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Payroll taxes
in Malaysia.

SALARY PAYMENT IN Malaysian Ringgit (MYR, RM)

CONTRACT LANGUAGES Malay / English

PAYROLL TAX 13.22%

PAYROLL CYCLE Monthly

TIME TO HIRE 24 hours

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What is the average employer tax rate in Malaysia?

At the time of writing, the Corporate Income Tax rate in Malaysia is 24%.

Note that the Corporate Income Tax rate is expected to rise to 25% by the end of 2023.

Taxable income (RM)Tax rate
0 < RM 150,00015%
RM 150,001 to RM 600,00017%
RM 600,001+24%

What is the average employee tax rate in Malaysia?

Personal Income Tax in Malaysia is calculated according to a progressive system of taxation. 

Taxable income is based on yearly income in RM.

Taxable Income (RM)Tax rate 2023
5.000 – 20.0001%
20.000 – 35.000RM150 + 3% of income above 20.000
35.000 – 50.000RM600 + 8% of income above 35.000
50.000 – 70.000RM1,800 + 13% of income above 50.000
70.000 – 100.000RM4,400 + 21% of income above 70.000
100.000 – 250.000RM10,700 + 24% of income above 10.000
250.000 – 400.000RM46,700 + 24.5% of income above 50.000
400.00 – 600.000RM83,450 + 25% of income above 400.000
600.000 – 1.000.000RM133,450 + 26% of income above 600.000
1.000.000 – 2.000.000RM237,450 + 28% of income above 1.000.000
2.000.000+RM517,450 + 30% of income above 2.000.000

Non-residents pay a flat rate of 30% on total taxable income

Employer contributions in Malaysia

Employer contributions in Malaysia total a maximum of 14.45%. 

Employer contributions include; 

  • The Employee Provident Fund/EPF, Malaysia’s compulsory pension scheme which is mandatory for local nationals & permanent residents of Malaysia but voluntary for expats. The employer contribution is 13% (or 12% if the monthly salary is below RM5,000)
  • The Social Security Organization/SOCSO which covers for the Employment Injury Insurance Scheme/EIIS and the Invalidity Pension Scheme/IPS. The maximum employer contribution is 1.25%
  • The Employment Insurance System/EIS funds employment-related benefits and the reemployment placement program. The employer contribution is 0.2%. 
Contribution item Contribution rate
Employees Provident Fund/EPF 12-13%
The Social Security Organization/SOCSO 1.25%
The Employment Insurance System 0.2%

Employee contributions in Malaysia

Employee contributions in Malaysia total a maximum of 11.2%.

Mandatory employee contributions include;

  • The Employees Provident Fund/EPF. Note this is mandatory for local nationals & permanent residents but voluntary for expatriates. The employee contribution totals 11%. 
  • The Employment Insurance System/EIS. The employee contribution is 0.2% of salary. 
Contribution item Contribution rate
Employees Provident Fund/EPF 11%
Employment Insurance System 0.2%

Hiring in Malaysia, Made Easy

Your business can easily hire employees in Malaysia without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.

FAQs

Inland Revenue Board of Malaysia. 

Yes. Employer contributions (maximum) total 14.45%.

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