How do you hire a Malaysian employee in 2026?
Malaysian employees have unfair dismissal protection from their very first day. There is no qualifying period. Notice starts at 4 weeks and scales with tenure. Three payroll funds go live on day one: EPF, SOCSO, and EIS.
· Malaysia guide
Illustration · Kuala Lumpur, Malaysia
The Malaysia hire process has five steps. Offer letter, work-permit check, written employment contract, EPF and SOCSO registration, first payday.
The written contract must be given before or on the employee's first day. Three funds go live immediately: EPF (pension), SOCSO (social security), and EIS (employment insurance).
Dismissal protection applies from the first day of work. There is no qualifying period. Minimum employer notice is 4 weeks for staff with under two years of service.
What does the end-to-end Malaysia hire process look like?
Five steps from accepted offer to first payslip: offer letter, work-authorisation check, written employment contract, EPF and SOCSO and EIS registration, first payday.
The key day-one task is fund registration. EPF, SOCSO, and EIS must all be set up before or on the first payroll run.
| Step | What happens | Owner | Timing |
|---|---|---|---|
| 1. Offer letter | Written offer with role, salary, start date, and key terms | Client / Teamed drafts | Same day after verbal accept |
| 2. Work-authorisation check | Verify MyKad or passport for Malaysian citizens and PRs; confirm valid Employment Pass for foreign nationals | Teamed | Before the employee starts |
| 3. Written employment contract | Written particulars of employment under the Employment Act 1955 | Teamed (legal employer) | On or before day one |
| 4. EPF, SOCSO, and EIS registration | Register the employee with the Employees Provident Fund, the Social Security Organisation, and the Employment Insurance System; collect MyKad number and bank details | Teamed | Days 1 to 7 |
| 5. First payday | First payslip issued; PCB (Monthly Tax Deduction) remitted to LHDN by the 15th of the following month | Teamed | End of first calendar month |
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Issue the offer letter
Send a written offer the same day as verbal acceptance. Include role, salary, start date, probation period of up to 6 months, notice during probation of 7 days, and any condition such as Employment Pass approval for foreign hires.
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Complete the work-authorisation check
Verify the MyKad for Malaysian citizens and permanent residents, or confirm the Employment Pass for foreign nationals, before the employee starts. Retain a copy of the document and record the reference number.
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Issue the written employment contract
The written contract under the Employment Act 1955 must be given on or before day one. Teamed's standard Malaysian contract covers all required terms. Clients choose commercial elements; Teamed signs as the legal employer.
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Register with EPF, SOCSO, and EIS
Register the employee with all three funds: the Employees Provident Fund (KWSP), the Social Security Organisation (PERKESO), and the Employment Insurance System. Collect the MyKad number, bank details, and preferred EPF contribution rate. This runs across days one to seven.
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Issue the first payslip and remit PCB
Run the first payroll at the end of the first calendar month. Remit the Monthly Tax Deduction (PCB) to LHDN and all fund contributions by the 15th of the following month. The employee receives their payslip and is on the payroll record.
What must a Malaysian offer letter include?
The offer letter is not the binding contract. It is the document the candidate decides on.
Include role title, reporting line, start date, gross monthly salary, working hours, location, probation period, notice during probation, and any conditions such as work-authorisation or reference checks.
Three traps to avoid in Malaysian offer letters:
- Quoting net salary. PCB deductions depend on the employee's tax code, relief claims, and EPF elections. Commit to a gross figure only. A net-salary promise becomes very difficult to honour when deductions change.
- Vague probation terms. The Employment Act 1955 does not prescribe probation terms. If the offer letter sets a probation period but the written contract contradicts it, the contract governs. Align both documents before the employee starts.
- Omitting the Employment Pass condition for foreign hires. If the role requires a foreign national, the offer should be conditional on the Employment Pass being granted. Starting work before the pass is issued is an immigration offence for both the employer and the employee.
