KUALA LUMPUR (Oct 9): Malaysia will raise the minimum wage to RM2,000 per month in June 2027, from RM1,700 currently.
Micro, small and medium enterprises (MSMEs) with annual revenue below RM50 million will be exempt from the higher minimum wage, to give them time to adjust their business models, Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim said when tabling Budget 2027.
The new minimum wage will cover over four million workers in Malaysia, he noted.
Meanwhile, a minimum wage of RM2,500 per month will be introduced for semi-skilled and graduates as an initial measure as part of reforms to the country’s wage reform framework.
“The minimum wage only raises the income floor for workers, while wages for skilled workers remain disproportionate to their qualifications,” Anwar said.
The prime minister also said the government is closing a loophole that allowed employers to employ undocumented foreign workers.
He said companies other than MSMEs may only claim tax deductions for wage expenses if the wages are paid through a bank account in accordance with payment methods allowed under the Employment Act 1955.
“Tax deductions for other expenses are not subject to this condition,” he said.
Anwar welcomed the commitment by government-linked investment companies (GLCs) and government-linked companies (GLCs) to raise their living wage benchmarked from RM3,100 to RM3,400 a month, which will benefit some 230,000 workers.
He also lauded the efforts of several major employers in the banking and oil and gas sectors for establishing fairer wages, and called on other private-sector employers to do the same.