Millions of workers have a pay rise to look forward to in the latest minimum wage Malaysia update. The minimum wage in Malaysia will go up from RM1,700 to RM2,000 a month from June 2027, a change announced in Budget 2027 and expected to cover more than four million workers. Here is what the new rate means for employees and employers, and what is still being finalised.
Minimum wage Malaysia: where it stands today
The current rate of RM1,700 a month was set by the Minimum Wages Order 2024. It applied from 1 February 2025 to employers with five or more workers, and from 1 August 2025 to all employers. The new RM2,000 figure was announced when Budget 2027 was tabled on 9 October 2026, as reported by The Star.
6 key things to know about the RM2,000 minimum wage
1. The increase is RM300 a month
The move from RM1,700 to RM2,000 is a rise of RM300, or about 18%. For many entry-level workers, that is a meaningful boost to take-home pay, especially as households manage the cost of food, housing and transport.
2. It takes effect from June 2027
The new rate is scheduled to start in June 2027, giving businesses several months to plan. As with past changes, it becomes legally binding through a new minimum wages order, so watch for the official gazette and its exact start date.
3. Smaller businesses are set to get breathing room
Micro, small and medium enterprises with annual sales below RM50 million will be exempt from the new rate, to give them time to adjust their business models. Further details, such as how long the exemption will last, are still to be confirmed, so SME owners should follow updates from the Human Resources Ministry.
4. It applies to basic wages
The minimum covers your basic monthly wage. Overtime, allowances and bonuses are paid on top and do not count towards it. Workers paid by piece rate, task or commission are still entitled to at least the minimum in total each month. Domestic workers are excluded under the current order.
5. A higher starting rate is planned for graduates and semi-skilled jobs
Budget 2027 also announced an initial minimum monthly wage of RM2,500 for semi-skilled workers and graduates. According to Malay Mail, the Human Resources Ministry is drafting Starting Basic Salary Guidelines, based on the Malaysian Standard Classification of Occupations, and aims to roll them out alongside the new order in June 2027.
6. The rate is guided by data
Human Resources Minister Datuk Seri R. Ramanan said five indicators guide the new rate: the poverty line income, median wages, labour productivity, the Consumer Price Index and the unemployment rate, as The Star reported. A review of the 2024 order found that earlier increases did not trigger widespread employment risks or significant inflationary pressure.
The bigger picture for Malaysian pay
The minimum wage Malaysia increase is part of a wider push to lift earnings. The government has linked it to a median wage target of RM3,500 and a goal of raising employees’ share of national income to 40% by 2030. Government-linked companies have also raised their living wage benchmark from RM3,100 to RM3,400 a month, benefiting 230,000 workers.
What workers and employers can do now
- Workers: check your payslip so you know your basic wage, and keep your offer letter and pay records in a safe place.
- Employers: review payroll budgets and pricing early, and check whether your business may qualify for the MSME exemption.
- Everyone: follow official announcements for the gazetted start date and final exemption criteria.
Workers who are paid below the legal minimum can raise a complaint with the Labour Department, or with JTK Sabah or JTK Sarawak in East Malaysia. Under the current law, employers who fail to pay the minimum basic wage face a fine of up to RM10,000 for each employee.
For official guidance and complaints, visit the Department of Labour Peninsular Malaysia (JTKSM) official website.
