KUALA LUMPUR – Malaysia’s minimum wage will increase from RM1,700 to RM2,000 a month from June 2027, Prime Minister Datuk Seri Anwar Ibrahim announced when tabling Budget 2027 today.
Micro, small and medium enterprises (MSMEs) with annual sales revenue below RM50 million will be exempted initially to give them time to adjust their business models to the higher wage requirement.
Anwar said the increase would benefit more than four million workers.
However, he noted that although the minimum wage provides a baseline for workers’ earnings, pay for skilled workers remains disproportionate to their qualifications.
To address the gap, the government will introduce a minimum monthly wage of RM2,500 for semi-skilled workers and graduates as an initial measure.
The government also 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, a move expected to benefit 230,000 workers.
Anwar said the government had raised the minimum wage, introduced the new wage benchmark for semi-skilled workers and graduates, and increased public servants’ salaries, while GLICs and GLCs had also taken steps to improve workers’ earnings.
He added that several major employers in the banking and oil and gas sectors had established more reasonable wage levels.
“I therefore urge all private-sector employers to follow the same example,” he said.
Separately, the government will tighten tax deduction rules for salary expenses to discourage companies from employing undocumented foreign workers.
Companies other than MSMEs will only be allowed to claim tax deductions for salary expenses if the payments are made through bank accounts in accordance with channels permitted under the Employment Act 1955.
The new condition will apply to salary expenses, while tax deductions for other types of expenditure will remain unaffected. – October 9, 2026