EMPLOYER OF RECORD IN Malaysia
Build Distributed Teams With Pebl
Pebl’s Malaysia Employer of Record enables an efficient and compliant business expansion without the cumbersome and prolonged entity establishment process. As your Employer of Record partner, we hire your supported employees and manage all payroll, taxes, and benefits, saving you time and frustration. Whether you hire a single supported employee or build a brand new team, our experts simplify this process for you to expand your business into Malaysia compliantly.
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Malaysia at a glance
MYR
Currency, Malaysian Ringgit
855.6B
Economy
33.87M
Population
12th
Ranked Ease of Doing Business
Malay
Language
Monthly
Payroll cycle
Hiring in Malaysia
Benefits of hiring in Malaysia
According to the World Bank, the Malaysian economy is one of the most open in the world. As nearly half of all Malaysian employment is connected to export activities, the country’s trade and investment are essential to job creation and income growth.
Malaysia is one of Asia’s fastest emerging countries. Malaysia has attracted significant foreign investment since it possesses a relatively inexpensive but educated workforce, developed physical infrastructure, and supportive government policies for business growth.
Malaysia is a gateway to the region due to its strategic geographic location and ease of doing business. The country’s local business community is highly prepared to do business with international corporations, ensuring Malaysia as a strong manufacturing and export base.
Benefits
Malaysia is a gateway to the region due to its strategic geographic location and ease of doing business.
Wages and Salaries in Malaysia
As of May 1, 2022, the Minimum Wages Order 2022 was signed into law which set the country’s new minimum wage rate to MYR1,500 (USD337) per month.
Leave Entitlements in Malaysia
The Malaysian Employment Act states that after 12 months of continuous service, employees are entitled to annual leave depending on their length of service. The leave entitlements are as follows:
- Eight days for every year of continuous service, when they have been employed for less than two years
- 12 days for every year of continuous service, when they have been employed for two years but less than five years
- 16 days for every year of continuous service, when they have been employed for five years or more
Employment benefits in Malaysia
Malaysia’s government agencies administer the country’s benefits programs.
The Ministry of Human Resources provides overall general supervision and administration of labor relations.
The Malaysian social security system is called SOCSO, or PERKESO (Pertubuhan Keselamatan Sosial). It provides financial assistance to employees in the event of death, disability or illness, or an occupational disease.
The Ministry of Health provides and administers general health benefits and procedures to Malaysian residents. Employers contribute to the government on behalf of employees and collect contributions from employees to maintain the Malaysian Social Security scheme, which maintains pensions, survivor benefits, short-term disability, long-term disability, healthcare, and paid leave entitlements.
Tax and Social Security in Malaysia
Individuals are considered residents when they stay in Malaysia for more than 182 days in a calendar year.
Non-tax residents who work in Malaysia for a period that does not exceed 60 days in a calendar year are exempt from income tax. However, a non-tax resident’s income is subject to tax when performing independent services such as consultancy.
A non-tax resident is taxed at a rate of 30% on total income.
Malaysian residents are lawfully required to pay income tax on only their Malaysian source income, not their global source income.
- As of 2022, the Malaysian income tax brackets are:
- Up to MYR 5,000: 0%
- From MYR 5,000 to MYR 20,000: 1%
- From MYR 20,000 to MYR 35,000: 3%
- From MYR 35,000 to MYR 50,000: 8%
- From MYR 50,000 to MYR 70,000: 13%
- From MYR 70,000 to MYR 100,000: 21%
- From MYR 100,000 to MYR 250,000: 24%
- From MYR 250,000 to MYR 400,000: 24.5%
- From MYR 400,000 to MYR 600,000: 25%
- From MYR 600,000 to MYR 1,000,000: 26%
- From MYR 1,000,000 to MYR 2,000,000: 28%
- Above MYR 2,000,000: 30%
- The corporate income tax rate in Malaysia is 24%.
Payroll in Malaysia
In Malaysia, the tax year is the calendar year. Tax returns need to be filed by April 30 for individuals without business income and by June 30 for individuals with business income.
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