19th August 2026 - 3 min read
The government is reviewing the RM1,700 monthly minimum wage, with a possible increase to be considered based on living costs, wage levels and broader labour market indicators.
Human Resources Minister Datuk Seri Ramanan Ramakrishnan said the review is being carried out under Section 25 of the National Wages Consultative Council Act 2011, with the final rate to be set once the National Wages and Gig Economy Consultative Council completes its assessment.
Ramanan said the review will consider the Poverty Line Income and median wages alongside employers’ ability to pay, the Consumer Price Index, labour productivity and the unemployment rate. Malaysia’s average poverty line income rose to RM2,705 per household per month in 2024, up from RM2,589 in 2022, and remains above the current minimum wage.
The wage data also shows why the government is reassessing whether current pay levels are keeping pace with the wider economy. Labour income made up just 33.9% of GDP in 2025, below the government’s 40% target under the 12th Malaysia Plan. Median wages grew by only 0.9% in nominal terms as of March 2026, while real median wages fell 0.8% after accounting for inflation. In other words, workers were earning slightly more on paper, but their pay bought less than it did a year earlier.
The ministry has not conducted a specific study on the living wage, though Bank Negara Malaysia estimated in 2018 that a single person in Kuala Lumpur would need RM2,700 a month to live decently.
The Department of Statistics’ Basic Expenditure of Decent Living measure, known as PAKW, offers a more detailed picture than that single national figure. It reflects differences in living costs across states and household types, with a state-level index ranging from 92.0 in Selangor to 53.7 in Kelantan and Sarawak, where Kuala Lumpur is set as the reference point at 100.
You can check the PAKW estimate for your own state and household size through DOSM’s MyPAKW calculator.
Alongside the minimum wage review, Ramanan said the government’s Progressive Wage Policy is also underway to shift pay structures toward skills and productivity. Of 5,910 employers who applied under the policy, 4,025, or 68.1%, went on to raise wages and claim incentives, benefiting 51,363 workers and exceeding the initial target of 50,000.
The government has disbursed more than RM73 million in incentives so far, including RM10.2 million for entry-level workers and RM62.9 million for non-entry-level workers. Eligible employers can claim up to RM200 a month for entry-level workers in their first year, and up to RM300 a month for non-entry-level workers after 12 months, provided staff complete at least 21 hours of recognised training.
If you want a pay raise under this scheme, ask your employer if they have signed up through the official Progressive Wage Policy portal, since only employers who register can pass the incentive on to workers.
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Iman writes about personal finance with curiosity. She is interested in the stories behind money, the hesitation around big decisions, and the small habits that shape financial futures. Off the clock, she is either dissecting a film or climbing her way up the leaderboard in her favourite games.
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