BlackRevo blog · HR trends
Minimum wage Malaysia 2027: RM2,000 from June, the RM2,500 graduate floor, and what each costs
Yap Pat Yih, Co-founder and General Manager · 2026-10-10 · 8 min read
Budget 2027 raises the minimum wage to RM2,000 from June 2027 and announces RM2,500 for graduates. What is law today, what is only announced, take-home pay, and the employer's cost.
Malaysia's minimum wage is RM1,700 a month today. Budget 2027, tabled on 9 October 2026, says it will rise to RM2,000 from June 2027, with micro, small and medium businesses whose annual sales are under RM50 million exempted, and that a RM2,500 monthly minimum for graduates and semi-skilled jobs will be introduced, with no start date yet. Neither new figure is law until it is gazetted. This is what the speech said, what is in force now, what it means for a first job offer, and what it costs an employer, worked out from the official contribution tables.
TL;DR
- Today: RM1,700 a month for every employer, under the Minimum Wages Order 2024.
- From June 2027: RM2,000 a month, announced in the Budget. The day in June is not given, and it becomes binding when a new order is gazetted.
- Exempted from RM2,000: micro, small and medium businesses with annual sales under RM50 million. The speech gives no end date. They still owe RM1,700.
- RM2,500 a month for graduates and semi-skilled jobs: announced "as a start" of a new income framework. No start date, legal instrument or coverage rule has been published.
- At RM2,000 a local employee takes home about RM1,766 and costs the employer about RM2,298. At RM2,500: about RM2,208 and RM2,873.
What the Budget 2027 speech actually says
The wage measures are in paragraph 32 of the Budget 2027 speech, under the heading "Upah Bermaruah untuk Rakyat" (dignified wages for the people). The Ministry of Finance publishes the full text in Bahasa Malaysia; the English below follows the speech's English text.
The minimum wage. "The Government has agreed to raise the minimum wage from 1,700 ringgit to 2,000 ringgit." The new rate takes effect from June 2027. Micro, small and medium enterprises with annual sales below RM50 million are exempted "to provide room for adjustment to business models". The Malay text says more than four million workers will be covered by the new rate.
The graduate figure. The speech says the minimum wage only lifts the floor, while skilled workers are still not paid in line with their qualifications, so the government will reform the workers' income framework "beginning with a minimum wage of 2,500 ringgit a month for semi-skilled workers and graduates". That is the whole of it: no date, no order, and nothing on whether the MSME exemption applies to it.
Around it. The same paragraph welcomes the commitment by government-linked investment companies and government-linked companies to raise their living wage benchmark from RM3,100 to RM3,400 a month, for about 230,000 workers, and calls on all private employers to follow. Paragraph 33 adds a payroll rule: companies other than MSMEs may claim a tax deduction for wages only if the wages are paid through a bank account.
What is law today
The floor in force is the Minimum Wages Order 2024 (P.U.(A) 376/2024): RM1,700 a month, from 1 February 2025 for employers with five or more workers or in professional activities, and from 1 August 2025 for every employer. The Ministry of Human Resources' statement puts it plainly: the RM1,700 is measured on basic salary, so allowances do not count towards it.
A Budget speech announces policy; it does not change the order. A new rate takes effect when a new minimum wages order is made and gazetted under the National Wages Consultative Council Act 2011. Until then, RM1,700 is the legal minimum, and the RM2,000 and RM2,500 figures are announced, not yet gazetted. We will update this page when the order is published.
What it means for a fresh graduate's first offer
The RM2,500 is not law yet, so an offer below it today breaks no rule. It is still a useful marker. In the Ministry of Higher Education's tracer study of 2025 graduates, the most common starting band for degree holders was RM2,001 to RM3,000, and for diploma holders RM1,001 to RM2,000. For most diploma holders, RM2,500 would sit above where first offers start today; for degree holders it falls inside the most common band. Pay in Kuala Lumpur and Selangor runs above the national median. Our fresh graduate salary guide has the full bands and the sources.
