EOR Service in Malaysia

Shraddha Saxena

Hire, Onboard and Pay Employees in Malaysia Quickly and Efficiently

Hiring in Malaysia at a glance

CURRENCY
Malaysian Ringgit (MYR)
working hours
45 hours per week
public/bank holidays
11 public holidays
capital
Kuala Lumpur
language
Malay (Bahasa Malaysia), English
date format
DD/MM/YYYY
remote workers
1.2M
tax year
Jan 1 - Dec 31
minimum hourly salary
No minimum wage
CURRENCY
Malaysian Ringgit (MYR)
public/bank holidays
11 public holidays
capital
Kuala Lumpur
language
Malay (Bahasa Malaysia), English
date format
DD/MM/YYYY
tax year
Jan 1 - Dec 31
payroll frequency
Monthly
GDP
USD 406.31 billion (2022)
working hours
45 hours per week

Employer of Record in Malaysia

When your company wants to hire foreign workers in Malaysia, an Employer of Record (EOR) simplifies the process. EORs handle hiring international employees, ensuring compliance, payments, and benefits, even for non-Malaysian companies.


Partnering with Gloroots' Malaysian EOR lets you hire faster, no matter your company's size or business goals. Gloroots' EOR services manage everything, freeing you to focus on your core work. This way, you can discover talent in Malaysia and explore business opportunities without the complexity of regulations.

Why use Malaysia EOR?

When enterprises aspire to expand their operations in Malaysia, the conventional approach necessitates the establishment of a local subsidiary. This process can span several months. 


The second challenge will be hiring in compliance with Malaysia’s labor laws. Malaysian employees are offered various workplace rights according to the Malaysia's Employment Act of 1995. For example, Malaysia’s labor pool has a substantial portion of migrant workers. There are specific regulations governing the employment of these workers, including levies, quotas, and specific terms and conditions.


Gloroots presents a reliable solution for global corporations seeking to tap into Malaysia's talent reservoir without the hassles of dealing with labor laws. Through our Professional Employer Organization (PEO) services, we assume the role of intermediaries, guaranteeing an optimal work experience for employees.



EOR Costs in Malaysia

EOR/ PEO services can be billed using two methods: a fixed yearly fee per employee or a calculated fee based on the company's annual payroll. The first option generally falls within a specific range, while the second option is a percentage of the total payroll.

Gloroots provides an equally competitive platform at an attractive rate. Our pricing guarantees that your company and its employees receive the necessary HR support for optimal performance.

Key Metrics For Foreign Employers

The table below depicts key indicators from the Global Talent Competitiveness Report for employers wishing to hire from Malaysia.

Factors Global Ranking Interpretation
Rule of law 38 Indicates effectiveness of law enforcement
Labour-employer cooperation 30 Indicates positive labor-employee relationships
Reading Maths, and Science 47 Indicates average scores in OECD's survey of 15-year old students
University Ranking 13 Indicates average QS rankings
Labour productivity per employee 47 Indicates total output by the total labor input used to produce that output
Ease of finding skilled employees 52 Indicates findability of skilled talent
Workforce with tertiary education 49 Indicates % of workforce with PG degrees
Digital Skills 15 Indicates prevalence of advanced digital skills in the population

Source: The Global Talent Competitiveness Index 2022

Through the Gloroots’ Recrew platform, you can discover amazing talent in Malaysia.

Why work in Malaysia?

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Risks of misclassification

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Employing in Malaysia

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Tax

Income Tax

Annual Income (MYR) Income Tax Rate
Up to 5,000 0.00%
5,001 - 20,000 1.00%
20,001 - 35,000 3.00%
35,001 - 50,000 6.00%
50,001 - 70,000 11.00%
70,001 - 100,000 19.00%
100,001 - 400,000 25.00%
400,001 - 600,000 26.00%
600,001 - 2,000,000 28.00%
2,000,001 and over 30.00%

Social Security contribution

Employer Payroll Contributions:

Contribution Type Rate Range
Provident Fund (under 60) 12.00% - 13.00%
Provident Fund (over 60) 4.00% - 6.50%
Social Security (SOCSO) 1.75%
Employment Insurance (EIS) 0.20%
HR Development Fund (over 10) 1.00%
Total Employment Cost 18.95% - 22.45%

Employee Payroll Contributions:

Contribution Type Rate Range
Provident Fund (under 60) 11.00%
Provident Fund (over 60) 0.00% - 5.50%
Social Security (SOCSO) 0.50%
Employment Insurance (EIS) 0.20%
Total Employee Cost 11.70% - 17.20%

Separation

Termination Process

In Malaysia, when a company wants to end an employee's job, they usually follow the standard rules set by labor laws. They can't just fire someone without a good reason. They have to give written notice to the government about it.

There are special rules for pregnant employees. They can only be let go if they break their work agreement, do something wrong at work, or if the company is closing down.

Notice Period

Employees have the following minimal notice periods:

Duration of service Notice period (weeks)
<2 4
2 - 5 6
5+ 8

Alternatively, either party can opt for a payment instead of notice.

Severance Pay

In Malaysia, severance pay is obligatory when relevant, but the sum varies depending on the duration of employment.

Years of service Severance pay
<2 10 days’ worth salary for each year of service
2 - 5 15 days' worth salary for each year of service
5+ 20 days' worth salary for each year of service

Probation Periods

In Malaysia, the probationary period for permanent employees typically spans from 1 to 3 months. However, it's important to note that the Employment Act stipulates that employee entitlements remain consistent regardless of whether they are in their probationary period or not.

Start Hiring in Malaysia today

Hiring employees in Malaysia might seem complex due to various regulations to remember. You need to understand employment laws, ensure accurate payments to employees, adhere to fairness and data protection rules, and more. All these factors can make the hiring process appear intricate.

But here's the good news – Gloroots can simplify everything for you. Our comprehensive solutions offer a convenient way to manage all aspects of hiring in Malaysia. Our experts assist with international hiring and complying with payment and work regulations. We handle employment agreements, on-time payments, and benefits, allowing you to concentrate on choosing the best candidates.

You can rely on Gloroots to make global hiring straightforward and hassle-free.

Grow your team in Malaysia

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