Prime Minister Anwar Ibrahim raised the minimum wage from RM1,700 to RM2,000 effective June 2027, exempting MSMEs with annual revenue under RM50 million to give them time to adjust, and introduced a new RM2,500 minimum monthly salary benchmark for semi-skilled workers and graduates. This matters directly for payroll planning: over four million workers are covered by the new floor, government-linked companies raised their own living wage benchmark from RM3,100 to RM3,400, and non-MSME employers can now only claim tax deductions on wage expenses if salaries are paid through bank accounts under Employment Act-compliant methods. Employers across all sectors, particularly non-MSMEs managing payroll compliance and larger companies already exceeding the floor, may be affected, with the new wage and tax-deduction rules taking effect alongside the broader Budget 2027 wage reform framework.

 

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