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Malaysia to raise minimum wage to RM2,000 from June 2027
Published : Friday, 9 October, 2026 at 6:40 PM
Observer Online Report
Malaysia will raise its monthly minimum wage from RM1,700 to RM2,000 for local and foreign workers from June 2027, Prime Minister Anwar Ibrahim announced on Friday.
He made the announcement while presenting the country’s 2027 budget in parliament, saying the increase is expected to benefit more than four million workers.
Malaysia’s minimum wage regulations apply equally to foreign workers. Employees from Bangladesh, Nepal, 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 RM900. It was raised to RM1,000 in 2016, RM1,100 in 2019, RM1,200 in 2020, RM1,500 in 2022 and RM1,700 in 2025. The latest increase will take the minimum wage to more than double its original rate.
Anwar said micro, small and medium-sized enterprises with annual turnover below RM50 million would be exempt from the new requirement. The exemption is intended to give smaller businesses time to adjust their business models.
He said the gap between workers’ productivity and wages needed to be narrowed, as incomes had failed to keep pace with rising living costs and inflation.
As part of broader efforts to improve the country’s wage structure, the government is also planning to set a minimum monthly salary of RM2,500 for semi-skilled workers and university graduates.
Anwar said the minimum wage establishes only a basic income threshold, while skilled workers were still not receiving pay commensurate with their qualifications and abilities.
The government also plans to tighten tax regulations to discourage the employment of undocumented foreign workers.
Under the proposed measures, companies other than micro, small and medium-sized enterprises would have to pay wages through bank accounts using methods permitted under employment law to qualify for tax relief on wage expenses.
A large number of Nepalese workers are employed in Malaysia. The increase is expected to raise incomes for Nepalese and other foreign workers covered by the minimum wage policy. However, the June 2027 implementation date and the exemption for smaller businesses mean that not all workers will benefit immediately.
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Editor : Iqbal Sobhan Chowdhury
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Published by the Editor on behalf of the Observer Ltd. from Globe Printers, 24/A, New Eskaton Road, Ramna, Dhaka.
Editorial, News and Commercial Offices : Aziz Bhaban (2nd floor), 93, Motijheel C/A, Dhaka-1000.
Phone: PABX- 41053001-06; Advertisement: 41053012; 01793317829, 01550707291, E-mail: [email protected], [email protected] Online: email: [email protected] 41053014; 01550707297 Advertisement: 01550707296
