# Hire in Malaysia

Source: https://overseashire.com/hire/malaysia · verified 2026-10-05 · confidence medium

English-speaking, multilingual workforce with competitive wages and a mature shared-services and tech sector, close to Singapore.

## Employer cost
Employer on-costs 13.95–15.95% of gross salary. Derived for Malaysian employees under 60: EPF 12% (wages over MYR 5,000) or 13% (MYR 5,000 and below) + SOCSO 1.75% + EIS 0.2% (both capped at monthly wage MYR 6,000, per secondary source), plus HRDF levy 1% for covered employers with 10+ staff (high end uses EPF 13% + HRDF). Non-citizens are subject to 2% employer EPF from October 2025 (secondary source), so cost is much lower for foreign employees. Excludes paid leave and termination benefits.

| Contribution | Rate | Notes |
|---|---|---|
| EPF (Employees Provident Fund) | 13% (wages up to MYR 5,000) or 12% (above), employees under 60 | PwC: 12% employer / 11% employee for monthly pay over MYR 5,000; 13% for MYR 5,000 and below per secondary sources. Non-citizens subject to prescribed rates from October 2025 (2% each per secondary source). |
| SOCSO (Employment Injury + Invalidity) | 1.75% of wages (max MYR 104.15 per month for both schemes per PwC) | Employee 0.5%; PwC gives MYR 74.40 for EIS-only (employment injury) coverage for older workers. |
| EIS (Employment Insurance System) | 0.2% | Employee also 0.2%; secondary source. |
| HRDF levy | 1% of monthly wages | Employers with 10+ employees in covered sectors (0.5% for some smaller employers; not verified). |

Mandatory benefits: EPF, SOCSO and EIS coverage; Paid annual leave of 8/12/16 days by service band (Employment Act); Sick leave 14/18/22 days and 60 hospitalisation days; Maternity leave 98 days and paternity 7 days

## Rules
- Payroll: Monthly; wages paid within 7 days of the end of the wage period (general knowledge)
- Probation: Customarily 3-6 months by contract; not fixed by statute.
- Notice and severance: If contract is silent: 4 weeks (under 2 years), 6 weeks (2-5 years), 8 weeks (over 5 years). Termination benefits for EA-covered employees: 10 days (under 2 years), 15 days (2-5 years) or 20 days (over 5 years) per year of service on retrenchment (general knowledge).
- Termination: Dismissal without just cause can be challenged at the Industrial Court for reinstatement or compensation. The Employment Act covers all employees since 2022, with some protections limited to those earning up to MYR 4,000.
- Working time: 45 hours per week maximum (Employment Act amended 2022); overtime paid at 1.5x on normal days.
- Paid leave: 8 days (under 2 years), 12 days (2-5 years), 16 days (over 5 years) of annual leave, plus at least 11 public holidays under the Employment Act (general knowledge).
- Minimum wage: MYR 1,700 per month from 1 February 2025 for employers with five or more employees and professional activities; smaller employers from 1 August 2025 (Malay Mail / government announcements) - https://www.malaymail.com/news/malaysia/2025/02/01/new-minimum-wage-of-rm1700-takes-effect-today-for-over-43-million-workers/165129

## Contractors
Contractors are usable; the Employment Act defines employment in substance. Misclassification risk is moderate.

## EOR
A foreign company needs a Sdn Bhd or EOR to employ locally. EORs handle EPF, SOCSO, EIS and PCB. Timelines not verified.
Onboarding: EOR not verified; own entity not verified.

## FAQ
**What are employer contributions in Malaysia?** EPF 12-13%, SOCSO 1.75%, EIS 0.2% and a 1% HRDF levy for covered employers: roughly 14-16%.

**Do foreign employees pay EPF?** From October 2025 non-citizens are subject to mandatory EPF at prescribed rates (secondary sources say 2% each).

**What is the minimum wage?** MYR 1,700 per month since February 2025.

**What notice applies?** Contract terms apply; otherwise 4, 6 or 8 weeks by length of service.

Unverified: EPF 13% vs 12% split and SOCSO/EIS rates are from secondary sources; HRDF sector coverage and smaller-employer rate; Leave, notice and termination benefit scales from general knowledge; Foreign-worker EPF rate (2%); EOR/entity timelines

Sources:
- https://taxsummaries.pwc.com/malaysia/corporate/other-taxes
- https://www.ajobthing.com/resources/blog/epf-socso-eis-contribution-2026-latest-rates-rules-employer-guide-malaysia
- https://www.malaymail.com/news/malaysia/2025/02/01/new-minimum-wage-of-rm1700-takes-effect-today-for-over-43-million-workers/165129
- https://eiglaw.com/malaysia-requires-epf-contributions-for-foreign-workers-from-october-2025/

Not legal or tax advice.