Cost to Hire an Employee in Malaysia (2026)

• Gross salary, usually paid monthly.
• Employer costs of about 14.3% at a MYR 108,000 salary: MYR 15,444 a year, of which the largest is EPF (Employees Provident Fund) (> RM5,000).
• An EOR fee, if you hire without your own entity. The providers in our Malaysia guide publish starting prices of US$199–699 per employee per month.

Mandatory employer costs at a MYR 108,000 salary (mid-level professional). Employee contributions and income tax come out of gross pay and aren't included.

Contribution ceilings mean employer costs can be a smaller share of higher salaries. Figures exclude the EOR fee.

• EPF (employer): 13% on wages up to RM5,000 a month, 12% above
• SOCSO and EIS (employer): 1.75% + 0.2%, on wages up to RM6,000 a month
• HRD levy: 1% of monthly wages for covered employers
• Minimum wage: RM1,700 a month (from 1 February 2025)
• Working week: Up to 45 hours
• Paid annual leave: 8, 12 or 16 days by length of service

• EPF is 13% for monthly wages of RM5,000 or less and 12% above; the example salaries here are all above RM5,000 a month. For non-Malaysians who registered from 1 August 1998, the employer share is 2%.
• SOCSO and EIS stop at wages of RM6,000 a month, so above RM72,000 a year they are flat.
• The HRD levy applies to employers covered by the PSMB Act 2001, by sector and size.
• Employee contributions (EPF 11%, SOCSO 0.5%, EIS 0.2%) and the employee-paid LINDUNG 24 Jam contribution are deducted from pay and are not employer costs.

Without your own entity in Malaysia, an Employer of Record can employ your hire for a monthly fee. The alternative is setting up your own Malaysian Sdn Bhd or branch. See the comparison in our Malaysia guide and EOR vs local entity.