Malaysia has one of the most successful economies in Asia. The country has recently transformed from being a producer of raw materials into an industrialized market economy. This current economy consists of two key sectors: manufacturing and international trade. More than half of the Malaysian labor force market is based in the services sector. However, the country’s focus on banking, business, biotechnology, and medicine is what makes it an ideal environment for starting your international career. The low cost of living is an added advantage. If you’re wondering how much you’ll make working in this country, check out the information below.
What is the average salary in Malaysia in 2020? The average gross wage in Malaysia in 2019 is about $22,803 a year, $1,900 monthly, and $10.86 hourly. Salaries differ significantly between cities and jobs, so keep reading if you’re interested in the average salary of a particular job. The highest salaries are found in the cities of Kuala Lumpur, Ipoh, and Petaling Jaya, at $2,060/month, $2,033/month, and $2,004/month respectively. Note that the currency used here is the Malaysian Ringgit (MYR), which equals 0.24 US dollars (USD) as of November 2019.
Malaysia is on track to have a flourishing economy and a stable labor market. But this doesn’t necessarily improve your chances of employment as a foreigner. This is because the government has put certain restrictions in place to protect the local labor force from foreign competition. Malaysian companies can hire foreign workers only if there’s no Malaysian equally qualified to fill the position. For this reason, it’s best to secure a job before relocating as opposed to trying your lack after arrival. But don’t let this deter you from relocating to Malaysia. I’ll cover everything there is to know about working in Malaysia to help you decide if relocating here is the right move for you.
Average Salary in Malaysia
In Malaysia, you do not have to be a doctor, engineer or lawyer to earn huge bucks. Professionals such as executive chef, professional gamers, as well as ESL teachers are paid highly. If you are an expat planning to start a business or seek employment in Malaysia, below are some of the monthly salaries you will find for certain professions:
- Attorney $2,863
- Teacher $1,519
- Architect $1,777
- Pharmacist $2,242
- General Manager $3,287
- Internal auditor $2,023
- Accountant $1,280
- Human Resources Manager $2,583
- Dentist $4,415
- Chef $1,480
- Graphic Designer $1,278
- Engineer $1,690
- Administrative Assistant $1,047
- Nurse $1,510
- Receptionist $1,075
- Waiter $1,004
- Cashier $1,100
- CEO $4,400
The Malaysian labor force market
The percentage wage gap between professions depends on the employer, location of the company, level of education, and employees’ hierarchical position. Those working in urban centers such as Putrajaya and Kuala Lumpur are paid relatively 50% higher than those working in rural areas. Research also shows that people with degrees earn about 64% more than those with a diploma, and 2.8 times as much as those with certificates. The mining and quarrying sector is the top paying at $1,382.16, followed by real estate, education, financial services, insurance, and information & communication in that order.
All salaried employees in Malaysia are required to pay income taxes on all types of income, including monthly salary, bonuses, commissions, and overtime. Every other person earning over $785.85 after deductions pays tax on all their sources of income –whether pensions, businesses, rent, royalties, premiums, dividends, annuities, or employment. On the other hand, you don’t have to pay tax on income earned outside Malaysia or if you’ve worked in the country for less than 60 days.
More than 30% of the government’s revenue is from the Petronas national oil company. The labor force is concentrated within the industrial sector, which consists of the electronics, automotive, and construction industries. Tourism is also a very productive sector of the Malaysian economy. The country is rich with diverse tourist attractions and the agricultural sector is also productive, especially in cash crops such as rubber and palm oil.
Employment law in Malaysia is founded on legislation such as the Employment Act 1955 (EA). Employees who are protected under EA are entitled to a fully paid sick leave, paid annual leave, protection against any illegal reduction of wages, overtime payment if they work outside normal working hours, 11 gazetted paid holidays and payment of the minimum wage. Fathers have no statutory rights to paternity leave, but new mums are entitled to 90-day maternity leave at full pay.
The information above is a glimpse of what Malaysians earn monthly on average. Keep in mind that wages change from time to time and there are other wage determinants, including market supply and demand, employees’ academic credits and set of skills, as well as working experience.
