DOSM Report: Almost 35% Of Formal Employees Earn Less Than RM2,000 Per Month

Alex Cheong Pui Yin

4th August 2023 - 3 min read

About 34.8% of Malaysia’s formal employees earn an income of less than RM2,000 per month. This was revealed in Malaysia’s first Employee Wages Statistics Report (Formal Sector) for the first quarter of 2023, published just today by the Department of Statistics Malaysia (DOSM).

In a press release, the chief statistician of DOSM, Datuk Seri Dr Mohd Uzir Mahidin said that this proportion has actually decreased in comparison to the figure recorded back in March 2022, which stood at a higher 40.2%. This is likely attributed to implementation of a higher national minimum wage, which was raised from RM1,200 to RM1,500 last year.

“In the meantime, about 5.2% of total citizen formal employees earned the highest level of wages (RM15,000 and above). However, wage ratio between the highest wage recipient group (90^th percentile) and the lowest wage recipient group (10^th percentile) shows that the highest wage recipient group received more than six times of wages compared to the lowest wage recipient group,” said Dato’ Seri Dr Uzir.

Aside from that, the survey also revealed various other data related to Malaysia’s employee wages, including the median monthly wage. It was found that the median monthly wage in March 2023 for formal Malaysian employees stood at RM2,600 – which is barely above the new poverty line income (PLI) of RM2,589.

In terms of gender, male formal employees made up 55.5% of the total 6.45 million formal Malaysian employees, earning a monthly median wage of RM2,664. Meanwhile, female employees accounted for the remaining 44.5%, with a slightly lower monthly median wage of RM2,545.

Age-wise, formal employees aged between 40 to 44, as well as between 45 to 49, earned the highest median monthly wage in March 2023, coming in at RM3,500. These two groups made up nearly 20% of the total formal employee group. “Subsequently, median monthly wages start to show a decrease for age group 50 to 54 years with median monthly wages of RM3,400 in March 2023. On the other hand, age group below 20 years received lowest median monthly wages amounting to RM1,500 in March 2023,” DOSM noted in its report.

In unveiling the Employee Wages Statistics Report, DOSM said that this report is the first product that has been successfully published using data collected via the Central Database Hub (PADU). Briefly, PADU is a database developed to collect and combine socio-economic information, providing the government with real-time data to better construct its policies and improve the decision-making process.

Additionally, DOSM clarified that the wages estimated in this report took into account all monetary rewards provided to employees, including bonuses, commissions, and other allowances paid. Moving forward, the department also hopes to improve the publication by incorporating more details, such as the size of the organisation, type of industries, and level of skills and occupation.

Separately, Economy Minister Rafizi Ramli – who launched the Employee Wages Statistics report today – urged employers to avoid using the RM1,500 minimum wage as the starting pay for skilled workers. He said that that the minimum wage was set as a benchmark for unskilled workers, and fresh graduates or professionals should receive remuneration packages that correspond to their skill sets. He also stressed the necessity of implementing a progressive wage policy as soon as possible.

(Sources: DOSM [1, 2], New Straits Times)

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Alex Cheong Pui Yin

Previously covered recruitment-related stories and had a short stint as a copywriter for the property industry. She subsequently developed an interest in investment and robo-advisors.

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