Question 1

Does the RM1,700 minimum wage increase EPF, SOCSO, and EIS contributions?

Accepted Answer

Yes, since EPF, SOCSO, and EIS contributions are calculated as a percentage of an employee's gross monthly wage, raising the wage floor to RM1,700 increases the minimum statutory contribution amount for both employer and employee.

Question 2

Does the RM1,700 minimum wage apply nationwide in Malaysia?

Accepted Answer

Yes, the new minimum wage applies across all states in Peninsular Malaysia and is uniform for all sectors of private employment.

Question 3

Does the minimum wage include allowances, bonuses or commissions?

Accepted Answer

No, only basic monthly salary counts. Allowances, bonuses, commissions and benefits are excluded from the RM 1,700 minimum wage calculation.

Question 4

Does the minimum wage apply to foreign workers?

Accepted Answer

Yes, the law covers Malaysian citizens and migrant/foreign workers in the private sector, except domestic servants and apprentices under defined contracts.

Question 5

What penalty does an employer face for paying below the minimum wage?

Accepted Answer

Penalties include fines up to RM 10,000 per employee, RM 1,000 per day for continuing offences, and possibly RM 20,000 or imprisonment up to 5 years for repeated breaches.

Question 6

Does the minimum wage apply if the company has fewer than 5 employees?

Accepted Answer

Yes, though the full requirement applies from Aug 1, 2025; until then, some smaller employers may operate under the RM 1,500 rate until the transition deadline.

Business Guides in Malaysia

Malaysia Minimum Wage RM1700: A Complete Employer Guide

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