Malaysia Minimum Wage 2027: RM2,000 From June, Who's Exempt
Malaysia's minimum wage is to rise from RM1,700 to RM2,000 a month from June 2027, Prime Minister Anwar Ibrahim said when he tabled Budget 2027 on Oct. 9. The rise of RM300, or 17.6%, will cover more than four million workers, Human Resources Minister R. Ramanan said, The Star reported. The speech says MSMEs with annual sales below RM50 million will be exempted, to give them time to adjust their business models. The new rate and the exemption have been announced but are not yet in force.
The Malaysian Employers Federation (MEF) said the government is giving employers until June 1, 2027 to prepare, Bernama reported. The Human Resources Ministry has promised a press conference to explain a separate RM2,500 minimum wage for semi-skilled workers and graduates.
Malaysia's minimum wage at a glance
| Item | Detail |
|---|---|
| Current rate | RM1,700 a month |
| New rate | RM2,000 a month from June 2027 (announced, not yet in force) |
| Increase | RM300, or 17.6% |
| Workers covered | More than 4 million |
| To be exempted (announced) | MSMEs with annual sales below RM50 million |
| New RM2,500 minimum | Semi-skilled workers and graduates; rules to come |
| Living wage at GLICs and GLCs | RM3,100 to RM3,400 a month, for 230,000 workers |
When does the RM2,000 minimum wage start?
From June 2027, the Budget speech says (para. 32), and the minister repeated it. MEF said employers have until June 1, 2027 to prepare. The sources checked on Oct. 12 give no gazette date for the new order.
The current rate came through the Minimum Wages Order 2024, which was gazetted on Dec. 4, 2024 and took effect in two stages, law firm Skrine explains. On Feb. 1, 2025, RM1,700 applied to employers with five or more employees and to employers doing professional activities. On Aug. 1, 2025 it applied to all employers, whatever their size, the Human Resources Ministry said. An employer who fails to pay it commits an offence and can be fined up to RM10,000 for each employee, Rödl & Partner notes.
Who is exempt from the new minimum wage?
- MSMEs with annual sales below RM50 million: the speech says they will be exempted from implementing the new rate (para. 32). The speech gives no end date, MEF calls it a proposed exemption, and no rules have been published.
- MEF welcomed it but asked for clear eligibility criteria and guidelines, including how the RM50 million sales threshold would be assessed (Bernama). The youth group ABIM asked for the scope, duration and number of workers excluded to be clarified (Bernama).
- Under the current order, foreign workers and contract apprentices are covered, but domestic servants are not (The Vibes, Skrine). Coverage under the new rate has not been published.
The RM2,500 minimum for graduates and semi-skilled workers
The government will reform the workers' income framework, "beginning with a minimum wage of RM2,500 a month for semi-skilled workers and graduates" (para. 32). The speech explains that the minimum wage sets a floor but does not reflect the skills and qualifications of the workforce. Ramanan said the ministry will hold a press conference soon on how the RM2,500 rate will be implemented (The Star), and Bernama said the Human Resources Ministry will detail the mechanism in the near future (Bernama). No start date has been given for it, and ABIM said the job categories covered, employer coverage, effective date and mechanism still need clarifying (Bernama).
Other wage measures in Budget 2027
- Government-linked investment companies (GLICs) and government-linked companies (GLCs) have committed to raise their living wage benchmark from RM3,100 to RM3,400 a month from 2027, benefiting 230,000 workers (para. 32).
- Companies other than MSMEs can claim tax deductions on wage costs only if wages are paid through a bank account permitted under the Employment Act 1955 (para. 33, The Edge).
- The government and Grab will share the cost of a RM160 million package from 2027. It is expected to raise median net monthly income by up to RM227 for e-hailing drivers and up to RM100 for p-hailing delivery workers (para. 34).
The Budget is still before Parliament: MPs debate it from Oct. 12 to 22, ministers reply from Oct. 26 to 29 and the committee stage runs from Nov. 2 to 26, Bernama reports. For all the measures, see our Budget 2027 page.
Figures are from the Budget 2027 speech, ministry statements and the reports linked above, as of Oct. 12, 2026. The new Minimum Wages Order and its exemption rules are not yet published, and this page will be updated.
