The Cost of Hiring a Full-Time Employee in Malaysia

1. Introduction

Malaysia offers cost-effective access to a growing professional workforce. However, employers must budget beyond salary and consider statutory contributions, leave entitlements, and compliance responsibilities. This guide helps you understand the full cost of hiring a full-time employee in Malaysia.

2. Average Gross Monthly Salaries

Salary benchmarks by job type:

• Admin: MYR 2,000 – 3,500
• Professionals (finance, HR): MYR 4,000 – 7,000
• Engineers/Developers: MYR 5,000 – 9,000
• Managers: MYR 8,000 – 15,000

There is no national minimum wage for high-skilled roles, but a minimum wage of MYR 1,500/month applies to general workers.

3. Statutory Contributions and Employer Taxes

Employers must make contributions to:

• EPF (Employees Provident Fund): 12–13% of monthly wages
• SOCSO (Social Security): ~1.75%
• EIS (Employment Insurance System): 0.2%

Total contributions can add 14–15% to gross monthly salary. Filing must be done monthly, and late payment may incur penalties.

4. Other Mandatory Costs

• Annual Leave: Minimum 8–16 days depending on tenure
• Public Holidays: 11–16 days depending on state
• Maternity Leave: 98 days fully paid by the employer
• Paternity Leave: 7 days paid (as of 2023 law)
• Sick Leave: 14–60 days depending on hospitalization

5. Optional & Market-Driven Benefits

Employers often offer:

• Hospitalization insurance plans
• Bonuses (13th-month pay is common but not mandated)
• Travel, phone, or meal allowances
• Flexible hours or hybrid working arrangements

6. Hidden & Overlooked Costs

• Recruitment costs: Job boards, recruiter fees
• Work permits: If hiring expatriates, levy and visa fees apply
• Equipment: Laptop, desk setup, and maintenance
• Leave payout obligations: On resignation or termination, unused leave must be paid in cash

7. Advisory Notes for Employers

Ensure compliance with Malaysia’s Employment Act and file all statutory contributions on time. Clearly define all salary components in the employment contract to avoid future disputes, especially around bonuses and allowances.

8. How AYP Helps You Manage Cost Efficiently

AYP ensures full compliance with Malaysian employment regulations while managing EPF, SOCSO, and payroll reporting on your behalf. We provide cost clarity and reduce risks for employers expanding into Malaysia.

9. Contact Us

Thinking of hiring in Malaysia? Reach out to AYP to simplify your employment and compliance responsibilities.