Our website uses  cookies for statistical purposes.

Our Articles

Payroll in Malaysia

Payroll in Malaysia

You can benefit from the services offered by our accountants in Malaysia if you are interested in payroll in Malaysia. Our specialists can explain the steps and procedures for calculating and delivering salaries in a company registered in this country. We invite you to read in the following lines, details about the payroll system in Malaysia, mentioning before that you can call on our specialists if you want to open a company in Malaysia.

 Quick Facts  
 What does a payroll specialist in Malaysia do?

– calculation of salaries and related taxes,

– distribution of salaries according to the internal regulations of the company in Malaysia 

What is a payslip? 

A document with information about an employee’s salary, contributions, taxes, etc. 

Importance of a payroll system 

All employee data, like working hours and days off, are recorded through a payroll system to properly calculate the salaries before distribution. 

 Who signs the documents before the distribution of salaries in the company? Company managers 
When are salaries distributed in the company? 

 After payslips are prepared, issued and signed by the company management in charge.

 Benefits for employees in Malaysia

– maternity leave,

– paternity leave,

– annual leave,

– sick leave, etc. 

Individual income tax 

 Ranging between 0% to 30%

Annual paid leave in Malaysia 

 – 8 days for less than 2 years in the company,

– 12 days for more than 2 years in the firm

Unemployment insurance 


Pension contribution on behalf of employee 

– 1.25% for first category (less than 60 years of age),

– 1.75% for second category 

Medical insurance paid by the employee 

 To be introduced. Private medical and life insurance are recommended.

 Content of a work contract

 – position in the firm,

– working hours,

– company policy,

– obligations,

– rights,

– salary, etc.

 Minimum wage in Malaysia

 RM 1,500/month

 13th salary in Malaysia

Some companies in Malaysia pay the 13th salary as a bonus. 

 Why choose our payroll specialists in Malaysia?  We offer provide payroll services at affordable prices, and tailored offers depending on the size of the company in Malaysia.

What is payroll in Malaysia and how can you benefit from these services?

The payroll system in Malaysia involves various procedures and formalities, with the help of which the salaries of employees in a company can be calculated, followed by their distribution. A payroll specialist in Malaysia can take care of this important aspect of accounting. Below we review some information about HR payroll in Malaysia:

  • Payroll specialists can use dedicated platforms with the help of which the salaries of a company’s employees are calculated.
  • Before the delivery of salaries, social contributions, insurance, medical leave, holiday, etc. are taken into account.
  • Once the salaries are calculated, payslips are drawn up, i.e. the documents justifying such incomes. These, along with other financial documents, are signed by those responsible, such as the company’s managers, and the financial-accounting department.
  • The distribution of salaries is done according to the company’s regulations, in the employees’ accounts.
  • The payroll system in Malaysia is governed by the Employment Act 1995. You can discuss with us about HR payroll in Malaysia.

For the smooth running of the business, it is recommended to outsource accounting services in Malaysia. Thus, specialists can take care of payroll in Malaysia, with the guarantee that the services offered are in accordance with expectations. You can find out more about company formation in Malaysia and the support we offer if you contact us online or by phone. Below is an infographic about the payroll services we provide in Malaysia:

Employment contracts in Malaysia

Even if oral agreements are also accepted in Malaysia, it is much more indicated to sign an employment contract between employee and employer. Such a contract can be for a fixed, indefinite, full-time, or part-time period, depending on projects and requirements. Here’s what else such an employment contract should contain:

  • the name of the employing company,
  • the probationary period is normally 3 months,
  • the activities that come to the attention of the employee, as well as the location where they take place,
  • internal regulations of the company,
  • the rights of the employee and the employer,
  • the employee’s remuneration and the date on which the salary is delivered,
  • the conditions under which an employment contract can be terminated.

What is good to know about employment contracts in Malaysia is the fact that they must also stipulate the retirement age. Thus, in Malaysia, people who turn 60 years old can retire from the activity. We recommend those interested in payroll in Malaysia contact us for more information.

Below is a video presentation about payroll in Malaysia:

Obligations of employers in Malaysia

If you want to open a company in Malaysia, you must take into account the formalities after incorporating the firm. These are part of the obligations of an employer and refer to the following:

  • Registration with Social Security fund and Employees Providing Funds.
  • The employer is also required to be registered with the Social Security Organization in Malaysia when the first employee starts his/her activities, within a maximum of 30 days. Company incorporation in Malaysia enters the attention of our local agents, including all employee-related registrations.

As for payroll data in Malaysia, there are no specific legal data safety requirements. Thus, companies with internal or external payrolls must ensure that they have the required policies for data protection and that the implementation is done in two months. You can find out more about these obligations by contacting one of our local specialists.

Payroll administration in Malaysia – Why is it taken into account?

Normally, payroll processing for a company in Malaysia takes place every month and several important aspects are taken into account:

  • When calculating salaries, benefits must also consider statutory holidays, paid annual leave, medical or maternity leave, employment termination, etc.
  • The employer and the employees pay a share of the social contributions. A payroll specialist in Malaysia must ensure that these obligations are met.
  • If there are optional benefits, they can refer to housing and transportation allowance, bonuses, medical insurance, pension schemes, etc.

Monthly tax deductions will also be taken into account when preparing payslips for employees of a company in Malaysia.
Once the salaries are calculated, a payslip can be issued for each employee. The company must have an employee register with all the information related to payroll and administration.

We invite you to discuss more about payroll in Malaysia with one of our local specialists. They can offer you outsourced payroll services that can be customized depending on the number of employees, the type of activities, the size of the company, etc.

Payroll Legislation in Malaysia

The Employment Act 1995 is the set of laws that governs the payroll in Malaysia. This legislation outlines the rights of both employer and employee, plus the obligations referring to activities in a company with establishments in Malaysia.

Common payroll errors that should be avoided

When you collaborate with a company that specializes in payroll in Malaysia, you can ensure the accuracy of the services offered. Payroll specialists use dedicated and accepted platforms in Malaysia for calculating salaries, so there are no errors regarding missing documents, incorrect data, or fees and taxes that have not been taken into account. Digitization offers immense support in any field, and even more so in accounting and payroll. If you want to discover the services offered by our specialists, including a CPA in Malaysia, do not hesitate to contact us whenever you want.

Looking for dedicated accountants in Malaysia

When you want to open a business in Malaysia, you must consider accounting services. The outsourced ones are complete and at advantageous prices. In addition, you have the guarantee that the owned company respects the legislation and implements all the necessary policies for the smooth functioning of the activities. We advise you to talk to us about payroll services in Malaysia and other important services that can be offered by our local accountants in Malaysia.

The minimum wage in Malaysia

The following information might attract your attention if you want to set up a company in Malaysia and hire workers:

  • According to recent data, the national minimum wage in Malaysia is RM 1,300 per month but will increase at RM 1,500 starting from May 2023.
  • Companies with less than 5 employees were not obliged to implement the latest salary increase, but they are required to do so since July 2023.
  • Employees who work 6 days a week are paid approximately RM 58 or USD 13 per day.

Do you want complete information about HR payroll in Malaysia? Would you like to set up a business in Malaysia? You can contact our local specialists who can also help you start a business in Malaysia.