Malaysia Average Household Income
The latest survey for median monthly household income in Malaysia was done in 2016 and the value was $1,265.71.This was a 6.6% increase per annum compared to the value in 2014 which was $1,110.04. The median monthly household income in urban areas also rose by 6.4% from $1,248.28 to $1,418.71 in the same years. Simultaneously, the value in rural areas also increased by 5.3%; from $756.08 to $840.33. Seven states exceeded the country’s median monthly household income, including the Federal Territory (FT) Kuala Lumpur at $2,196.59, Selangor at $1,749.18, FT Putrajaya at $2,003.39, FT Labuan at $1,435.18, Melaka at $1,352.86, Penang at $1,309.53, and Johor at $1,368.36.
Minimum Wage in Malaysia
Minimum wage refers to the lowest salary that employers can legally pay employees. The Malaysian government set the standardized minimum wage at RM1,050/month or RM5.05 an hour ($254.21/month or $1.22 per hour) as of January 2019. This is a slight increase from the monthly minimum wage set in 2016 for Peninsula Malaysia at $242.10 and $222.73 for Sabar, Sarawak, and Labuan.
The minimum wage has to commensurate with productivity gains by being in tandem with the growth in productivity, economic activities in the states, and differences in the cost of living. Any increase in the minimum wage should be gradual and not drastic. In the manufacturing industry, workers receive allowances on top of their monthly salary. If the minimum wage is high, it affects bonus payments, increments, and overtime. It also results in the high cost of the labour force, resulting in extreme measures such as retrenchment. A drastic increase in minimum wage will also result in a high outflow of foreign exchange in the form of remittances.
Even with the existence of a nationwide minimum wage, some employees earn lower than that while others earn even 90 times as much. This results in a wide pay gap between the rich and the poor, with both being on the extreme ends. This salary is supposed to cover insurance, fuel, education, accommodation, income taxes, as well as house mortgage and car credit if you have one. After deductions, the salary becomes barely enough to cater for all these. Most workers in Malaysia live a basic life and are unable to save much unless they earn a lot.
Average Salary in Kuala Lumpur
The Federal Territory of Kuala Lumpur is Malaysia’s capital city. Its average salary for the year 2019 is $2,064. It is among the most rapidly growing metropolitan areas in Southern Asia, both in the economy and population. KL is a very industrialized urban center and remains the business and economic hub of Malaysia. Its average salary for 2019 is a 3% increase from $2,007.9 recorded in 2018.
Salaries in this city range from $278.21/month (minimum) to $9,022.34/month (maximum). The median salary is $2,018.11/month, meaning half the population is earning less than $2.018.11/month while the other half earns more than that.
Both the average salary and the median salary are indicators. If you earn an amount higher than both, then it means you can afford to live a decent life in Malaysia and enjoy what the country has to offer.
There are several reasons why Kuala Lumpur has become a popular destination for expatriation. This includes, but not limited to the concentration of educational centers that offer a wide range of courses, the presence of modern health centers with Western-trained doctors, and many job opportunities. There are also finance facilities such as banks that offer credit with low-interest rates. Being the most industrialized city in Malaysia, the cost of living in KL is bound to be high.
Cost of Living in Malaysia
The overall cost of living in Malaysia is relatively lower compared to other great expatriation destinations. If you are an expat, consider embracing the natives’ way of life. For instance, it is advisable to eat where locals eat since Western food at restaurants is very expensive. At places where the locals eat, noodles cost as little as $1, while steamed fish can only go up to $10. Instead of purchasing expensive imports from malls and groceries, it’s more cost-saving to buy fruits and vegetables from the locals.
Houses near and within the cities are somewhat expensive; as a result, it’s advisable to live away from the cities. A one-bedroom apartment within the city center costs $578.6/month, while outside the city it’s only $325 a month. Alternatively, you can buy a house for around $2,088/square meter in the city center. Malaysian mortgages are also available to expatriates looking to buy a property.
The cost of healthcare is also relatively low. For instance, a check-up by a family doctor costs $13.07, while an antibiotics prescription is $4.84. However, since free public healthcare is only for Malaysian citizens, healthcare costs can quickly add up to increase your expenses. Most expatriates are left with the option of private healthcare, which can be quite costly. That is where private health insurance comes in. A typical health cover will cost you between $100 and $500 a year, depending on what you want to be covered.
Malaysia is among the best cities in the world for international studies thanks to its high-quality education and low cost of living. The average cost for kindergarten school fees is around $208.45 per month and $6,585.16 for lower grade private schools. University tuition varies with the university and courses being offered.
Generally, the monthly cost of living in Malaysia (excluding rent) is $500/month for a single person and $2,500 for a family of four. Malaysia is the perfect place to move into, whether permanently or temporarily. While living at a low cost, do not miss out on the fun and adventure.