What RM2,500 means in your account, for a local employee under 60, single, with no other income:
- Gross basic salary: RM2,500.00
- EPF, your 11%: RM275.00 (KWSP Third Schedule)
- SOCSO, your share: RM12.25 (PERKESO Act 4 table)
- EIS, your share: RM4.90 (PERKESO Act 800 table)
- PCB: RM0.00 at this level, after the personal relief, EPF relief and the RM400 rebate
- Take-home: RM2,207.85, or RM2,189.50 if LINDUNG 24 Jam (RM18.35) is deducted
At RM2,000 the same arithmetic gives RM1,766.35 (EPF RM220.00, SOCSO RM9.75, EIS RM3.90), or RM1,751.70 with LINDUNG 24 Jam.
Two more Budget lines matter if you have a study loan. For 2027, PTPTN borrowers earning up to RM2,500 a month may defer repayment, and those earning RM2,500 to RM3,000 pay a minimum of RM50 a month. Employers that repay PTPTN loans on behalf of employees get a tax deduction for repayments made from 1 January 2027 to 31 December 2028, which is worth asking about at the offer stage.
When you read an offer, ask what is basic and what is allowance. The current minimum is measured on basic salary, and increments and bonuses are usually calculated on basic too.
What it costs a small employer
For an employer, the wage is only part of the cost. EPF, SOCSO and EIS sit on top, each from its official table:
- RM1,700 to RM2,000: RM1,953.15 to RM2,298.05 a month, so RM344.90 more per worker, or RM4,138.80 a year.
- RM2,000 to RM2,500: RM574.70 more a month, or RM6,896.40 a year, where the graduate floor would apply.
Those figures are before overtime and anything else your contracts calculate from the wage, which rise with it. Our overtime calculation guide shows how the hourly rate follows the monthly wage.
If your annual sales are under RM50 million, the speech exempts you from the RM2,000 rate, and RM1,700 still applies. The order, when it is gazetted, should say how sales are measured and for how long. Until then, three things are worth doing:
- List everyone on a basic salary under RM2,000, and everyone just above it. Raising the floor squeezes the gap to the people one step up, and they will notice.
- Budget from June 2027 on the arithmetic above, whether or not you expect to be exempt, so the decision is yours and not a surprise.
- Pay wages through a bank account. The speech ties the tax deduction for wages to it for companies other than MSMEs, and it is the cleanest record either way.
What we do at BlackRevo
We hire fresh graduates and SPM leavers into real roles. Pay here is decided with you, on what you can do and deliver; our fresh graduate salary guide explains how. The open roles are on our careers page.
Sources: Budget 2027 speech, paragraphs 32, 33 and 102 (Ministry of Finance, 9 October 2026); Minimum Wages Order 2024 (P.U.(A) 376/2024) and the Ministry of Human Resources' statement on it; KWSP's Third Schedule; PERKESO's contribution tables for Act 4 and Act 800; LHDN's tax rates, reliefs and rebates.
Last checked: 9 October 2026, the day the Budget was tabled. The RM2,000 and RM2,500 figures are announced, not yet gazetted.
FAQ
What is the minimum wage in Malaysia in 2027?
RM1,700 a month until a new order is gazetted. Budget 2027 announced RM2,000 a month from June 2027, with micro, small and medium businesses whose annual sales are under RM50 million exempted.
When does the RM2,000 minimum wage start?
The Budget 2027 speech says June 2027 and does not give the day. It becomes binding when the new minimum wages order is gazetted; until then RM1,700 is the legal minimum.
Is the RM2,500 graduate salary law?
Not yet. The speech says the government will introduce a RM2,500 monthly minimum wage for graduates and semi-skilled jobs as the start of a new income framework, but no start date, order or coverage rule has been published.
Who is exempted from the RM2,000 minimum wage?
Micro, small and medium enterprises with annual sales under RM50 million, according to the speech, which gives no end date for the exemption. They must still pay at least RM1,700.
How much is take-home pay on RM2,000 and RM2,500?
For a local employee under 60 with no other income: RM1,766.35 on RM2,000 and RM2,207.85 on RM2,500, after EPF, SOCSO and EIS, with no PCB. If LINDUNG 24 Jam is deducted, RM1,751.70 and RM2,189.50.
How much more does RM2,000 cost an employer per worker?
RM344.90 a month, or RM4,138.80 a year, for a local employee under 60, counting the employer's EPF, SOCSO and EIS on top of the RM300 rise: RM1,953.15 a month at RM1,700 against RM2,298.05 at RM2,000.
Yap Pat Yih: Yap Pat Yih is Co-founder and General Manager of BlackRevo and looks after the team, the hiring and the HR system they run on.