By MALAYA CORPORATE
Malaysia Employment Pass 2026: New RM20,000 Salary Rule & What It Means for Your Business
If you are hiring expatriates or planning to move your business to Malaysia, there is a major update you need to know about. The Ministry of Home Affairs (MOHA) has announced a New Expatriate Employment Policy that will take full effect on 1 June 2026.
The most talked-about change?
The minimum salary threshold for certain Employment Pass (EP) categories is expected to rise to RM20,000.
Why is the Government doing this?
This shift is part of the Thirteenth Malaysia Plan (RMK-13) and the Malaysia MADANI vision. The goal is simple: to ensure that hiring foreigners truly adds value to our local economy and helps Malaysians pick up high-level skills.
Key Changes You Need to Know
1. Higher Salary Thresholds While the full guidelines are still being finalized, the baseline for high-level expatriate roles is moving toward the RM20,000 mark. This ensures that only “top-tier” talent is brought in for specialized roles.
2. The “Replacement Plan” is Mandatory This is a big one. Companies can no longer just hire an expat indefinitely. You must now have a structured plan to show how a local Malaysian employee will eventually be trained to take over that role. This includes:
Identifying specific local “successors.”
Structured mentoring and knowledge transfer.
A clear timeframe for the transition.
3. Focus on “High-Quality” Investment Malaysia isn’t becoming “anti-foreigner.” Instead, the government is becoming more selective. They want high-quality investments that create better wages and more skilled career opportunities for locals.
FAQ: Common Questions about the 2026 EP Policy
Most frequent questions and answers
Q: Does this apply to expats already in Malaysia?
A: The policy is “forward-looking,” meaning it mainly affects new applications from 1 June 2026. Existing expats will likely follow “transitional regulations” which will be announced soon.
Q: What happens if my company fails to implement a Replacement Plan?
A: If you don’t show effort in training local talent, your future expat pass applications or renewals could be affected or rejected.
Q: Is the government trying to stop foreign hiring?
A: No. The policy is meant to complement local talent, not replace it. If your business has a strategic need that locals cannot fill yet, exemptions may still be considered on a case-by-case basis.
Q: Which agency is in charge?
A: The Ministry of Home Affairs (MOHA) is the lead agency, working alongside others like SSM and TalentCorp.
2026 might seem far away, but for workforce planning, it is just around the corner.
Review your payroll: Check if your current expatriate salary packages will meet the new 2026 standards.
Start your Replacement Plan now: Begin documenting your internal training and “knowledge transfer” sessions.
Consult a Professional: Navigating immigration and SSM compliance is getting stricter. Ensure your “Company Secretary” or consultant is up to date with these MOHA changes.
Need help with your Expatriate Pass or Company Compliance? > As licensed experts endorsed by the government, we help businesses stay compliant while navigating the latest policy shifts. Reach out to us today to future-proof your business operations.
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