Introduction
When managing payroll, getting the basics right matters. This includes salary payout timing, payslip issuance, and leave management — all of which are governed by Malaysia’s Employment Act. Whether you’re a startup or an established company, these rules keep your operations compliant and employees happy.
Salary Payment Rules in Malaysia
Employers are required by law to pay salaries no later than the 7th day after the end of the pay period.
Key Points:
- Most companies follow a monthly schedule (e.g., cutoff on 31st, paid by 7th).
- If an employee resigns or is terminated, final salary must be paid on the last working day.
Payslips: Why They Matter
For Employer
- Ensures legal compliance with employee rights.
- Records salary as official company expense.
For Employee
- Helps employees understand how their salary is calculated.
- Acts as proof in case of disputes or company misconduct.
- Used by banks and lenders to verify income and credibility.
Leave Entitlements in Malaysia
📆 Annual Leave
0–2 Years
- Full-Time: 8 days
- Part-Time: 6 days
2–5 Years
- Full-Time: 12 days
- Part-Time: 8 days
5+ Years
- Full-Time: 16 days
- Part-Time: 11 days
🤒 Sick Leave
0–2 Years
- Full-Time: 14 days
- Part-Time: 10 days
2–5 Years
- Full-Time: 18 days
- Part-Time: 13 days
5+ Years
- Full-Time: 22 days
- Part-Time: 15 days
🗂️ Other Leave
👶 Maternity Leave
- 98 days (full-time only)
👨👧 Paternity Leave
- 7 days (full-time only)
🏥 Hospitalisation Leave
- 60 days (full-time only)
🎉 Public Holidays
- Full-Time: 11 days (must includes 5 specific national holidays)
- Part-Time: 7 days (must include 4 specific holidays)
Employee's Working Hours
Based on Employment Act 1955.
Full-Time (Permanent)
- Consecutive Hours: At least 30 mins break after 5 hours of continuous work.
- Daily Working Hours: 7.5 or 8 hours/day.
- Maximum Work Hours: 10 hours/day.
- Weekly Work Hours: 45 hours/week.
- Rest Day: 1 day/week minimum.
- Overtime: 104 hours/month.
Part-Time
- Work hours = 30%–70% of full-time hours
- Less than 30%: Classified as casual worker.
- Eligible for OT if they exceed part-time contracted hours.
- If working for 5 days or more and not less than 20 hours/week → entitled to 1 rest day/week
Need to track OT easily?
AutoCount Cloud Payroll auto-calculates OT rates based on salary and hours worked.
Why AutoCount Cloud Payroll Makes It Easy
- Compliant payslip generation with 10+ customizable templates
- Auto-calculated leave balances with real time tracking
- Real-time approval flows for leave, claims & OT
- Full audit logs for payroll, attendance & transactions
- All-in-one system for payslips, leave, claims & statutory reporting
- Secure digital storage with 7-year statutory compliance (PERKESO & LHDN)
