Malaysia's Budget 2027 speech on 9 October 2026 proposed raising the minimum wage to RM2,000 a month from RM1,700, from June 2027. The speech said the Government has decided on the rise and that more than 4 million workers would benefit.
RM2,000Proposed minimum wageFrom RM1,700, starting June 2027
4 millionWorkers who would benefitMore than 4 million, the speech said
RM3,400GLIC and GLC living wage benchmarkUp from RM3,100, for 230 thousand workers
Source: Ministry of Finance, Budget 2027 speech, 9 October 2026, paragraph 32.
Main points
- MSMEs with annual sales below RM50 million will be exempted, the speech said.
- The speech said the Government will reform the workers' income framework, beginning with a RM2,500 minimum for semi-skilled workers and graduates.
- The speech welcomed a commitment by GLICs and GLCs to raise their living wage benchmark to RM3,400 from RM3,100.
What the minimum wage proposal means for employees and employers
The points below are split between employees and employers.
If you are an employee
- A minimum of RM2,000 is RM300 more a month than RM1,700. See the effect on pay after deductions in the take-home pay calculator.
- The speech says the new rate takes effect from June 2027.
- The speech says MSMEs with annual sales below RM50 million will be exempted.
If you are an employer
- In a separate paragraph on curbing undocumented foreign workers, the speech said companies other than MSMEs may claim tax deductions on salary expenses only if pay goes through a bank account or a cashless instrument permitted under the Employment Act 1955.
- The speech urged all private-sector employers to follow the example of GLICs, GLCs and employers in banking and oil and gas in paying fairer wages.
- Compare offers after EPF, SOCSO and tax with the offer comparison tool.
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The proposed minimum wage rises RM300 to RM2,000 in June 2027
What the Budget 2027 speech said about wages
Each point below follows the Budget 2027 speech.
- The speech said narrowing the gap between productivity and wages "must remain a priority". It put labour compensation at 33.9% of GDP and called that share relatively low.
- The speech said the Government has decided to raise the minimum wage from RM1,700 to RM2,000, effective June 2027, for more than 4 million workers.
- MSMEs with annual sales below RM50 million are exempted "to provide room for adjustment to business models".
- The speech said the minimum wage is a necessary floor but does not address the wider issue of wages that do not adequately reflect skills and qualifications.
- The MADANI Government will reform the workers' income framework, beginning with RM2,500 a month for semi-skilled workers and graduates.
- The speech welcomed the commitment by GLICs and GLCs to raise the living wage benchmark from RM3,100 to RM3,400 a month, and said the initiative is expected to benefit 230 thousand workers.
How RM2,000 compares with June 2026 formal wages
DOSM's wage release of 27 October 2026 covers Malaysian citizens in formal employment. In June 2026, 8.2% of them earned below RM1,700 a month, down from 10.4% a year earlier.
DOSM put the 20th percentile at RM1,800 and the 30th at RM2,045. RM2,000 therefore falls between those two points of the June 2026 pay distribution.
Gaps between the pay levels in the speech in ringgit and percent
Each gap is the higher amount minus the lower amount.
| Comparison | Lower amount | Higher amount | Gap a month | Gap as percent of lower amount |
|---|---|---|---|---|
| General minimum wage, now to June 2027 | RM1,700 | RM2,000 | RM300 | 17.6% |
| RM2,500 minimum against the RM2,000 general rate | RM2,000 | RM2,500 | RM500 | 25.0% |
| GLIC and GLC living wage benchmark | RM3,100 | RM3,400 | RM300 | 9.7% |
Foundific calculations from the amounts in the speech, as gross monthly pay before EPF, SOCSO and tax.
Over twelve months, a RM300 monthly rise is RM3,600 in gross pay.
What the wage measures do not yet say
These points are not stated in the speech.
- The date in June 2027 from which the RM2,000 rate applies.
- Which order or law sets the new rate; the speech does not mention one.
- How MSMEs are defined for the exemption beyond annual sales below RM50 million.
- The start date for the RM2,500 minimum, which the speech describes as the beginning of a reform, and which jobs it covers. The speech also says the Government has introduced a minimum wage for semi-skilled workers and graduates.
- Whether allowances count towards the RM2,500.
Where to follow the minimum wage next
These pages carry related figures.
- Estimate pay after deductions with the take-home pay calculator.
- See the graduate proposal in the Budget 2027 graduate starting salary post.
- Compare the new rate with pay across the labour market on wage growth in Malaysia.
- Read DOSM's latest pay figures in the employee wages Q2 2026 post.
Related guides
Sources
Ministry of Finance, Budget 2027 speech; DOSM, Employee Wages Statistics (Formal Sector) Q2 2026
- Ministry of Finance, Budget 2027 speech (English translation) 9 October 2026, paragraphs 32 and 33. The speech says the Bahasa Malaysia version prevails. Copy kept in data/my/mof/raw.
- DOSM, Employee Wages Statistics (Formal Sector), Second Quarter 2026 Released 27 October 2026. Used for the June 2026 wage percentiles and the share earning below RM1,700. Copies kept in data/my/dosm/raw.
