EMPLOYMENT & HR LAW
Annual, sick and hospitalisation leave in Malaysia — what employers must give
The three entitlement tables in one place, the 2023 change most English-language guides still get wrong, and what the Act does when two kinds of leave land on the same day.
Under the Employment Act 1955, paid annual leave is 8, 12 or 16 days a year by length of service; paid sick leave where no hospitalisation is needed is 14, 18 or 22 days; hospitalisation leave is a further 60 days; and eleven gazetted public holidays are paid on top of all of it. Since 1 January 2023 sick leave and hospitalisation leave are separate entitlements, not a shared ceiling.
- Hospitalisation leave sits on top of sick leave, not inside it. The Labour Department's table puts the combined ceiling at 74, 78 or 82 days a year.
- The RM4,000 line does not touch leave — only overtime, rest-day and holiday work pay and termination benefits.
- Annual leave is in addition to rest days and paid public holidays.
- Unused annual leave lapses twelve months after the service year that earned it; carry-forward is not required.
- Failing to grant leave is an offence, with a general fine of up to RM50,000 plus an order to pay the leave anyway.
Almost every leave question a Malaysian employer has is answered by three sections of one statute. This is the entitlement half of our Employment Act 1955 employer guide: sections 60E, 60F and 60D.
Who this applies to
Which employees do these leave entitlements cover?
Malaysia's Employment Act 1955 leave entitlements cover private-sector employees in Peninsular Malaysia and the Federal Territory of Labuan on a contract of service, whatever they earn, subject to the First Schedule's excluded categories. The Employment (Amendment) Act 2022 extended the Act irrespective of wages from 1 January 2023, and the First Schedule's RM4,000 threshold removes higher earners from a short named list that does not include leave.
The Department of Labour (JTKSM) states the carve-out plainly: an employee above RM4,000 a month, other than a manual worker, loses overtime pay, rest-day pay, public-holiday work pay and termination benefits. In the First Schedule that is subsections 60(3), 60A(3), 60C(2A), 60D(3) and 60D(4) and section 60J — nothing else.
Section 60E
How many days of annual leave must you give?
Under section 60E of Malaysia's Employment Act 1955, paid annual leave is eight days for every twelve months of continuous service under two years, twelve days from two to under five years, and sixteen days at five years or more. An employee who has not completed twelve months in the year their contract ends is owed leave in direct proportion to completed months.
| Length of continuous service | Annual leave (s. 60E) | Sick leave, no hospitalisation (s. 60F) | Hospitalisation leave (s. 60F) | Combined medical leave (JTKSM) |
|---|---|---|---|---|
| Under 2 years | 8 days | 14 days | 60 days | 74 days |
| 2 to under 5 years | 12 days | 18 days | 60 days | 78 days |
| 5 years or more | 16 days | 22 days | 60 days | 82 days |
Annual leave accrues per twelve months of continuous service; medical leave runs per calendar year. Public holidays are owed on top of every row.
Two rules trim it. Unpaid leave exceeding thirty days in aggregate within any twelve months is disregarded when computing length of service, and an employee absent without permission or reasonable excuse for more than ten per cent of the working days in that period loses the year's leave entirely.
One widely used English-language guide stops at the two-year band and never reaches the sixteen days that fall due at five years. Sixteen days plus eleven paid public holidays is 27 paid non-working days before anyone is ill — a line in the cost of hiring an employee.
Leave nobody takes
Can you refuse annual leave, and does unused leave carry forward?
You may refuse a requested date but not the entitlement: the Employment Act 1955 gives no right to a chosen day and requires no carry-forward. The employer shall grant and the employee shall take the leave within twelve months of the end of the service year that earned it; an employee who fails to take it then ceases to be entitled. Payment in lieu needs your request and their written agreement.
That duty runs both ways: declining a specific date for operational reasons is lawful, but failing to grant the leave at all is an offence in its own right, so a rota that makes leave impossible to take creates the liability rather than saving the wage bill. On termination the employee may take, before it takes effect, both the leave due from the preceding twelve months and the leave accrued that year; if the contract ends first, you pay the ordinary rate of pay for every untaken day.
The rule most guides still get wrong
How much sick leave — and is hospitalisation leave on top of it?
