Malaysia EP Salary 2026: New Expat Rules and the Minimum Wage

Key Takeaways

• Since June 1, 2026, a Malaysian Employment Pass (EP) needs a basic monthly salary of at least RM20,000 in Category I, RM10,000 in Category II, and RM5,000 in Category III, or RM7,000 for Category III roles in manufacturing and manufacturing-related services. The Category I and II floors doubled from RM10,000 and RM5,000, and Category III rose from RM3,000.
• Only basic salary counts. The Immigration Department's booklet on the policy says the threshold is basic monthly salary, taxable in Malaysia, and excludes allowances, incentives, bonuses, and salary paid outside Malaysia.
• There is now a cap on how long an expatriate can work for the same employer, in the same position and category, on an EP: up to 10 years in Category I or II and up to 5 years in Category III. From January 1, 2027, Category II and III applications must include a succession plan to prepare a local employee for the role.
• Passes issued before June 1, 2026, stay valid until they expire, but every renewal submitted on or after that date has to meet the new floor. Category III holders whose applications are submitted on or after June 1, 2026, can now apply to bring dependents, which the old rules did not allow.
• Malaysia's minimum wage is a separate rule. For 2026 it is RM1,700 a month, or RM8.72 an hour, under the Minimum Wages Order 2024. It has applied to every private-sector employer since August 1, 2025, and it covers foreign workers as well as Malaysians.

Malaysia's revised Employment Pass salary policy has been in force since June 1, 2026. An EP now needs a basic monthly salary of at least RM20,000 in Category I, RM10,000 to RM19,999 in Category II, and RM5,000 to RM9,999 in Category III, with a higher RM7,000 floor for Category III roles in manufacturing and manufacturing-related services. The rules apply to every new and renewal application submitted on or after June 1, 2026.

The same policy caps how long an expatriate can work for one employer on an EP, adds a succession-plan requirement from January 1, 2027, and lets Category III holders bring dependents for the first time, for applications submitted on or after June 1, 2026. This page sets out each change as the Expatriate Services Division (ESD) of the Immigration Department of Malaysia publishes it, and what it means for the employer and for the pass holder.

If you need Malaysia's minimum wage rather than an EP floor, it is RM1,700 a month for 2026, and it applies to almost every private-sector worker, local or foreign. It has its own section below, with the daily and hourly rates.

Updated September 30, 2026. This page first went up in January 2026, before the new rules took effect. It now follows ESD's booklet and FAQ on the revised policy, including the January 1, 2027, start date for succession plans, and it adds Malaysia's minimum wage for 2026.

1. Malaysia's Employment Pass Salary Thresholds From June 1, 2026

The category of an Employment Pass follows the basic monthly salary band of the role. The table sets the old floors beside the new ones, with the new limit on how long a pass holder can work for one employer.

What counts as salary

The threshold is basic monthly salary, and it has to be salary that is taxable in Malaysia. ESD excludes allowances, incentives, and bonuses, and it excludes any salary paid outside Malaysia. A package of RM12,000 a month made up of RM9,000 basic salary and RM3,000 in allowances qualifies for Category III, because only the RM9,000 counts.

The manufacturing floor for Category III

The RM7,000 floor applies to companies in the manufacturing sector that hold a manufacturing license or a letter confirming exemption from one, and to manufacturing-related services: selected service sectors under the Malaysian Investment Development Authority (MIDA) that have approval for incentives, a status, or grants. Both groups fall under the purview of the Ministry of Investment, Trade and Industry (MITI) and MIDA.

Sources for this section: ESD's Revised Expatriate Salary Booklet ↗, pages 2 and 4; ESD's announcement of January 15, 2026 ↗; and the FAQ on the revised policy ↗ prepared by the Ministry of Home Affairs (MOHA), the Immigration Department, MIDA, the Malaysia Digital Economy Corporation (MDEC), and other agencies, updated February 12, 2026, questions 9, 10, and 20. All read September 30, 2026.

