We work remotely
Global EOR Services
Global EOR Services™
Appearance
Contact UsTalk to Expert
Malaysia flag background
Back to Countrypedia

Hire in Malaysia,
compliantly,
without the complexity.

We become the legal employer for your international workforce in Malaysia. You keep full control of your team — we handle payroll, taxes, benefits, and local compliance.

Contact UsTalk to an Expert
Official NameMalaysia (Federation of Malaysia)
CapitalKuala Lumpur (Penang: 'Silicon Valley of the East')
CurrencyMalaysian Ringgit (MYR / RM)
Official LanguageMalay (Bahasa Malaysia; English is universally used in business, tech & law)
Population~34 million (Major Southeast Asian Tech & Semiconductor Hub)
Time ZoneMalaysia Time (MYT, UTC+8, no DST)
Minimum WageMYR RM 1,700 / month (National Minimum Wages Order)
Employees Provident Fund (EPF / KWSP)12.0% (wages > RM5k) or 13.0% (wages <= RM5k) Employer / 11.0% Employee
Social Security (SOCSO / PERKESO)1.75% Employer / 0.5% Employee (Employment Injury & Invalidity Schemes)
Employment Insurance System (EIS)0.2% Employer / 0.2% Employee (0.4% Total)
Human Resource Development Levy (HRD Corp)1.0% Employer contribution (for registered sectors)
Annual Leave (Employment Act)8 to 16 working days paid vacation (scaling with continuous tenure)
Standard Workweek45 hours/week (Employment Amendment Act 2022)

Malaysia is one of Southeast Asia's most prosperous, technologically advanced, and business-friendly economies (~$430+ billion USD GDP), celebrated as the global leader in semiconductor backend packaging, assembly, and testing (Penang's "Silicon Valley of the East" handles over 13% of global chip assembly and testing). Centered around the financial and regional corporate headquarters hub of Kuala Lumpur (KL Sentral, Tun Razak Exchange / TRX) and Penang's semiconductor cluster, Malaysia combines English common law certainty, universal English business fluency, state-of-the-art infrastructure, and strong Islamic finance leadership. However, hiring employees in Malaysia requires compliance with the Malaysian Employment Act 1955 (substantially modernized by the **Employment Amendment Act 2022** which extends protection to all employees regardless of wage threshold), mandatory contributions to the Employees Provident Fund (*EPF/KWSP* at 12%–13% employer / 11% employee), the Social Security Organisation (*SOCSO/PERKESO*), the Employment Insurance System (*EIS*), the Human Resource Development levy (*HRD Corp* at 1%), and Monthly Tax Deductions (*PCB / MTD*) with the Inland Revenue Board of Malaysia (*LHDN*). Setting up a local *Sdn Bhd* (Private Limited) company requires the Companies Commission of Malaysia (SSM) taking 3 to 6+ weeks. A Global Employer of Record (EOR) enables international companies to hire Malaysian software engineers, semiconductor specialists, and regional managers legally, quickly, and without establishing a local company. The EOR acts as the legal employer, managing Employment Act contracts, EPF/KWSP and SOCSO remittances, LHDN PCB tax deductions, and compliant MYR payroll processing while you direct daily business operations.

Economic Overview, Silicon Valley of the East & ASEAN Digital Engine

Malaysia is the world's premier hub for semiconductor packaging and testing, cloud data centers (Johor/Cyberjaya), and regional shared services in Kuala Lumpur.

Key Economic Clusters

  • Semiconductor Assembly & Testing: Penang high-tech manufacturing cluster powering global AI and automotive chip supply chains (Intel, Infineon, Micron).
  • Regional Shared Services & FinTech: Kuala Lumpur (TRX / Bangsar South) hosting multinational financial shared services and Islamic banking.
  • AI Hyperscale Data Centers: Johor and Cyberjaya emerging as Southeast Asia's fastest-growing data center hub (NVIDIA, Microsoft, Google).

Employment Contracts, Employment Act 1955 (2022 Amendment) & Probation

Regulated by the Employment Act 1955 (as amended by Act A1651 in 2022).

  • Universal Protection: The 2022 amendments extended the core protections of the Employment Act to **all employees**, regardless of their salary level.
  • Written Statement of Terms: Mandatory in English or Bahasa Malaysia detailing wage structure, working hours, and benefits.
  • Probation Period: Standard commercial practice is 3 to 6 months.

