The minimum wage in Malaysia is set at RM1,500 per month, applicable nationwide. Employers must pay wages in Malaysian Ringgit (MYR) and ensure timely payments, typically no later than the seventh day after the wage period. Employees earning over RM4,000 per month are exempt from certain provisions, such as overtime pay and termination benefits, but their contracts may include these benefits by mutual agreement.

Malaysia’s progressive income tax system applies rates ranging from 0% to 30%, depending on annual taxable income. Employers are responsible for deducting employees’ taxes through the Monthly Tax Deduction (MTD) system and remitting them to the Inland Revenue Board (LHDN). Foreign employees are taxed based on their residency status, with non-residents subject to a flat tax rate of 30%.

The maximum weekly working hours have been reduced from 48 to 45 hours, encouraging better work-life balance. The standard workday is eight hours, with a maximum of five to six working days per week, depending on the sector. Employees working beyond these limits are entitled to overtime pay, calculated at:

1.5 times the hourly rate for overtime on regular working days.
2 times the hourly rate for rest days.
3 times the hourly rate for public holidays.

Annual Leave
Employees are entitled to paid annual leave based on their length of service:

Less than two years: 8 days.
Two to five years: 12 days.
More than five years: 16 days.

Sick Leave
Employees are entitled to paid sick leave based on their length of service:

Less than two years: 14 days.
Two to five years: 18 days.
More than five years: 22 days.
An additional 60 days of hospitalization leave if required.

Maternity Leave
Female employees are now entitled to 98 days of paid maternity leave, applicable for up to five confinements.

Paternity Leave
Married male employees are entitled to seven consecutive days of paid paternity leave for up to five births, regardless of the number of spouses.

Permanent Employment

Ongoing employment with no predetermined end date, offering full benefits.

Fixed-Term Employment

Contracts for specific durations or projects, with benefits outlined in the agreement. 

Part-Time Employment

Work hours are fewer than full-time employees, with entitlements prorated based on hours worked.

Freelancers/Independent Contractors

Not covered under the Employment Act; agreements are governed by mutual contracts.

Notice Period
Notice periods depend on the length of employment:

Less than two years: 4 weeks.
Two to five years: 6 weeks.
More than five years: 8 weeks.

Dismissal
Employers must provide valid reasons for termination, such as misconduct, redundancy, or poor performance, and conduct a due inquiry to ensure fairness.

Severance Pay
Employees earning less than RM4,000 per month are entitled to termination benefits:

Less than two years of service: 10 days’ wages per year.
Two to five years: 15 days’ wages per year.
More than five years: 20 days’ wages per year.

Resignation
Employees must serve the notice period outlined in their contract or compensate the employer in lieu of notice.