14th October 2026 - 5 min read
The minimum wage goes up from RM1,700 to RM2,000 a month from June 2027. But companies with annual sales below RM50 million don’t have to pay it. On 13 October, Economy Minister Akmal Nasrullah Mohd Nasir told the Dewan Rakyat that workers who lose their jobs because of the change can claim under the Employment Insurance System (EIS). If your employer does pay the new rate, you get RM300 more a month and your take-home pay rises by RM264.90.
Prime Minister Dato’ Seri Anwar Ibrahim announced the rise in the Budget 2027 speech and said more than four million workers will benefit. The Budget also proposed a RM2,500 minimum salary for graduates and semi-skilled workers. Anwar didn’t say who counts as semi-skilled or when the RM2,500 starts.
The RM300 goes on your basic pay, so your EPF, SOCSO and EIS deductions go up with it. Between June and December 2027, it adds up to RM2,100. For a Malaysian employee under 60, the monthly payslip changes like this.
| Monthly Payslip | RM1,700 Basic Pay | RM2,000 Basic Pay |
| Your EPF (11%) | RM187 | RM220 |
| Your SOCSO | RM8.25 | RM9.75 |
| Your EIS | RM3.30 | RM3.90 |
| Take-home pay | RM1,501.45 | RM1,766.35 |
| Your employer’s EPF (13%) | RM221 | RM260 |
On top of the RM264.90 rise in take-home pay, your EPF account gets RM72 more a month from both shares. The table assumes no other deductions come off your pay.
The minimum wage counts basic pay only. Allowances, overtime and commission don’t count towards the RM2,000, so your employer can’t make up the difference with a bigger transport allowance.
Akmal also told the Dewan Rakyat that micro, small and medium enterprises (MSMEs) employ 8.09 million people, which is nearly half of all workers. Only workers at these businesses who earn less than RM2,000 miss the pay rise. Akmal said the exemption gives smaller firms time to adjust their finances so they don’t have to cut jobs.
The government hasn’t said how long the exemption lasts, or how it will check whether a company sells less than RM50 million. The Malaysian Employers Federation has asked the government to explain how the RM50 million will be checked. The new Minimum Wages Order isn’t out yet either, so these details could still change before June 2027.
If you’re not sure whether your employer has to pay RM2,000, ask HR in writing and keep the reply. If your employer doesn’t have to pay it, the Minimum Wages Order 2024 still applies. Your employer must keep paying you at least RM1,700 a month. This applies to foreign workers and contract apprentices too, but not to domestic helpers.
If your employer pays you less than the minimum wage, you can complain to the Labour Department. In Sabah and Sarawak, go to the Sabah or Sarawak Labour Department instead. Both are run by the Ministry of Human Resources, not the state government. Keep your payslips, since they show your basic pay month by month.
Under the National Wages Consultative Council Act 2011, an employer convicted of underpaying can be fined up to RM10,000 for each affected worker. The fine grows by up to RM1,000 for every day the offence continues after conviction. Repeat offenders face up to RM20,000 or up to five years in jail. The court can also order your employer to pay you what you’re owed.
The EIS Akmal mentioned is the same EIS that’s taken from your payslip every month. It covers job losses PERKESO accepts, such as retrenchment or your company closing down.
To claim EIS, you need to have paid EIS for at least 12 months in the two years before you lose your job. PERKESO’s EIS page says you must apply within 60 days, through the LINDUNG KERJAYA portal or at a PERKESO counter.
PERKESO pays the Job Search Allowance for three to six months. The more months you’ve paid EIS in the two years before you lose your job, the longer you get it. To get the full six months, you need to have paid EIS every month in that time.
Say it’s your first claim, you qualify for the full six months, and you earn RM2,000. PERKESO works out your allowance from the wage band your salary falls in, not your exact salary, so it uses RM1,950. The Job Search Allowance would work out like this.
| Month | Share Of RM1,950 | Allowance |
| 1 | 80% | RM1,560 |
| 2 | 50% | RM975 |
| 3 and 4 | 40% | RM780 a month |
| 5 and 6 | 30% | RM585 a month |
That adds up to RM5,265 over six months, less than half the RM12,000 you’d have earned. If you find a job early, PERKESO pays 50% of the allowance you haven’t used, up from 25%, for job losses from 1 October 2026.
Check that your payslip shows an EIS deduction every month, since these contributions count towards the 12 months you need to claim. If your employer doesn’t have to pay RM2,000, or you’re not sure, plan your budget around RM1,700 until the government says when the exemption ends. We’ll update this article once the new order is published.
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Christina writes about personal finance with an eye for making the complicated feel straightforward. She is drawn to the everyday money decisions people face and genuinely enjoys finding the clearest way to explain them. Between articles, she is probably napping, on a hiking trail, or terrorising her sister’s cats.
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