Payroll and HR in Malaysia

The International HR & Payroll Company
That Speaks Your Language

At IRIS FMP, we’re able to simplify Malaysian payroll and HR. As a trusted global payroll and HR specialist, one of our 88 in-country teams will help ensure your overseas employees are paid on time, every time.

Navigating the obstacles of global payroll and HR in Malaysia requires expert help. Compliance is always a priority for businesses during any global expansion, especially when it comes to their overseas employees. It can feel overwhelming to understand the differing laws, cultures and regulations. Our expert teams are here to help. We offer:

Location Data

Name

Malaysia

Region

Asia (South-Eastern Asia)

Population

32365998

Calling Code

60

Capital

Kuala Lumpur

Timezone(s)

UTC+08:00

Timezone in Capital

(asia/kuala_lumpur) 6:30 PM

Currency

Malaysian ringgit (MYR)

Main Language

Malaysian(بهاس مليسيا)

Other Business Languages

Malaysian, English

Tax Year Start

1st January

Tax Year Start

31st December

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

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, IRIS FMP 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.

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.

• 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