Teamed's standard Malaysian offer letter covers all required ground without overcommitting. Clients choose commercial elements. Teamed holds the legal-employer position and manages EPF and SOCSO registration from day one.
Malaysia work-authorisation checks
Every employer must check work authorisation before the employee starts.
Malaysian citizens and permanent residents present their MyKad (national identity card). Foreign nationals must hold a valid Employment Pass or other work-authorising permit before they begin work.
Malaysian citizens and permanent residents
The employer checks the MyKad (blue identity card for citizens, red for permanent residents) and retains a copy. No online portal or government system is required for this check. The MyKad number is also required for EPF, SOCSO, and EIS registration.
Foreign nationals
Third-country nationals must hold a valid Employment Pass (EP) issued by the Immigration Department of Malaysia before they start work. The employer verifies the pass category, the permitted occupation, and the expiry date. Common categories include:
- Employment Pass Category I: for senior roles with a monthly salary of RM10,000 or above. Valid for up to 5 years.
- Employment Pass Category II: for roles with a monthly salary between RM5,000 and RM9,999. Valid for up to 2 years.
- Employment Pass Category III: for roles with a monthly salary between RM3,000 and RM4,999 and a contract of up to 12 months.
- Residence Pass-Talent (RP-T): for highly skilled foreign professionals. Allows the holder to work for any employer without a separate EP.
The employer must not permit the employee to start work until the Employment Pass is physically in hand. A follow-up check is required before the pass expires.
Foreign nationals intending to work in Malaysia must obtain an Employment Pass before commencing employment. Employing a foreign national without a valid work permit is an offence under the Immigration Act 1959/63. Both the employer and the employee may be liable.
Ongoing checks for time-limited passes
For employees on Employment Passes with fixed expiry dates, Teamed tracks the renewal timeline and notifies the employee and the client ahead of the deadline. Letting a pass lapse without renewal is a compliance breach. Teamed manages the calendar so no renewal is missed.
The Malaysian written contract: what must it contain?
The Employment Act 1955 requires a written contract for all employees. It must be given on or before the start date.
The contract is the binding document. The offer letter is not. Missing contract terms default to the Employment Act minimums.
What a Malaysian employment contract must include under the Employment Act 1955:
- Names and addresses of employer and employee
- Start date and job title or description
- Place of work
- Gross monthly salary and pay intervals (monthly is standard)
- Agreed working hours: ordinary hours must not exceed 45 hours per week
- Annual leave entitlement, tiered by tenure (at least 8 days per year for staff with under two years of service)
- Sick leave entitlement and conditions for eligibility
- Notice periods: 4 weeks minimum for staff with under two years of service, rising to 6 weeks for two to five years and 8 weeks for over five years
- Probation period terms, if any (commonly up to 6 months)
- Public holiday entitlement (at least 11 gazetted federal holidays per year, plus state-specific holidays)
- Maternity and paternity leave entitlement
- Details of EPF, SOCSO, and EIS contributions
- Disciplinary and grievance procedures
The Employment Act 1955 was substantially amended in January 2023, extending coverage to all private-sector employees regardless of salary. Previously, many protections applied only to employees earning RM2,000 per month or below. The 2022 amendment means the contract minimums now apply universally. Teamed's standard Malaysian contract is updated to the post-2023 requirements.
Key source: Employment Act 1955 (Act 265) via the Ministry of Human Resources Malaysia.
Onboarding admin in the first week
Days 1 to 7: written contract signed, EPF and SOCSO and EIS registration completed, MyKad number and IBAN collected, PCB tax-code form submitted.