2. How Long an Employment Pass Lasts Now

Under the old policy the limits were per application: a Category I pass could run up to five years, a Category II pass up to two years, and a Category III pass at most 12 months. The revised policy puts a ceiling on the whole stay with one employer instead, in the same position and EP category. That ceiling is 10 years in Category I and II and 5 years in Category III.

Each pass is issued for between 1 and 60 months, depending on the employment contract and the approval of the Expatriate Committee. The count is tied to the employing company. ESD's booklet says it runs from the first EP approval, and the FAQ on the revised policy says the calculation applies from June 1, 2026. Neither says whether years on an EP before that date count, so confirm a long-serving holder's position with ESD before planning around the cap. When an expatriate moves to a new employer, the count starts again from the date of employment with that company. When a pass holder moves to a different category, it starts from the date the new category is issued. MOHA's official questions and answers say any extension beyond the cap is evaluated case by case, based on national interest.

Existing passes and renewals

A pass issued before June 1, 2026, stays valid until its expiry date, and the company does not need to do anything. The change arrives at renewal. A renewal submitted on or after June 1, 2026, has to meet the revised salary floor, even if nothing else about the job has changed. The FAQ on the revised policy gives the example of a Category III holder on RM3,500 a month, who now needs at least RM5,000 to renew. A renewal can be submitted as early as three months before the pass expires, and the current pass has to be valid when it is.

Succession plans, from January 1, 2027

ESD phased this part in. From January 1, 2027, every Category II and Category III application must include a succession plan: the employer's structured plan to prepare a local employee to take over the expatriate's role within the permitted period. ESD says it can include the roles and responsibilities to be handed over, training and mentoring by the expatriate, a timeline for the local employee to be ready, and a plan to keep operations running through the handover. MOHA's FAQ warns that an employer that fails to carry out its plan may have future applications affected or rejected.

Dependents for Category III

Category III holders whose applications are submitted on or after June 1, 2026, can apply for dependents, which the old policy did not allow. A Dependant Pass covers a spouse and children under 18. Parents, parents-in-law, children aged 18 to 25, and a common-law spouse are eligible for a Long-Term Social Visit Pass. Both depend on meeting the immigration conditions at the time of application, including salary eligibility and insurance cover, and a Category III pass issued before June 1, 2026, stays under the old rule.

Sources for this section: ESD's Revised Expatriate Salary Booklet ↗, pages 1 to 4; the FAQ on the revised policy ↗, questions 4, 11 to 13, 16, 19, and 20; ESD's update of May 26, 2026 ↗ on the succession-plan date; and MOHA's official questions and answers on the policy ↗, sections C to E, questions 14, 18, and 20. All read September 30, 2026.

3. Why Malaysia Raised the Thresholds

The Cabinet approved the revised policy on October 17, 2025, and MOHA announced it on January 14, 2026. It replaces an expatriate salary policy that dated from an Economic Council decision of December 20, 2016. ESD ties the change to the Thirteenth Malaysia Plan (RMK-13), which aims to reduce reliance on foreign labor and give priority to suitably qualified local talent.

MOHA gives the purpose of the higher floors as keeping expatriate hiring focused on high-impact expertise, in roles that local workers cannot fill. It describes Category I as covering strategic positions and critical expertise that contribute directly to economic growth and technology transfer.

Sources for this section: ESD's announcement of January 15, 2026 ↗ and MOHA's official questions and answers ↗, sections A and B, questions 5 to 7. Both read September 30, 2026.

4. What Employers Need to Do Now

An Employment Pass is the employing company's application. The company in Malaysia signs an employment contract with the expatriate and pays a fixed monthly salary, and it applies through ESD. MYXpats, a subsidiary of Talent Corporation Malaysia Berhad (TalentCorp), processes the application.

ESD's booklet sets out the route: registration of the company with ESD, approval under Section 60K of the Employment Act 1955 from the labor department for Peninsular Malaysia (Jabatan Tenaga Kerja Semenanjung Malaysia, or JTKSM), with a job advertisement on MYFutureJobs where that applies, a support letter through Xpats Gateway for regulated sectors, and then the application itself on ESD Online.

