Minimum Wage in Malaysia

The Minister of Human Resource has announced an upward revision of the minimum wage for employees in Malaysia. Effective 1st August 2025, the monthly minimum wage will increase from RM1,500.00 to RM1,700.00.

For employees who are not paid a fixed basic salary but are compensated solely based on piece rate, tonnage, task, trip, or commission, the minimum monthly wage payable must not be less than RM1,700.00. The guide is provided below:

Impact

With this change, the minimum wage is now standardised across Malaysia under the Minimum Wages Order 2024 [P.U.(A) 376/2024]. The upward adjustment is intended to help employees cope with the rising cost of living and to create a more balanced and sustainable labour market. 

For employers, this move has direct implications on payroll costs, workforce planning, and compliance. Businesses may need to review their cost structures, adjust budgeting for wage increases, and consider the downstream effects on pricing, productivity, and competitiveness. While the higher wage floor may increase operating costs, it also offers an opportunity for employers to attract and retain talent, improve staff morale, and enhance overall workforce stability.

Key Takeaways for Employers:

• Review Payroll & Budgets 

Ensure salary structures comply with the new minimum wage and factor the changes into upcoming financial planning.

• Assess HR & Employment Contracts 

Update contracts, policies, and pay structures to reflect the revised requirements.

• Consider Workforce Productivity 

Explore efficiency improvements, automation, or reskilling to balance increased labour costs.

• Employee Relations 

Use this adjustment as an opportunity to strengthen employee engagement, retention, and employer branding.

• Compliance Readiness 

Ensure timely compliance to avoid potential penalties or disputes.