Under the Minimum Wages Order 2024, Malaysia's national minimum wage rose to RM1,700 per month, up from RM1,500. Although the headline figure is simple, employers still make costly errors in how they apply it. Here is what the RM1,700 rule actually means in practice.

The new rate

The statutory minimum is RM1,700 per month (with corresponding daily and hourly equivalents depending on the number of working days). It applies nationwide and was phased in — larger employers first, followed by full coverage for all employers.

What counts as "wages"?

This is where most mistakes happen. The minimum wage refers to basic wages. In general:

  • Counts: the employee's basic salary.
  • Usually does not count: allowances such as transport, meal, and housing; overtime; bonuses; commissions; and other variable or service-related payments.

In other words, you cannot top up a below-minimum basic salary with allowances to "reach" RM1,700. The basic itself must meet the minimum.

Part-time and daily-rated workers

For employees who are not on a standard monthly arrangement, the minimum must be met on the correct daily or hourly equivalent, calculated from the monthly figure and the number of working days in the month. Do not simply pro-rate in a way that drops effective pay below the legal floor.

Common compliance mistakes

  • Counting allowances as part of the minimum wage.
  • Forgetting to raise existing staff who were previously at RM1,500.
  • Overlooking part-time, probationary, and daily-rated workers.
  • Not updating EPF, SOCSO, and EIS contributions after the wage increase.

Enforcement

Minimum wage is enforced by the Labour Department (JTKSM), and non-compliance can lead to penalties. Keep clear payroll records showing each employee's basic wage so you can demonstrate compliance if audited.

Disclaimer: This article is general information current as at 2026 and is not legal advice. Minimum wage rates and rules can change. Always verify the current requirements with the Labour Department (JTKSM) or a qualified advisor before acting.

How GajiHub helps

GajiHub makes it easy to review every employee's basic salary, flag anyone below the legal floor, and recalculate EPF, SOCSO, and EIS automatically when you adjust wages — so a minimum-wage change does not turn into a payroll headache.