With the revised policy in force, the practical steps for an employer are these:

• Check every EP holder's basic salary against the new floor for their category before the renewal date. Allowances and bonuses do not count toward it.
• File renewals early. A renewal can go in up to three months before expiry, and it is assessed under the revised policy.
• Prepare succession plans for Category II and III roles before January 1, 2027.
• Plan for the end of the cap on long-serving pass holders: 10 years with your company in Category I or II, 5 years in Category III, in the same position and category. Confirm with ESD whether a holder's years before June 1, 2026, count toward it.
• Appeal quickly if an application is rejected. Since May 15, 2026, an online appeal has to be submitted within 14 days of the rejection at the Expatriate Committee meeting.

Two Category III routes also closed on June 1, 2026. Companies can no longer apply for a minimum salary exemption for a Category III hire, and the cooling-off period that used to apply to Category III applications no longer applies.

Separately, the Ministry of Human Resources' 1:3 Internship Policy, run through TalentCorp, took full effect on June 1, 2026. For each approved EP, a company must provide structured, paid internships to local students: three for a Category I pass, two for Category II, and one for Category III. Each internship lasts at least 10 weeks and pays at least RM500 a month, more at higher levels of study. A company can appeal to set its commitment at 2% of its total workforce instead, and some companies, such as those operating in Malaysia for less than two years, can apply for an exception.

Sources for this section: ESD's Revised Expatriate Salary Booklet ↗, pages 1 and 2; the FAQ on the revised policy ↗, questions 16, 18, and 21; ESD's announcements on online appeals ↗ (April 30, 2026) and the 1:3 Internship Policy ↗ (March 31, 2026). All read September 30, 2026.

5. What It Means If You Hold the Pass

Look at your basic salary on its own, before allowances. That figure decides your category at renewal. A Category I holder on RM15,000, for example, would be assessed as Category II at renewal, because RM15,000 now sits in the Category II band.

The time limit follows the employer. Ten years in Category I or II, or five in Category III, is the limit for one company, in the same position and category, with any extension decided case by case, and a move to a new employer starts a new count. If you have been with the same employer since before June 1, 2026, ask them to confirm with ESD whether those years count. If you hold a Category III pass applied for on or after June 1, 2026, you can now apply to bring your family.

6. Malaysia's Minimum Wage in 2026

An EP salary floor is a condition for a work pass. The minimum wage is the lowest basic wage any private-sector employer in Malaysia may pay, and it applies to Malaysians and foreign workers alike. For 2026 it is set by the Minimum Wages Order 2024, P.U. (A) 376/2024, made under the National Wages Consultative Council Act 2011. Malaysia sets one rate for the whole country. There is no provincial or city minimum wage of the kind Indonesia sets as UMP and UMK.

• Who it covers. From February 1, 2025, the RM1,700 rate applied to employers with five or more employees and to any employer carrying out a professional activity classified under the Malaysia Standard Classification of Occupations (MASCO). Employers with fewer than five employees, other than those in a professional activity, had to pay at least RM1,500 until July 31, 2025. From August 1, 2025, RM1,700 applies to every employer.
• Foreign workers are included. The order covers all private-sector workers, citizens or not. The one group it excludes is domestic servants, as the Employment Act 1955 defines them.
• Basic wages only. The minimum is measured on basic wages, without allowances, incentives, or other payments, and an employer cannot pay less even if the employee agrees to it.
• Penalties. An employer convicted of failing to pay it faces a fine of up to RM10,000 for each employee, up to RM1,000 for each day a breach continues after conviction, and, for a repeat offense, a fine of up to RM20,000 or up to five years in prison.
• Enforcement. The labor departments of Peninsular Malaysia, Sabah, and Sarawak enforce the order and take complaints from workers.

The Ministry of Human Resources has been reviewing the 2024 order during 2026. Any new rate, including one announced in a Budget speech, applies only from the start date set in a new Minimum Wages Order, so RM1,700 stays the legal minimum until that date: the 2024 order, for example, was gazetted on December 4, 2024, and took effect on February 1, 2025. Check the official minimum wage portal before setting pay for 2027. For the employer's other obligations in Malaysia, see our Malaysia employment guide.

