The national minimum wage will rise from RM1,700 to RM2,000 a month from June 2027, Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim announced when he tabled Budget 2027 in the Dewan Rakyat on 9 October.
Anwar said the increase would benefit more than four million workers. Micro, small and medium enterprises (MSMEs) with annual revenue below RM50 million will be exempt from the increase, giving them time to adjust their business models.
“The gap between workers’ productivity and wages must be narrowed,” Anwar said, adding that the minimum wage only raises the floor of workers’ income.
Other wage measures
- A minimum monthly salary of RM2,500 is proposed as a starting point for semi-skilled workers and graduates under wage framework reforms.
- The living wage benchmark at government-linked investment companies and government-linked companies will rise from RM3,100 to RM3,400 a month, which the government said would benefit about 230,000 workers.
- Companies other than MSMEs will only be able to claim tax deductions for salaries paid through bank accounts using payment methods permitted under the Employment Act. KPMG’s Budget summary says this applies from year of assessment 2028.
The Employees Provident Fund said Budget 2027 will also see Malaysian citizens registered automatically as EPF members when they turn 18. EPF chief executive Ahmad Zulqarnain Onn called the RM2,000 minimum wage an important labour market reform.
What employers should do now
As with earlier increases, the new rate is expected to be given legal effect through a minimum wages order, which will set out the details. Employers close to the RM50 million revenue threshold should check where they stand, and all employers should review payroll budgets and salary payment methods well before June 2027.
Sources
Malay Mail: Budget 2027, minimum wage raised to RM2,000 effective June 2027 (9 Oct 2026)
Malay Mail (Bernama): EPF backs RM2,000 minimum wage, automatic membership from age 18 (10 Oct 2026)
KPMG Malaysia: Budget 2027 Snapshot