KATHMANDU : Malaysia will increase its minimum monthly wage from RM 1,700 to RM 2,000 starting June 2027, a move expected to benefit more than four million workers, including Nepali migrant workers.
Prime Minister Anwar Ibrahim announced the increase while presenting the country’s 2027 budget to Parliament on Friday. The new rate is intended to help workers cope with rising living costs and improve household incomes.
Malaysia’s minimum wage regulations also apply to foreign workers, meaning eligible employees from Nepal, Bangladesh, Indonesia and other countries are entitled to the same statutory minimum basic wage as Malaysian workers.
Malaysia introduced its minimum wage policy in 2013, setting the monthly rate at RM 900. It subsequently increased to RM 1,000 in 2016, RM 1,100 in 2019, RM 1,200 in 2020, RM 1,500 in 2022 and RM 1,700 in 2025. The latest increase will bring the minimum monthly wage to more than double its original level.
Anwar said micro, small and medium-sized enterprises with annual turnover below RM 50 million would be exempt from the new requirement. The exemption is intended to give smaller businesses time to adjust their operations and business models.
“We need to narrow the gap between workers’ productivity and their wages. The cost-of-living burden has grown as incomes have failed to keep pace with rising prices,” Anwar said during the budget presentation.
The government also plans to introduce a minimum starting monthly salary of RM 2,500 for semi-skilled workers and university graduates as part of broader efforts to improve the country’s wage structure.
“The minimum wage sets only a floor for workers’ earnings. Skilled workers are still not being paid in line with their qualifications and skills,” Anwar said.
In a separate measure, the government plans to tighten tax rules to discourage the employment of undocumented foreign workers. Companies other than micro, small and medium-sized enterprises will be required to pay wages through bank accounts, using methods permitted under employment law, to qualify for tax deductions on wage costs, according to Anwar.
Malaysia is a major destination for Nepali migrant workers, many of whom are employed in manufacturing, construction, services and other sectors. The wage increase could improve earnings for Nepalis covered by the minimum wage regulations.
However, the new rate is scheduled to take effect in June 2027, and the exemption for smaller businesses means its implementation will not be uniform across all employers from the outset.
FACEBOOK COMMENTS