Employment Law in Malaysia: Contract, Leave, Notice (2026 Guide)

Employment Law in Malaysia: The Complete 2026 Guide

Signing a contract in Malaysia? Understanding the Employment Act 1955 is essential to know your rights: leave, notice, overtime. Here is what every expat needs to know.

Types of contracts

• Permanent contract: the most common for expats.
• Fixed-term contract: possible (often 1-2 years), renewable.
• Probation: usually 3 months (sometimes 6), with reduced notice.

Annual leave

After 1 year of service: 8 days minimum. It increases with seniority (12 days after 2 years, 16 days after 5 years). Many international companies offer more (18-25 days).

Sick leave and hospitalisation

• 14 days of paid sick leave per year (medical certificate required if > 2 days).
• 60 days if hospitalised (including the 14 days).
• Health insurance is usually provided by the employer (see our health guide).

Public holidays

11 legal public holidays per year, 5 compulsory. Malaysia has many celebrations (Eid, Chinese New Year, Deepavali...) that vary yearly.

Overtime

The legal working week is 48 hours. Beyond that, overtime is paid:

• 1.5× the hourly rate on weekdays
• 2× on Sundays/rest days
• 3× on public holidays

Notice and termination

• Less than 2 years: 4 weeks' notice
• 2 to 5 years: 8 weeks
• More than 5 years: 12 weeks
• Termination indemnity follows the same logic (10-20 days of salary per year of service).

Expat traps

• Your Employment Pass is tied to your employer: losing it means losing your right to stay. See our Employment Pass guide.
• Read the non-compete clause: it can be enforced in Malaysia.
• Pensions: the EPF (Employees Provident Fund) applies to Malaysians; expats can often be exempt — negotiate it.

👉 Settle smoothly with our Complete Expat Guide and estimate your cost of living.

FAQ

What is the legal working week in Malaysia?

48 hours per week, with overtime paid beyond that.

How many paid leave days in Malaysia?

8 days minimum after 1 year (often more in international companies), plus 11 public holidays and 14 sick days.

Is notice paid in Malaysia?

Yes, notice is paid. Its length depends on seniority (4 to 12 weeks).

Do expats contribute to EPF?

Generally no — expats can be exempted from the Malaysian pension fund EPF; negotiate it with the employer.

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