The Malaysian government has officially announced it will be raising the minimum wage from RM1,700 to RM2,000. These changes were announced during the tabling of Budget 2027 and will go into effect in June 2027.
However, there are some exceptions to this rule. Prime Minister Datuk Seri Anwar Ibrahim said that micro, small, and medium enterprises (MSMEs) with annual revenues of less than RM50 million would be exempted from the increase in order to give them time to adapt their business model.
“The gap between workers’ productivity and wages must be narrowed, as the cost-of-living burden stems from incomes failing to keep pace with rising prices,” Anwar said during the tabling of Budget 2027 at the Dewan Rakyat earlier today. “This means more than four million workers will be covered by the new minimum wage rate,” he added.
Anwar also said that the government will also introduce a minimum monthly salary of RM2,500 for semi-skilled workers and graduates. The measure is part of broader reforms to the country’s wage framework. “The minimum wage only raises the income floor for workers, while wages for skilled workers remain disproportionate to their qualifications,” he said.
Meanwhile, the prime minister welcomed commitments by government-linked investment companies (GLICs) and government-linked companies (GLCs) to raise their living wage benchmark from RM3,100 to RM3,400 a month. The move is expected to benefit around 230,000 workers.
Anwar noted several major employers in the banking and oil and gas sectors had also introduced more reasonable wages. He then urged all private-sector employers to do the same.
Lastly, the government is looking to curb the employment of undocumented foreign workers by tightening the conditions for claiming tax deductions on salary expenses. Anwar said companies, with the exception of MSMEs, would only be eligible for these deductions if wages were paid through bank accounts in accordance with payment methods permitted under the Employment Act.
(Source: RTM via YouTube)
