Hire Employees in Malaysia – Hiring Options, Employment Legislation, and Payroll

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The economy of Malaysia is one of the most important economies in Southeast Asia (in position number six in the area). Malaysia is one of the most open economies in the world with a trade to GDP ratio averaging over 130% since 2010. Openness to trade and investment has been instrumental in employment creation and income growth.

But like many countries around the world, the employment law and the opportunities to hire employees to start a business in the country are not always clear and easy to understand. 

In this guide, we want to offer you a better understanding of the aspects related to employment, so that you can have a better comprehension of how to hire employees in Malaysia and start your business.


Requirements to hire employees in Malaysia

Malaysia has a well-defined set of regulations for employment and deductions and taxation, that all companies hiring in the country have to follow. There are several complications though, with the defined law only applying to certain workers, and a system of mandatory deductions that are separately set and managed.

Employment in Malaysia is governed by the Employment Act 1955. Critically though, this only applies to certain workers (including all manual workers and others with a salary under RM2,000 per month). Employees who are office-based (not considered manual lab