Teamed handles the payroll and compliance side. The client handles the operational and cultural side.
| Onboarding task | Who does it | Day |
|---|---|---|
| Written employment contract signed | Employee and Teamed | Day 0 or 1 |
| Work-authorisation check completed (MyKad or Employment Pass) | Teamed | Day 0 (before start) |
| MyKad number or passport number collected | Employee submits to Teamed | Day 1 |
| EPF registration (Employees Provident Fund / KWSP) | Teamed | Days 1 to 7 |
| SOCSO registration (Social Security Organisation / PERKESO) | Teamed | Days 1 to 7 |
| EIS registration (Employment Insurance System) | Teamed | Days 1 to 7 |
| PCB tax-code form (CP-22 new employee notification to LHDN) | Teamed | Days 1 to 14 |
| Bank account details (IBAN) collected for payroll | Teamed | Days 1 to 7 |
| Benefits enrolment (if applicable) | Teamed (admin) and Client (decision) | Days 1 to 7 |
| Equipment and system access | Client | Days 0 to 1 |
| Manager introduction and first-week plan | Client | Days 0 to 7 |
| 30-60-90 day plan documented | Client (manager) | Days 1 to 14 |
How does Teamed handle Malaysian employment for you?
Teamed becomes your legal employer of record in Malaysia for from $599 per employee per month, with zero FX mark-up in any currency.
EPF, SOCSO, and EIS registration, the written contract, and the full Malaysian employment law stack run on one platform.
Real HR and legal experts handle your Malaysian hires, from the first offer letter through every monthly PCB remittance to LHDN. An actual person, not a chatbot or a pooled queue. There is no setup fee and no exit fee. Employer cost passes through at cost, itemised on every invoice.
EOR payroll, contractor onboarding, and entity setup all live on one platform. A Malaysian contractor who converts to full employment keeps their record. Run the Crossover Calculator to see the month your Malaysian hire is ready to graduate to your own entity. Start from the Malaysia hiring overview; each guide takes one layer of Malaysian employment law.
Key sources: Employment Act 1955 (JTKSM), EPF employer obligations (KWSP), and SOCSO contribution rates (PERKESO).
Frequently asked questions
How long does it take to hire someone in Malaysia through Teamed?
Teamed can onboard a Malaysian citizen or permanent resident within a few business days. The critical path is the written contract, EPF and SOCSO and EIS registration, and the first payroll setup. Foreign nationals who need an Employment Pass will take longer, as the pass must be granted by the Immigration Department before the start date. Teamed manages the EP application process alongside the onboarding.
What notice period applies during a Malaysian probation period?
During probation the typical contractual notice for either side is 7 days. The Employment Act 1955 does not set a separate statutory probation notice; 7 days is the predominant contractual norm. After probation, the minimum employer notice rises to 4 weeks for staff with under two years of service, then 6 weeks for two to five years, and 8 weeks for over five years.
Does Malaysia have unfair dismissal protection for new employees?
Yes. Under the Industrial Relations Act 1967, every employee has the right to representation against unfair dismissal from the first day of work. There is no qualifying service period. This is one of the most employer-significant features of Malaysian employment law. The Industrial Court can award back pay of up to 104 weeks for confirmed employees.
What annual leave does a Malaysian employee get?
The minimum paid annual leave is 8 days per year for staff with under two years of service. This rises to 12 days per year for two to five years of service. Employees also receive at least 11 gazetted federal public holidays per year, plus additional state-specific holidays depending on the state of employment.
What are the EPF and SOCSO obligations for a Malaysian employer?
Employers must contribute to three funds for every eligible employee. EPF (pension): the employer contributes at the rate set by the Employees Provident Fund Act 1991, which varies by the employee's salary level. SOCSO: the employer contributes at 1.75% of the employee's monthly wages up to the wage ceiling. EIS: a separate employment insurance contribution also applies. All three must be registered before the first payroll run and remitted by the 15th of the following month.
The three-fund registration is what catches new Malaysia hires out. EPF, SOCSO, and EIS are separate portals with separate employee reference numbers. Miss one and the first payroll run fails. We set all three up in parallel with the contract, so day one is clean.
Malaysia gives employees dismissal protection from the first day of work. No qualifying period.
Three payroll funds go live on day one. All three must be registered before the first payslip.
Get the registration right and every payroll run after that is straightforward.
