Malaysia's HR and payroll landscape has shifted considerably heading into 2026. Several statutory changes that were announced or rolled out across 2024 and 2025 are now in full effect, and employers who have not yet updated their payroll settings and policies risk underpaying staff, miscalculating statutory contributions, or missing compliance deadlines. Here is a practical roundup of the key changes every Malaysian employer and HR team should act on.

1. Minimum wage raised to RM1,700

Under the Minimum Wages Order 2024, the national minimum wage increased from RM1,500 to RM1,700 per month. It took effect for larger employers first and has since been extended to all employers nationwide.

  • Make sure no active employee's basic salary falls below RM1,700 per month.
  • Remember that the minimum applies to basic wages — allowances such as transport or meal are generally on top, not part of the minimum.
  • Review part-time and daily-rated workers, whose equivalent pay must also meet the threshold.

2. Higher SOCSO & EIS wage ceiling — now RM6,000

The insured monthly wage ceiling for SOCSO and EIS contributions was raised from RM5,000 to RM6,000. Contributions for higher earners are now calculated up to RM6,000 instead of RM5,000, which slightly increases the maximum monthly contribution for both employer and employee.

If your payroll system still caps SOCSO/EIS at RM5,000, your contributions for higher-paid staff will be understated. Confirm your payroll applies the RM6,000 ceiling.

3. Mandatory EPF contributions for foreign workers

The government has moved to require EPF (KWSP) contributions for non-Malaysian employees, a measure announced under Budget 2025 and being implemented in phases at a reduced contribution rate for both employer and employee.

Implementation timing and rates for foreign-worker EPF have been phased and revised more than once. Always confirm the current effective date and contribution rate directly with KWSP before processing payroll for your foreign workers.

What to prepare now: identify which of your employees are affected, ensure their EPF registration details are ready, and budget for the additional employer cost.

4. EPF account restructuring (Akaun Fleksibel)

EPF has restructured members' savings into three accounts: Akaun Persaraan (Retirement), Akaun Sejahtera (Wellbeing), and the new Akaun Fleksibel (Flexible), which allows members to withdraw savings at any time. This mainly affects employees rather than employer obligations, but HR teams should be ready to answer staff questions about how their contributions are split and what they can withdraw.

5. e-Invoicing rollout continues

LHDN's mandatory e-Invoicing regime is being introduced in phases based on annual turnover, expanding to progressively smaller businesses through 2025 and into 2026. While e-Invoicing is primarily a finance and tax matter, HR and payroll teams that process expense claims, benefits, and vendor payments should align with their finance department. Confirm your business's specific phase deadline with LHDN.

6. Progressive Wage Policy (PWP)

The Progressive Wage Policy is a voluntary, incentive-based scheme that encourages employers to adopt structured wage progression linked to productivity and training. Participating employers may qualify for government cash incentives. If you are reviewing your salary structure for 2026, it is worth evaluating whether PWP participation fits your workforce.

Your 2026 HR compliance checklist

  • Audit all basic salaries to ensure they meet or exceed RM1,700.
  • Update your payroll to apply the RM6,000 SOCSO/EIS ceiling.
  • Review foreign-worker EPF readiness and confirm the current rate with KWSP.
  • Check your e-Invoicing phase deadline with LHDN.
  • Keep statutory submissions and EA Forms up to date for year-end filing.
Disclaimer: This article is general information current as at 2026 and is not legal or tax advice. Statutory rates and effective dates change frequently. Always verify the latest requirements with the official authorities — KWSP (EPF), PERKESO (SOCSO/EIS), HRD Corp, LHDN, and the Labour Department (JTKSM) — or consult your payroll provider before acting.

How GajiHub keeps you compliant

GajiHub applies the latest EPF, SOCSO, EIS, and PCB rates automatically, lets you adjust each payroll line to match your exact statutory submissions, and generates payslips and EA Forms straight from your finalised payroll — so staying compliant with Malaysia's changing rules takes minutes, not days.