Minimum wage in Malaysia for small businesses: RM1,700 now, RM2,000 from 2027

Short answer: Malaysia's minimum wage is RM1,700 a month. Since 1 August 2025 it applies to all employers, including small shops with fewer than five staff. It is measured on basic wage, so allowances don't count. Staff paid by commission must still get at least RM1,700 for the month. Budget 2027 announced RM2,000 from June 2027, with an exemption for MSMEs with annual sales below RM50 million. That change takes effect only once a new order is gazetted.

This guide is general information, not legal advice. Checked 27 October 2026. Confirm your situation with JTK, an HR adviser or your accountant.

What is the current minimum wage?

The Minimum Wages Order 2024 sets one national rate for all of Malaysia.

Pay basis	Minimum
Monthly	RM1,700
Hourly	RM8.72
Daily, 6-day week	RM65.38
Daily, 5-day week	RM78.46
Daily, 4-day week	RM98.08

When did it apply to small businesses?

• 1 February 2025: employers with 5 or more employees, and all employers in professional activities.
• 1 August 2025: all other employers, including shops with 1 to 4 staff.

There is no longer a small-business delay. If you employ anyone other than a domestic servant, RM1,700 applies. That includes foreign workers.

What counts towards the minimum wage?

The minimum is measured on basic wage:

• Counts: basic salary.
• Doesn't count: allowances, incentives, bonuses and other payments on top.
• Commission, piece-rate and task-paid staff: their total pay for the month must still reach at least RM1,700. If a slow month leaves them short, the employer tops up the difference.

A worker agreeing to less does not make it legal. Paying below the minimum is still an offence.

Example: commission-paid staff in a slow month

A stylist is paid 40% commission and brings in RM3,500 of services this month.

40% × RM3,500 = RM1,400 Shortfall: RM1,700 − RM1,400 = RM300 top-up

For more commission examples, see how to calculate barber commission.

What are the penalties?

Under the National Wages Consultative Council Act 2011 (Act 732):

• a fine of up to RM10,000 for each employee underpaid
• up to RM1,000 a day if the offence continues after conviction
• for repeat offences, up to RM20,000 or up to 5 years in jail

What changes in 2027?

The Budget 2027 speech (9 October 2026) said:

• the minimum wage will rise from RM1,700 to RM2,000 from June 2027
• MSMEs with annual sales below RM50 million will be exempted, to give them time to adjust
• a RM2,500 minimum for semi-skilled workers and graduates is planned as a first step

What we don't know yet:

• How long the MSME exemption lasts. The speech did not say.
• The legal details. RM2,000 needs a new Minimum Wages Order. Until it is gazetted, RM1,700 is the legal minimum.

Most small shops will have sales well under RM50 million, so if the exemption is passed as announced, many will not have to pay RM2,000 from June 2027. Plan for it anyway, because the exemption is temporary.

Other employer costs on top of wages

The minimum wage is not your full cost per employee. Budget for:

• EPF (KWSP): employer contributions for Malaysian employees, based on KWSP's contribution schedule. Since October 2025 wages, foreign workers are also covered, at 2% employer and 2% employee.
• SOCSO (PERKESO): employment injury and invalidity cover, on wages up to RM6,000 a month.
• EIS: the Employment Insurance System, also collected through PERKESO.

Rates change from time to time. Use the official KWSP and PERKESO tables, or payroll software that keeps them up to date.

A simple checklist for small shops

• Every employee's basic wage is at least RM1,700 a month, or the hourly or daily equivalent
• Commission-only staff get a top-up in slow months
• Part-time and daily-rated staff are paid at least the hourly or daily rate
• EPF, SOCSO and EIS are paid on time each month
• Your 2027 budget includes a plan for RM2,000

Where Meikigo fits

Meikigo tracks each staff member's sales and commission automatically, so you can see a commission-paid employee heading for a short month before payday. It is live for barbershops today, with more business types coming. See Meikigo for barbershops.