Paid sick leave where no hospitalisation is necessary is 14 days a calendar year under two years' service, 18 days from two to under five, and 22 days at five years or more. Where hospitalisation is necessary, a further 60 days applies in the same year. Since 1 January 2023 the two are separate, not a shared ceiling.
This is the rule most English-language guidance has not caught up with. OmniHR's hospitalisation-leave guide, updated 1 July 2026, still tells employers that “if 14 days of sick leave are used, only 46 hospitalization days remain”. That was the position before 1 January 2023: the Department of Labour lists the separation of sick and hospitalisation leave among the primary amendments taking effect that day.
JTKSM settles it twice. Its 2025 sick-leave infographic says of the 60 days:
“Cuti Hospitalisasi 60 hari tidak termasuk cuti sakit biasa.”
— Jabatan Tenaga Kerja Semenanjung Malaysia: 60 days of hospitalisation leave, not including ordinary sick leave.
Its FAQ on the 2022 amendments publishes the totals outright: 74, 78 and 82 days by length of service. That table appears in Bahasa Malaysia only.
Two details attach. An employee certified ill enough to need hospitalisation, but not hospitalised for any reason, is deemed hospitalised — the 60 days are not gated on a bed. And an employee who does not inform or attempt to inform you within 48 hours of the leave starting is deemed absent without permission.
Section 60D
How many paid public holidays must you give?
Malaysian employers must give eleven gazetted public holidays a year, paid. Section 60D of the Employment Act 1955 fixes five of them: National Day, the Birthday of the Yang di-Pertuan Agong, the Birthday of the Ruler or Yang di-Pertua Negeri of the state where the employee mainly works (or Federal Territory Day), Workers' Day and Malaysia Day.
You choose the remaining six, and must exhibit a notice of them conspicuously at the place of employment before each calendar year begins. Where a gazetted holiday falls on a rest day or another public holiday, the next working day becomes a paid holiday in substitution. An employee absent without your consent immediately before or after one loses holiday pay for it, absent a reasonable excuse.
Two entitlements, one day
What happens when two kinds of leave collide?
Malaysia's Employment Act 1955 settles the common collisions in the employee's favour. Annual leave is in addition to rest days and paid holidays. Sick or maternity leave arising during annual leave gives those days back. A public holiday inside sick or annual leave is replaced. Paid sick leave stops where maternity allowance or SOCSO payments start.
- Falling ill during annual leave returns the days. Where an employee on annual leave becomes entitled to sick or maternity leave, the annual leave is deemed not taken.
- A public holiday inside leave is replaced. If one falls during sick leave, annual leave or temporary disablement, you grant another paid day instead.
- Sick leave stops where other payments start — maternity allowance, disablement compensation, or SOCSO temporary-disablement payments.
What the mistake costs
What does getting leave wrong actually cost?
Failing to grant annual leave or sick leave is a criminal offence, not an administrative slip. On conviction the court orders you to pay the leave anyway: the ordinary rate of pay for every annual-leave day not granted, on top of the wages already paid for the work done. The general fine is up to RM50,000.
That exposure runs per employee and per year, which is what turns a wrong entitlement table in a staff handbook into a number.
If your team has not re-read sections 60D, 60E and 60F since the amendments, Carriera Academy runs Employment Act, HR and payroll training claimable from your HRD Corp levy — the mechanics are in our HRD Corp claim guide.
Still have questions?
Leave entitlements — employer FAQ
Is hospitalisation leave included in the 14 days of sick leave?
Do employees earning more than RM4,000 a month get annual and sick leave?
What if an employee does not tell us about their MC in time?
Sources: the annual-leave bands and provisos, the lapse and termination rules, the sick and hospitalisation entitlements, the deemed-hospitalisation and 48-hour rules, the public-holiday provisions, the First Schedule wage threshold and the penalties in sections 99A, 100(4) and 100(5), all from the Employment Act 1955 (Act 265), 2023 reprint; the 74/78/82 totals and the scope of the RM4,000 carve-out from the JTKSM FAQ on the 2022 amendments; the quoted line from the JTKSM 2025 sick-leave infographic; the commencement date and irrespective-of-wages scope from the Department of Labour's amendment summary; the quoted pre-2023 combined ceiling as still published by OmniHR's hospitalisation-leave guide (updated 1 July 2026). Reviewed 7 September 2026. General information for employers, not legal advice.
Rewriting a leave policy, or covering someone who is away?
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