An Employer of Record (EOR) in Malaysia allows businesses to hire employees without setting up a local entity. The EOR takes care of payroll, employee benefits, tax filings, and compliance with Malaysian labor laws. This enables companies to expand their workforce in Malaysia efficiently while ensuring full compliance with both federal and state regulations.
Employer of Record (EOR) Malaysia
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Simple & Compliant Hiring with Globaine's Employer of Record (EOR)
Hire in the Malaysia with Confidence
Globaine takes care of all compliance matters, including payroll, taxes, and legal obligations, while providing seamless hiring processes. Our platform ensures that every aspect of employee management in Malaysia is handled efficiently and in full compliance with local regulations.
Fast Time-To-Hire
Onboard employees in as little as 12 hours.
Cost-Efficient
The most affordable solution on the market, saving you time and money.
Compliant Contracts
Contracts compliant with Malaysia’s labor laws.
Global Reach, Local Expertise
Hire not just in Malaysia, but in over 180 countries through our global platform, allowing you to grow internationally without entity setup. Globaine’s team provides the local expertise you need to ensure every hire is compliant, efficient, and hassle-free.
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in Malaysia
An Employer of Record (EOR) is a third-party organization that manages all legal and administrative responsibilities of employing staff on behalf of another company. This includes payroll, tax compliance, employment contracts, benefits administration, and adherence to local labor laws. An EOR allows businesses to hire employees in new countries without establishing a local entity, enabling faster and compliant global expansion.
Choosing an Employer of Record (EOR) in Malaysia simplifies compliance with Malaysia’s labor regulations, reduces administrative burdens, and accelerates business growth without the need for a local entity. EOR services in Malaysia take care of payroll, benefits, tax filings, and employment contracts, ensuring full legal compliance. This allows businesses to focus on scaling while managing employees effectively across Malaysia.
Employment contracts in Malaysia must be in writing and compliant with the Employment Act. Contracts should specify the terms of employment, including working hours, wages, benefits, and termination procedures.
Written contracts should be provided before employment begins. The contract must be signed by both the employer and employee to be considered valid.
Salaries should be stated clearly in Malaysian Ringgit (MYR), detailing the payment schedule (monthly or hourly). Benefits, allowances, bonuses, and overtime rates must also be specified.
Common clauses include non-compete agreements, confidentiality obligations, termination notice periods, and dispute resolution methods. These clauses must comply with Malaysian law and should not infringe on employee rights.
in Malaysia
1. What are the key steps in employee onboarding in Malaysia?
Medical checks are required in certain sectors like construction and healthcare before employment begins.
2. When should employees complete pre-hire medical checks in Malaysia?
Pre-hire medical checks are typically required for specific sectors like healthcare, education, and industries involving heavy machinery, where safety and health are prioritized.
3. What documents are required for onboarding in Malaysia?
Employees must submit identification documents (e.g., national ID or passport), proof of residence, bank account details for salary disbursement, and EPF and SOCSO registration numbers.
4. Why businesses in Malaysia need EOR services?
5. How does EOR in Malaysia different from other countries?
in Malaysia
Payroll in Malaysia is typically processed on a monthly basis. Employers must ensure compliance with mandatory contributions to EPF, SOCSO, and EIS, along with withholding personal income tax (PCB).
Salaries typically include base pay and may also incorporate allowances for transportation, meals, and housing. Overtime pay is regulated by the Employment Act for eligible employees.
Bonuses are usually paid at the end of the year but are not mandatory unless specified in the employment contract. Commissions are often tied to sales performance or set metrics.
As of 2024, the minimum wage in Malaysia is MYR 1,500 per month. However, this can vary slightly between urban and rural areas, based on local government guidelines.
in Malaysia
1. What are the income tax rates in Malaysia?
Malaysia uses a progressive income tax system, with tax rates ranging from 0% to 30%, depending on the employee’s income bracket.
2. How does the tax system apply to non-residents in Malaysia?
Non-residents are subject to a flat tax rate of 30% on income earned in Malaysia. They may also be subject to withholding taxes, depending on the type of income.
3. When are tax returns due in Malaysia?
Tax returns for individuals are typically due by April 30 of the following tax year. Employers are required to withhold monthly tax deductions (PCB) from employee salaries.
4. What social security contributions are required in Malaysia?
Employers must contribute to the EPF (between 12% and 13% of the employee’s salary), SOCSO, and EIS. Employees also contribute to EPF and SOCSO.
in Malaysia
Employees are entitled to between 8 and 16 days of paid annual leave, depending on their length of service.
Employees can typically begin using their annual leave after completing one year of service. Some employers may allow earlier use, subject to approval.
Female employees are entitled to 98 days of paid maternity leave. Male employees are granted up to 7 days of paternity leave, though this is not mandatory by law.
Employees are entitled to paid leave on 11 public holidays annually, including major celebrations like Hari Raya, Deepavali, and National Day.
in Malaysia
1. What are the mandatory benefits employers must provide in Malaysia?
Mandatory benefits include contributions to the Employees Provident Fund (EPF), Social Security Organization (SOCSO), and Employment Insurance System (EIS).
2. What is the structure of healthcare benefits in Malaysia?
While Malaysia has a public healthcare system, employers often provide private health insurance to employees as a supplementary benefit. This can cover outpatient and inpatient care, as well as specialist consultations.
3. Are retirement savings plans mandatory in Malaysia?
Yes, employers must contribute to the Employees Provident Fund (EPF), which acts as the primary retirement savings plan for employees in Malaysia.
4. What other common benefits do employers provide in Malaysia?
Employers often provide additional perks, including transport allowances, meal subsidies, and group insurance for life or accident coverage, to enhance employee satisfaction.
TERMINATIONS
in Malaysia
The notice period depends on the employee’s length of service but typically ranges from 4 weeks to 8 weeks.
Employees can be terminated without notice for serious misconduct or breach of contract. However, this must be properly documented and supported by evidence.
Severance payments, also known as termination or layoff benefits, are generally calculated based on the employee’s length of service, ranging from 10 to 20 days’ wages per year of service.
Yes, mutual termination is possible, where both the employer and employee agree to end the employment relationship under negotiated terms, often involving severance packages.
FAQs
2. What specific cost savings can our company expect by using Globaine's EOR solution compared to setting up a local entity in Malaysia?
Using Globaine’s EOR eliminates the need for establishing a local entity, saving on registration fees, compliance costs, and ongoing administrative management. These savings typically range from 50-70%, allowing businesses to allocate resources more efficiently while staying compliant.
3. How does Globaine guarantee fast onboarding within 12 hours, and what processes are in place to maintain this speed?
Globaine uses efficient, pre-structured processes and local expertise to ensure onboarding can be completed within 12 hours. We prepare all necessary employment contracts, verify documents, and manage legal requirements in advance to streamline the process for new hires.
4. Can Globaine handle complex employment scenarios in Malaysia, such as drafting bilingual contracts and managing terminations?
Yes, Globaine has experience handling complex employment scenarios, including drafting contracts in both English and Bahasa Malaysia, as well as navigating terminations in compliance with Malaysian labor laws, ensuring that all processes are legally sound and straightforward for employers.
6. How Does Employer of Record Work in Malaysia?
An Employer of Record (EOR) in Malaysia manages all employment-related tasks such as payroll, benefits, tax filings, and compliance with Malaysian labor laws. The EOR acts as the legal employer, enabling companies to hire employees in Malaysia without a local entity, simplifying HR processes and facilitating rapid market entry.
