Malaysia's RM1,700 Minimum Wage: What Employers and Workers Should Know

Malaysia's national minimum wage rose to RM1,700 a month under the Minimum Wages Order 2024. It is one of the most important numbers in the labour market, affecting millions of workers and nearly every small business that hires staff. Whether you are an employer working out payroll or a worker checking your pay, it helps to know exactly how the rules work.

The rules sound simple, a single monthly figure, but questions come up quickly in practice. What about part-timers? Do allowances count? What if someone is paid per delivery or per piece? This guide answers those questions using the official order and ministry guidance, and suggests practical steps for both sides of the payslip.

When It Took Effect

According to the Ministry of Human Resources FAQ, the RM1,700 minimum wage was rolled out in two stages:

• 1 February 2025: for employers with five or more employees, and for employers carrying out professional activities classified under MASCO, regardless of headcount.
• 1 August 2025: for all remaining employers, after the deferment for businesses with fewer than five employees ended.

The order does not apply to domestic workers, as defined in the relevant employment laws, so households employing helpers should refer to the specific rules for that sector. Malay Mail reported that the ministry confirmed the rate also covers non-citizen employees and contract apprentices.

Daily and Hourly Rates

For workers paid by the day or hour, the gazetted Minimum Wages Order 2024 sets equivalent rates. The hourly rate is RM8.72, and daily rates depend on how many days a week the person works:

• Six days a week: RM65.38 a day
• Five days a week: RM78.46 a day
• Four days a week: RM98.08 a day

Workers paid only by piece rate, tonnage, task, trip or commission must still receive at least RM1,700 a month under the order.

What Counts Towards the Minimum

This is where many misunderstandings happen. Under the National Wages Consultative Council Act, the ministry's FAQ explains that minimum wage refers to basic wages. It does not include allowances, incentives or other additional payments. So an employer cannot pay a lower basic salary and top it up with a transport allowance to reach RM1,700.

Check the basic salary line on the payslip, not the total. That is the figure that must be at least RM1,700 for a full-time monthly-rated worker.

For Workers: What to Check

1. Your basic pay on your payslip meets the minimum for your working pattern.
2. Overtime is calculated correctly if you work beyond normal hours.
3. Statutory deductions such as EPF, SOCSO and EIS appear correctly. Our guide to reading your payslip explains each line.
4. If you believe you are underpaid, raise it with HR or your employer first, then contact the Labour Department (JTK) or the Ministry of Human Resources for advice.

For Small Employers: Practical Steps

For a small cafe, shop or workshop, the higher wage floor is a real cost. Non-compliance is an offence under the Act, as Bernama noted when the rate took effect. Some practical steps:

• Audit every role to make sure basic pay meets the minimum, including part-timers on daily or hourly rates.
• Update contracts and payroll so basic wages and allowances are clearly separated.
• Review pricing. Many businesses adjust prices gradually rather than in one big jump. Our guide to pricing and margins has a framework for working out margins.
• Look at productivity: better scheduling, simple digital tools for orders and stock, and cross-training staff can reduce waste and overtime.
• Remember related costs: EPF, SOCSO and EIS contributions are calculated on wages, so they rise too.
• Explore training support: upskilling programmes can help staff take on more valuable work over time.

The Bigger Picture

Minimum wage rules aim to protect the lowest-paid workers as living costs rise, while employers worry about cost pressure. Both perspectives matter. For workers, the minimum is a floor, not a ceiling; building skills is still the surest route to higher pay. For businesses, investing in efficiency and staff retention often pays back in lower turnover and better service. Hiring and training a replacement worker takes time and money, so keeping good staff is usually cheaper than constantly recruiting new ones.

FAQ

Does the minimum wage apply to part-time workers?

Yes. Part-timers should be paid at least the hourly or daily equivalent for the hours or days they work.

Are allowances included in the RM1,700?

No. The ministry's FAQ says minimum wage refers to basic wages and excludes allowances and incentives.

Does it cover foreign workers?

According to the ministry's statement reported by Malay Mail, yes, the order applies to non-citizen employees, though not to domestic workers.

The RM1,700 minimum wage is now the baseline for almost every job in Malaysia. Workers should know their rights and check their payslips; employers should audit payroll, plan pricing and invest in productivity. Clear information helps both sides.