Payroll and HR in Malaysia

Local Information

Local Time (LIVE):1:59 PM
Local Currency:$1 = RM4.14
Business Language(s):Malaysian (Malay) and English
Tax Year Dates:1st January – 31st December

 

Thanks to its sizeable population, robust economy and proximity to Singapore, Malaysia is a popular country to expand into. Many businesses choose to expand their operations to Malaysia because of its low operation costs, and thanks to its multilingual residents, it makes for an easy transition.

That’s not to say expanding to Malaysia is without its difficulties. Despite many Malaysians speaking English, legal compliance and the logistics of expansion can disrupt your processes.

To make sure your employees are paid correctly and on time, you need an international payroll and HR expert by your side. Fortunately, FMP Global have a wealth of experience when it comes to international payroll and HR.

We understand a smooth transition can be difficult when you’re trying to maintain regulatory compliance and get your head around new administrative procedures. Get in touch today and discover how we can help.

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Details correct at time of publication. You should not rely on these details without first seeking professional international advice.

Employer Must-Dos

In Malaysia, the following reports must be submitted to strict deadlines.

  • Corporate tax return
  • SOSCO & EPF forms

Payroll in Malaysia

What tax considerations are there?

If an employee works in Malaysia for more than 182 days they are classed as a resident. If they work for more than 60 days but less than 182, they are classed as non-residents. Income tax is determined on a progressive scale for residents of Malaysia, whilst non-residents must pay a flat rate of 28%.

One key consideration to be aware of in Malaysia is that the tax system is territorial. Both residents and non-residents of Malaysia are taxed on their Malaysian-sourced income whilst foreign income is usually not taxed (unless exemptions apply – for instance double taxation).

Employees and employers must make contributions towards the Social Security Organization (SOCSO), which is a health benefits scheme (expats excluded). Additionally, employers and Malaysian employees must make contributions towards the Employees Provident Fund (EPF) for retirement benefits. Non-Malaysian employees can become members if they wish.

Non-resident companies are taxed at a flat rate of 24% for corporate tax.

HR in Malaysia

What are the regular working hours in Malaysia?

The Malaysian Employment Act defines the Malaysian work week as 48 hours, with a maximum 8-hour work day, 6 days a week. Usual business hours in Malaysia are between 9am and 5pm, Monday to Friday.

Holiday

A minimum of 10 paid holiday days are prescribed by the Malaysian Labor Law.

Termination

An employment contract can be terminated in Malaysia if there is deemed just cause to do so. Recognised grounds for dismissal include gross misconduct, poor performance, redundancy and business closure. Employees must be given notice of termination unless their dismissal was due to misconduct or poor performance.

Want to know more about international payroll?

Download our international payroll guide for more information on international payroll and discover key considerations.

Download Our Guide

FMP’s Malaysian Payroll and HR Solutions

No matter if you’re looking for payroll and HR in Kuala Lumpur or George Town, FMP’s global payroll and HR experts are here to help. Our services include but are not restricted to:

  • Employment Contracts
  • Payroll Processing
  • Year End Income Tax Reconciliation
  • Coordinating with the Company HR Department
  • Regulatory Compliance
  • Benefits Administration
  • Multi-currency Salary Payments and Bonuses
  • Withholding taxes payments to respective authority
  • Payroll Audit Services
  • Email Payslip Services
  • Pension Administration
  • Employee Local Tax Administration
  • Tax and Labor Consulting
  • Legal representation / Assistance
  • Handling of confidential Payroll
  • Translation Services

Maintain Compliance with Your Malaysian Payroll & HR

FMP Global are ready to help you make the move to Malaysia. Get in touch today and find out more about our international payroll and HR services.

Start your International Expansion Today