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🇲🇾Complete Malaysia hiring guide

Hiring in Malaysia through an EOR (2026)

Here's what you need to know before you hire in Malaysia: what it really costs an employer, the employment laws that shape the contract, and how an Employer of Record lets you hire compliantly without opening a local entity. Every figure below is sourced and dated.

14.5%Employer cost on top
MYR 1,500Minimum wage / mo
8 daysPaid annual leave
Days, not monthsTime to hire via EOR
Robbin Schuchmann
Written by:
Robbin Schuchmann
Co-Founder at EOR Overview
Last updated: June 16, 2026

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Malaysia's employer social security obligation sits at 14.45% of gross salary, and for that cost you get access to a labour force of nearly 18.7 million people in one of Southeast Asia's most stable, mid-income economies. GDP per capita runs at around USD 11,874, which puts Malaysia in a different tier from cheaper regional neighbours, but also means you're hiring into a workforce with real purchasing power and professional depth.

Using an Employer of Record (EOR) in Malaysia means the EOR handles statutory contributions, employment contracts under Malaysian labour law, and payroll in MYR, while you direct the work. The statutory work week is 45 hours, the minimum wage is MYR 1,500 per month, and the corporate tax rate sits at 24%. Those three numbers together give you a quick read on the cost floor and the regulatory environment before you go any further.

Malaysia at a glance

The statutory facts that drive a hire in Malaysia. Each row shows where the figure comes from and how current it is, so you can trust the number and check it yourself.

Pay & working time

Minimum wageper monthMYR 1,500DatedILOSTAT · 2024
Statutory work week45 hours/weekCurrentStatutory working time (national labour law) · 2023
13th-month salarynoneCurrentNational government · 2026

Employer cost & tax

Employer social securityof gross salary14.5%DatedISSA Country Profiles · 2024
Employee social securitywithheld from pay11.7%DatedISSA Country Profiles · 2024
Corporate tax rate24%CurrentPwC Worldwide Tax Summaries · 2026

Termination

Notice period6.7 weeksCurrentWorld Bank Employing Workers / B-READY · 2019
Severance pay17.2 weeksCurrentWorld Bank Employing Workers / B-READY · 2019

Leave & time off

Paid annual leave8 daysCurrentNational government · 2026
Public holidays11 daysCurrentNational government · 2026
Maternity leave14 weeksCurrentWorld Bank Women, Business and the Law · 2026
Paternity leave1 weekCurrentWorld Bank Women, Business and the Law · 2026

Labour market

Retirement age55CurrentSSA Social Security Programs Throughout the World · 2026
Unemployment rate3.8%AgingWorld Bank Open Data · 2025
GDP per capita$13,125AgingWorld Bank Open Data · 2025
Union density8.7%DatedILOSTAT · 2018
Collective bargaining coverage0.4%DatedILOSTAT · 2018

What it costs to hire in Malaysia

Salary is only part of the bill. On top of gross pay you owe employer social security and statutory contributions. Here's what an example salary of $13,000 a year actually costs you as the employer.

Gross annual salary$13,000
Employer contributions≈ 14.5% of gross+ $1,879
Total employment cost$14,879
Your EOR handles the filings

Illustrative, based on the employer social-security rate above. An EOR adds its own service fee on top of this total and runs the income-tax withholding and statutory filings, which are withheld from the employee's pay, not paid by you.

The main driver of employer cost on top of gross salary in Malaysia is the statutory social security and provident fund contribution rate of 14.45%. This covers contributions to the Employees Provident Fund (EPF) and the Social Security Organisation (SOCSO), and it applies on top of whatever gross salary you agree with your hire. There are no additional itemised employer contributions in the data record beyond this figure, so 14.45% is the headline number to build into your total employment cost calculations.

Employer contributions
Social security14.5%
Employee contributions
Social security11.7%

Employment-law essentials

The rules an EOR enforces in your contracts, and the ones most likely to trip you up if you tried to hire in Malaysia on your own.

Working time
Statutory work week45 hours/week
Pay & 13th salary
Minimum wageMYR 1,500
13th-month salarynone
Leave
Paid annual leave8 days
Public holidays11 days
Maternity leave14 weeks
Paternity leave1 week
Termination
Notice period6.7 weeks
Severance pay17.2 weeks

Statutory minimums shown. Collective agreements or contracts can be more generous; an EOR applies whichever is correct for the role.

Things to watch in Malaysia

A few things in Malaysia's employment rules are easy to underestimate when you're budgeting for a new hire.

  • Severance can run long. The average severance entitlement works out to around 17.2 weeks, which is meaningful exposure if a role doesn't work out. Factor this into your risk budget from the start, not after a termination conversation begins.
  • Notice periods are longer than many expect. At an average of 6.7 weeks, notice obligations in Malaysia are well above the one- or two-week norms common in some other markets. Plan project handovers and backfill timelines accordingly.
  • Combined social security adds up on both sides. Employer contributions sit at 14.45% and employee contributions at 11.7%, so the total statutory deduction from a payroll perspective is substantial. Employees will notice the net-pay impact, and you'll need to price the employer side into every offer.
  • Retirement age is 55. Malaysia's statutory retirement age of 55 is lower than in many comparable economies. If you're hiring older professionals, be aware this can affect contract structuring and benefit expectations.

EOR vs. opening your own entity in Malaysia

Use an EOR when…
You're hiring one to a handful of people in Malaysia.
You want someone working in weeks, not months.
You'd rather not own local payroll, tax and compliance.
You're testing the market before committing.
Open your own entity when…
You're scaling to a large local team long-term.
Per-employee EOR fees outweigh the cost of an entity.
You need full control of local employment and IP.

Choosing an EOR for Malaysia

Providers with strong Malaysia coverage onboard faster and carry less risk. A shortlist to start from:

Compare all EOR providers in Malaysia

See our ranked best EOR providers in Malaysia

Common questions about hiring in Malaysia

Common questions about hiring in Malaysia through an EOR.

Do I need a legal entity to hire someone in Malaysia? +
No. An Employer of Record (EOR) already has a legal entity in Malaysia and employs the person on your behalf, so you can hire compliantly without opening your own entity. You manage the day-to-day work; the EOR handles the local contract, payroll, taxes and statutory benefits.
How much does it cost to employ someone in Malaysia? +
On top of gross salary, employers in Malaysia contribute roughly 14.5% in social security and statutory costs. An EOR adds its own service fee on top of that total employment cost.
What is the minimum wage in Malaysia? +
The statutory minimum wage in Malaysia is MYR 1,500. Pay below this is not permitted, and an EOR will hold contracts to at least this floor.
How hard is it to terminate an employee in Malaysia? +
Ending employment in Malaysia generally requires a notice period of around 6.7 weeks and severance of about 17.2 weeks, subject to the reason for termination and the employee's tenure. An EOR runs the offboarding in line with local law to limit your risk.
How much paid leave do employees get in Malaysia? +
Employees in Malaysia are entitled to 8 days of paid annual leave, in addition to public holidays. Statutory leave is one of the entitlements your EOR administers automatically.
About the author
Robbin Schuchmann
Robbin Schuchmann
Co-Founder at EOR Overview
Robbin is the co-founder of EOR Overview, an independent research site for Employer of Record services. He has been in the international hiring space for over a decade.
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