Malaysia Employment Pass (EP) Minimum Salary Changes : What Employers and Expatriates Need to Know from June 2026

Malaysia is taking a decisive step toward strengthening its local workforce while refining its expatriate employment framework. Effective 1 June 2026, the Ministry of Home Affairs (MOHA) will implement significantly revised minimum salary thresholds for Employment Pass (EP) holders. These changes aim to prioritize local talent, ensure expatriates are hired for higher-value roles, and introduce clearer rules around employment duration and succession planning.

For employers, HR leaders, and expatriates planning long-term careers in Malaysia, understanding these updates is critical. This article explains the new EP salary requirements, validity periods, and their broader implications.

Revised Employment Pass Salary Thresholds (Effective 1 June 2026)

The updated framework introduces clearer distinctions between Employment Pass categories based on salary, seniority, and expected contribution level.

Employment Pass Salary & Validity Comparison Table

This structured approach signals a clear intent to limit lower-cost expatriate hiring while ensuring foreign professionals bring meaningful expertise to the Malaysian workforce.

Key Policy Changes Beyond Salary

1. Clear Employment Duration Caps

Malaysia is introducing defined maximum employment periods to prevent long-term dependency on expatriate workers, especially in junior or mid-level roles.

• EP I & EP II: Valid for up to 10 years

• EP III: Valid for up to 5 years

This marks a shift toward positioning EP III roles as transitional rather than permanent.

2. Mandatory Local Succession Planning

For EP Category III roles in particular, employers will be required to demonstrate local succession planning.

This includes:

• Training and upskilling Malaysian employees

• Transferring knowledge from expatriates to locals

• Preparing local successors before EP expiry

The objective is to ensure that expatriate hires contribute to long-term workforce development rather than replacing local opportunities.

Why Is Malaysia Implementing These Changes?

The revised Employment Pass framework reflects several national priorities:

• Prioritizing Local Talent:
  Higher salary thresholds ensure expatriates are hired only where genuine skills gaps exist.

• Improving Wage Standards:
  The changes prevent wage undercutting and promote fair compensation aligned with role seniority.

• Encouraging Skills Transfer:
  Succession planning requirements formalize knowledge transfer from expatriates to Malaysians.

• Reducing Structural Dependence on Foreign Labor:
  Clear duration limits reinforce sustainable workforce planning.

Implications for Employers

For employers operating in Malaysia, these changes require early planning and strategic workforce alignment.

Key considerations include:

• Higher employment costs for expatriate hires

• Reclassification of roles into appropriate EP categories

• Accelerated local talent development programs

• More rigorous justification for EP III roles

Companies that proactively invest in local capability building will be better positioned to comply with the new framework while maintaining operational continuity.

What This Means for Expatriates

For expatriates, the changes bring greater clarity—but also higher entry requirements.

Opportunities:

• Longer-term stability for senior professionals under EP I and EP II

• Clearer career and salary benchmarks

Challenges:

• Reduced availability of lower-paid expatriate roles

• Greater scrutiny for junior or technical positions

• Increased focus on fixed-term or project-based assignments

Expatriates planning to work in Malaysia should ensure their roles and compensation meet the new thresholds well ahead of June 2026.

Preparing for June 2026

Although the new rules take effect in June 2026, preparation should begin now. Employers are encouraged to:

• Audit their current expatriate workforce

• Review salary structures and contracts

• Design formal succession and training programs

• Seek professional immigration and workforce advisory support

How Slasify Can Help

As Malaysia’s Employment Pass requirements evolve, Slasify helps businesses stay compliant while adapting strategically. We support employers in assessing and classifying roles under the new EP I, II, and III salary thresholds to reduce application risks. Slasify provides end-to-end Employment Pass support, from eligibility checks to renewals and long-term workforce planning.

We also assist companies in meeting local succession planning requirements, helping structure knowledge transfer and transition plans for Malaysian talent. For employers impacted by higher salary thresholds, Slasify offers workforce and cost analysis to evaluate alternative hiring or localization strategies.

Our experts guide HR teams and expatriates through policy changes with clarity and confidence. By combining immigration expertise with workforce insights, Slasify enables businesses to remain compliant, competitive, and future-ready in Malaysia’s changing regulatory landscape.