Sources for this section: the Minimum Wages Order 2024, P.U. (A) 376/2024 ↗, cover page and paragraphs 1 to 5, and the Ministry of Human Resources FAQ on the order ↗, questions 1 to 6, 10, and 12, both from the official minimum wage portal ↗ of the National Wages Consultative Council; and Radio Televisyen Malaysia's report of April 6, 2026 ↗ on the review. All read September 30, 2026.

Frequently Asked Questions

What is the minimum salary for a Malaysia Employment Pass in 2026?

For applications submitted on or after June 1, 2026, the minimum basic monthly salary is RM20,000 for Category I, RM10,000 to RM19,999 for Category II, and RM5,000 to RM9,999 for Category III. Category III starts at RM7,000 in manufacturing and manufacturing-related services. The floors apply to new applications and to renewals, and only basic salary taxable in Malaysia counts: allowances, incentives, bonuses, and salary paid outside Malaysia do not.

What changed in Malaysia's expat rules on June 1, 2026?

The salary floors went up in all three categories, and a cap now limits the total time an expatriate can work for one employer on an EP: 10 years in Category I and II and 5 years in Category III. Category III holders whose applications are submitted on or after June 1, 2026, became eligible to bring dependents, and the Category III minimum salary exemption and cooling-off period ended. A mandatory succession plan for Category II and III applications follows on January 1, 2027.

Which EP category does a role fall into?

The category follows the basic salary band: RM20,000 or more is Category I, RM10,000 to RM19,999 is Category II, and RM5,000 to RM9,999 is Category III. MOHA describes Category I as covering strategic positions and critical expertise. Because the bands moved, an existing Category I holder on RM15,000 would be assessed as Category II at renewal.

What happens after 10 years on an Employment Pass?

The 10-year cap, or 5 years in Category III, counts time with the same employing company, in the same position and category. The FAQ on the revised policy applies the calculation from June 1, 2026, and neither it nor ESD's booklet says whether years before that date count, so confirm a long-serving holder's position with ESD. MOHA says any extension beyond the cap is evaluated case by case, based on national interest, and a move to a new employer starts a new count from the date that employment begins.

Do current EP holders have to meet the new salary floors?

Only at renewal. A pass issued before June 1, 2026, stays valid until it expires. A renewal submitted on or after June 1, 2026, must meet the revised floor, so a Category III holder on RM3,500 needs at least RM5,000 to renew. Renewals can be submitted up to three months before expiry.

What is the minimum wage in Malaysia in 2026?

RM1,700 a month, or RM8.72 an hour, nationwide, under the Minimum Wages Order 2024. The daily rate depends on the working week: RM65.38 for six days, RM78.46 for five, and RM98.08 for four. It has applied to every private-sector employer since August 1, 2025, and it is measured on basic wages.

Does Malaysia's minimum wage apply to foreign workers?

Yes. The Ministry of Human Resources says the order covers all private-sector workers, including non-citizens, because Malaysian employment law does not allow pay discrimination between local and foreign workers. Domestic servants are the one group the order excludes.

Is Malaysia's Employment Pass the same as Singapore's?

No. They are separate schemes, and the figures on this page apply only to Malaysia. Singapore's Ministry of Manpower (MOM) currently sets a qualifying salary of at least S$5,600 a month, or S$6,200 in financial services, rising with the candidate's age, and, unless exempted, candidates must also pass its COMPASS points framework. Those floors rise to S$6,000 and S$6,600 for new applications from January 1, 2027, and for renewals of passes expiring from January 1, 2028, as MOM's eligibility page ↗ sets out, read September 30, 2026.

Where We Fit In

More than 900 companies use our employer of record and global payroll services to hire and pay people in 150+ countries.

The Employment Pass itself is issued under the Immigration Department of Malaysia on the application of the employing company, and the salary floors on this page apply to that employer. For the Employees Provident Fund (EPF) and the other contributions an employer pays on top of salary for foreign staff, see our guide to EPF for foreign workers.