# Hiring in Malaysia: employment costs, payroll and compliance

> Machine-readable page from EOR Overview (https://eoroverview.com/), an independent research platform for Employer of Record services.
> Canonical page: https://eoroverview.com/hiring-guides/malaysia/
> Methodology: how providers are researched, scored and compared is documented at https://eoroverview.com/methodology/.
> Disclosure: EOR Overview is free to use. We may earn a referral fee from some providers; this never affects a rating or ranking position (https://eoroverview.com/disclosure/).
> Statutory data last updated: 2026-06-16. Every figure below carries its own source year.

## Country

| Field | Value |
|---|---|
| Region | Asia |
| Currency | MYR (Malaysian Ringgit) |

## Pay & working time

| Field | Value | Source year |
|---|---|---:|
| Minimum wage | MYR 1,500 | 2024 |
| Statutory work week | 45 hours/week | 2023 |
| 13th-month salary | none | 2026 |

## Employer cost & tax

| Field | Value | Source year |
|---|---|---:|
| Employer social security | 14.5% | 2024 |
| Employee social security | 11.7% | 2024 |
| Corporate tax rate | 24% | 2026 |

## Termination

| Field | Value | Source year |
|---|---|---:|
| Notice period | 6.7 weeks | 2019 |
| Severance pay | 17.2 weeks | 2019 |

## Leave & time off

| Field | Value | Source year |
|---|---|---:|
| Paid annual leave | 8 days | 2026 |
| Public holidays | 11 days | 2026 |
| Maternity leave | 14 weeks | 2026 |
| Paternity leave | 1 week | 2026 |

## Labour market

| Field | Value | Source year |
|---|---|---:|
| Retirement age | 55 | 2026 |
| Unemployment rate | 3.8% | 2025 |
| GDP per capita | $11,874 | 2024 |
| Union density | 8.7% | 2018 |
| Collective bargaining coverage | 0.4% | 2018 |

## Overview

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.

## Cost context

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.

## Things to watch

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.

Providers ranked for Malaysia: https://eoroverview.com/best/malaysia/