Working Hours, 45-Hour Standard Week & Overtime Multipliers

  • Standard Hours: 45 hours per week (reduced from 48 hours under the 2022 Employment Amendment Act; typically 9 hours/day over 5 days).
  • Overtime Surcharges: Minimum 150% (1.5× hourly rate) on normal workdays; 200% (double time) on weekly rest days; 300% (triple time) for work on designated public holidays.

Annual Paid Leave, Public Holidays & 98-Day Maternity

Annual Paid Vacation Entitlement

  • Tenure < 2 Years: 8 working days per year.
  • Tenure 2 to 5 Years: 12 working days per year.
  • Tenure >= 5 Years: 16 working days per year (20+ days standard in multinational tech).
  • Public Holidays: 11 mandatory gazetted public holidays (out of ~15 to 18 official national/state public holidays).

Maternity & Paternity Leave (2022 Act)

  • Maternity Leave: 98 consecutive days (~14 weeks) fully paid by the employer. Dismissal during pregnancy or maternity leave is strictly illegal.
  • Paternity Leave: 7 consecutive paid days for married male employees.

EPF (12%–13%), SOCSO, EIS, HRD Corp & LHDN PCB Tax

Statutory Scheme Employer Share Employee Share Description
Employees Provident Fund (EPF / KWSP) 12.0% (13.0% if wage <= RM5k) 11.00% Mandatory retirement fund (23%–24% total)
Social Security (SOCSO / PERKESO) ~1.75% 0.50% Employment Injury and Invalidity Scheme (capped at RM5k wage base)
Employment Insurance System (EIS) 0.20% 0.20% Job-loss insurance and retrenchment support
HRD Corp Training Levy 1.00% 0.00% Human Resource Development Corporation levy
Total Statutory Employer Cost ~14.95%–15.95% 11.70% Total monthly statutory payroll burden

Personal Income Tax (PCB / MTD): Progressive rates from 0% up to 30% on taxable income, withheld monthly and remitted to LHDN.

Termination, Notice & Statutory Termination Indemnity

  • Notice Periods: 4 weeks (tenure < 2 yrs), 6 weeks (2–5 yrs), and 8 weeks (>= 5 yrs service).
  • Termination & Lay-Off Benefits: 10 days' wages/year (tenure < 2 yrs), 15 days' wages/year (2–5 yrs), and 20 days' wages/year (>= 5 yrs service) under the Employment (Termination and Lay-Off Benefits) Regulations 1980.

Why Use an Employer of Record (EOR) in Malaysia

  • Rapid Regional Hiring: Onboard semiconductor packaging engineers and software developers in Penang or KL in days.
  • EPF, SOCSO, EIS & PCB Compliance: Automated management of statutory retirement funds, injury insurances, and LHDN tax deductions.
  • Employment Pass (EP Category I/II/III) Sponsorship: EOR sponsors work passes for foreign technical specialists through MDEC / ESD.

Hiring in Malaysia? Key Resources

Whether you are evaluating entity setup vs. using an Employer of Record, or looking for the best international payroll solution, our guides give you transparent benchmarks:

How EOR Services Work

Onboard, pay, and compliantly manage international staff in days.

Read Guide

EOR vs Entity Setup

Compare costs, incorporation timelines, and legal exposure.

Compare Options

Top EOR Providers (2026)

Side-by-side comparison of Deel, Remote, Rippling, and Oyster.

View Comparison
Featured EOR Providers

Top EOR Partners in Malaysia

Hire compliantly in Malaysia using our verified global infrastructure partners.

Oyster logo

Oyster

Global Employment Platform

4.7Visit
Gusto logo

Gusto

Global HR & Payroll

4.8Visit
Payoneer Workforce logo

Payoneer Workforce

Global EOR & Contractor Management

4.7Visit

Related Articles

Insights and guides for hiring in Malaysia

View Knowledge Center
Got Questions?

Hiring FAQs for Malaysia

Everything you need to know about expanding your workforce into Malaysia.

Ready to hire in Malaysia?

Get a customized quote from our global experts in minutes.

Book a CallContact Us

Get started

Start Hiring & Paying Global Talent Today

Join over 2,500+ fast-growing companies scaling their remote workforce in 195+ countries with automated EOR, payroll, and 100% legal compliance.

5-Min OnboardingZero Entity Required100% Tax Backing
Contact UsTalk to Specialist