9th October 2026 - 4 min read
The minimum wage is going up from RM1,700 to RM2,000 a month, starting June 2027. Prime Minister Datuk Seri Anwar Ibrahim announced the increase when he tabled Budget 2027 in the Dewan Rakyat on 9 October, and said it will cover more than four million workers.
Not every worker will get it, though. Micro, small, and medium enterprises (MSMEs) with yearly sales below RM50 million won’t have to pay the new rate. The government also plans a higher minimum wage of RM2,500 for graduates and semi-skilled workers.
If you earn the minimum wage, your basic pay goes up by RM300 a month, or RM3,600 over a full year (our calculation). Because the new rate starts in June, you’ll get seven months of higher pay in 2027. That’s RM2,100 more next year.
Not all of the RM300 reaches your bank account. EPF, SOCSO, and the Employment Insurance System (EIS) are taken out of your pay first, and they go up when your pay goes up. The table below shows a minimum wage payslip before and after June 2027, using today’s contribution rates.
| Item (RinggitPlus Calculation) | Pay At RM1,700 | Pay At RM2,000 |
|---|---|---|
| Basic pay | RM1,700.00 | RM2,000.00 |
| EPF (11%) | – RM187.00 | – RM220.00 |
| SOCSO | – RM8.25 | – RM9.75 |
| EIS | – RM3.30 | – RM3.90 |
| Take-home pay | RM1,501.45 | RM1,766.35 |
Your take-home pay goes up by RM264.90 a month, and another RM33 goes into your EPF savings. You’ll find each of these amounts on your payslip, along with a small Lindung 24 Jam deduction if you didn’t opt out of it.
MSMEs with yearly sales below RM50 million are exempt, which means they don’t have to pay the new rate. Anwar said this gives these businesses room to change the way they operate. He didn’t say how long the exemption will last. If your employer is exempt, they only have to pay you at least RM1,700.
MSMEs employ eight million people, or half of all workers in Malaysia, Anwar said in the same speech. Under SME Corporation Malaysia’s definition, a manufacturer with yearly sales of up to RM50 million counts as an MSME, and so does a services business with sales of up to RM20 million. So most MSMEs come in under the cap. You probably don’t know how much your company sells in a year, so you may not know yet which group you’re in. Small employers also got extra time to pay the new rate in 2022 and 2025, when the minimum wage last went up.
The government will also set a minimum wage of RM2,500 a month for graduates and semi-skilled workers. Anwar said the current minimum wage doesn’t reflect workers’ skills and qualifications, and called this the first step in changing how pay is set. He didn’t say when it starts or which jobs count as semi-skilled.
Government-linked companies (GLCs) and government-linked investment companies (GLICs) are also raising their living wage, the pay they treat as enough to live on, from RM3,100 to RM3,400 a month. This is expected to benefit 230,000 workers. Anwar urged private companies to pay fairer wages too, but that’s a request, not a law.
From June 2027, two people doing the same job could have different minimum pay. A worker at a larger company must get at least RM2,000, while a worker at an exempt small business can still be paid RM1,700. That’s RM300 a month, or RM2,100 from June to December 2027 (our calculation).
The new rate isn’t law yet. Like past increases, it takes effect only when the government publishes a new Minimum Wages Order with the exact start date and exemption rules. Until then, plan your monthly budget around your current pay. Closer to June, ask your HR team or employer whether the new rate applies to you. If it does and you’re paid less than RM2,000 after it starts, you can make a complaint to the Labour Department (Jabatan Tenaga Kerja).
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As a creative content writer, Eloise has covered finance, business, lifestyle topics, and even moonlights as a singer-songwriter outside of RinggitPlus. Her current interests are learning the best ways to optimise spending and credit card hacks to gain more airline miles.
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