RM1,700 minimum wage in Malaysia: what employers must do

If you employ anyone in Malaysia, the RM1,700 minimum wage is now a hard floor under your payroll. The rate was set by the Minimum Wages Order 2024 (gazetted in December 2024), replacing the previous RM1,500, and the Ministry of Human Resources (KESUMA) has confirmed there are no further deferments — every employer, of every size, must comply. This guide sets out exactly who is covered, the two phased dates, what counts towards the RM1,700, how to convert it to an hourly or daily rate, and the penalty if you get it wrong. Carriera is a compliance-focused recruitment and training partner — getting basic pay right is the first thing we check when we benchmark a salary for a client.

What is the minimum wage in Malaysia in 2025 and 2026?

The minimum wage in Malaysia is RM1,700 per month, set by the Minimum Wages Order 2024 and enforced by the Ministry of Human Resources (KESUMA). It rose from RM1,500 and is the rate that continues to apply in 2026 — the order is not re-set each year, so the RM1,700 floor stands until a new Minimum Wages Order is gazetted. Official information sits on the MoHR minimum wage portal (minimumwages.mohr.gov.my).

The minimum wage is created under the National Wages Consultative Council Act 2011 — the same Act that carries the penalties below. See our glossary for plain-language definitions of payroll and wage terms.

When did the RM1,700 minimum wage take effect, and which employers must comply?

The RM1,700 rate came in over two phases. From 1 February 2025 it applied to employers with five or more employees (and to skilled and professional categories regardless of headcount). Employers with fewer than five employees were given a six-month deferment and could keep paying RM1,500 until it expired on 31 July 2025. From 1 August 2025 the order applies to every employer nationwide, with no exemptions, as confirmed in the official KESUMA enforcement announcement.

Does the RM1,700 include allowances and commission?

No. The RM1,700 is basic wages only. When you check whether an employee meets the minimum, you look at basic monthly pay alone — you cannot count allowances, overtime, commission, bonuses, service charge or in-kind benefits towards the threshold. KESUMA has been explicit that employers must review their wage structure so that no employee's basic salary falls below RM1,700. This is the trap most payroll teams fall into: an RM1,500 basic with RM200 of allowances does not satisfy the order.

What is the RM1,700 minimum wage per hour or per day?

The legal minimum is a monthly figure, but you often need an hourly or daily equivalent for part-timers, daily-rated staff and overtime maths. Under the Employment Act, a monthly-rated employee's ordinary rate of pay is the monthly wage divided by 26, so RM1,700 ÷ 26 is about RM65.38 a day. On a six-day week of roughly eight hours a day, that is about RM8.72 an hour. These conversions are illustrative — the binding minimum is the RM1,700 monthly basic wage in the Minimum Wages Order 2024.

Piece-rated workers are not exempt. For an employee paid by piece, commission or output, the employer must ensure that total basic earnings for a normal month's work are at least RM1,700; where output-based pay falls short, the employer must make up the difference to the minimum. The same principle applies to part-timers on a pro-rated basis. For the wider payroll picture — EPF, SOCSO, EIS and PCB on top of basic pay — see our payroll and Employment Act training overview, and the related Employment Act 1955 employer guide.

What is the penalty for not paying the minimum wage?

Underpaying the minimum wage is an offence under the National Wages Consultative Council Act 2011. On conviction, an employer is liable to a fine of up to RM10,000 for each affected employee, plus a further fine of up to RM1,000 for each day the offence continues. A repeat offence can attract a fine of up to RM20,000 or imprisonment of up to five years. These figures are confirmed in the official KESUMA announcement and the National Wages Consultative Council Act 2011 itself.

Because the fine is per employee and accrues daily, a small underpayment across a team can compound into a substantial liability before it is even detected. Complaints can be lodged with the Department of Labour (JTK). Employers are encouraged to lift wages through productivity rather than headcount cuts, supported by the Progressive Wage Policy (gajiprogresif.gov.my).

What should an employer do to comply with the RM1,700 minimum wage?

Compliance is a short, concrete checklist — the risk is in the basic-pay column of your payroll, not the gross figure.

This is exactly where payroll knowledge pays for itself. Carriera Academy runs an HRD Corp-claimable programme — Payroll Administration Skills and the Laws — that walks HR and finance teams through minimum wage, the Employment Act, and statutory deductions so your payslips are right and audit-ready. Browse the full catalogue on our training page, or talk to us about an in-house session.

This guide is general information, not legal advice. For the binding text, refer to the Minimum Wages Order 2024, the National Wages Consultative Council Act 2011, and the Ministry of Human Resources (KESUMA) at minimumwages.mohr.gov.my. Updated 18 June 2026.