Aug 2025 |
|
| 1 Jan 2023 |
|
| 1 May 2022 |
|
| 2019 & 2020 |
|
| 2018 |
|
| 2016 & 2017 |
|
Conclusion
The Minimum Wages Order 2024 represents a significant step in Malaysia’s ongoing effort to improve living standards and promote economic fairness. With a phased implementation starting in February 2025, employers and employees must stay informed and take proactive measures to adapt.
Stay tuned for further updates on Malaysia’s labor laws and wage policies. For more information, visit our website at CentralHR.
FAQs
Can Employers Include Allowances in the Minimum Wage Calculation?
The Employment Act 1955 (Section 2) defines wages as basic wages and all cash payments for work done under a contract of service, but excludes:
- Accommodation & Utilities: Value of housing, food, fuel, utilities, or approved amenities.
- Employer Contributions: Payments to pension funds, provident funds, or retirement schemes.
- Travel Allowances: Traveling allowances or travel concessions.
- Special Expense Reimbursements: Payments to cover employment-related expenses.
- Gratuity Payments: Given upon discharge or retirement.
- Bonuses: Any annual or part of an annual bonus.
What Can Be Included:
Any fixed amount agreed upon as the base pay for the work performed.
The basic salary as stipulated in the employment contract.
Are Interns Entitled to the Minimum Wage in Malaysia?
Generally, interns are not entitled to the minimum wage in Malaysia as the Minimum Wages Order 2024 primarily applies to employees under a formal contract of service. Internships are often considered training programs rather than employment, which means that the minimum wage regulations may not apply. However, employers are encouraged to provide a reasonable allowance to cover basic expenses for interns. Exceptions may apply if the internship involves a formal employment contract, in which case minimum wage requirements could be applicable.
