Malaysia sets RM2,000 minimum wage for June 2027
The increase will cover over four million workers, with an exemption for MSMEs whose annual revenue falls below RM50 million.
A RM2,000 monthly minimum wage will take effect in Malaysia in June 2027, replacing the current RM1,700 rate, Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim said during the presentation of Budget 2027.
Anwar put the number of workers covered at over four million. The government will exempt micro, small and medium enterprises (MSMEs) with revenue of less than RM50 million annually, giving these businesses time to adapt their operating models.
For graduates and semi-skilled workers, the government will introduce a separate RM2,500 monthly minimum as an initial wage-reform measure. Anwar said the minimum wage raised only the earnings floor, while pay for skilled workers remained out of proportion to their qualifications.
Companies outside the MSME category will be eligible for wage-expense tax deductions only when payments go through bank accounts using methods permitted by the Employment Act 1955. Anwar said this would address a loophole that enabled employers to hire undocumented foreign workers. The requirement will not apply to deductions for other expenses.
Government-linked investment companies and government-linked companies have committed to increasing their monthly living-wage benchmark to RM3,400 from RM3,100, benefiting some 230,000 workers, Anwar said. He welcomed that commitment, praised wage-setting efforts by major banking and oil and gas employers, and encouraged other private-sector employers to follow suit.
