Malaysia EP Salary Floors 2026: New Thresholds Explained

Dear employers: got an Employment Pass renewal on the calendar before year end? Read this first before you kena caught out.

Since 1 June 2026, Malaysia’s been running on new minimum salary rules for Employment Passes. Got expat staff on EP Category II or III, or planning to bring someone in under those tiers? This affects you, no escaping it.

We’re already three months into this rule being live. A good chunk of renewals coming through this year are getting assessed under it right now. If your HR team hasn’t caught up yet, consider this your gentle reminder (with a smile).

What Changed

Headline number first, and it’s a big one: someone at MOHA decided a gentle 10% bump wasn’t enough, so they doubled the salary floors instead.

MOHA confirmed the new thresholds on 14 January 2026, after Cabinet approved it back in October 2025. Applies to every new and renewal EP application from 1 June 2026 onwards. Not just new hires, everyone.

Here’s the breakdown:

Category I : RM10,000 to RM20,000 a month. Exact double, no rounding. Valid up to 10 years now.

Category II : RM5,000-RM9,999 range moves to RM10,000-RM19,999. Also roughly double, also up to 10 years, but now you need a Local Succession Plan showing how you’ll eventually hand the role to a Malaysian.

Category III : RM3,000-RM4,999 becomes RM5,000-RM9,999. Same succession plan requirement, max five years.

That succession plan thing is new for a lot of employers. And no, “we’ll figure it out eventually” doesn’t count as a plan lah. Need actual job descriptions, training timelines, hiring pipeline, all written down.

One silver lining though: Category III pass holders can now bring dependants to Malaysia for the first time. Previously only Categories I and II got that.

Why This Is Happening Now

Not random. Ties into the Thirteenth Malaysia Plan’s push to cut reliance on foreign labour and grow local talent, something Malaysia’s been signalling since 2022. Old salary framework was from 2016, so honestly, overdue for an update.

MOHA also added a new step: every EP application now needs JTKSM Section 60K approval before ESD even looks at it. One more gate to clear, not just a bigger number to hit.

One exception worth knowing: MDEC confirmed in late May that Category III applications in Global Business Services needing native or near-native language skills can stick to the old thresholds until 1 June 2027. Running a GBS setup with language-specialist hires? You get an extra year, lucky you.

Quick Recap: The New EP Salary Floors, By the Numbers

Category I minimum? RM20,000, up from RM10,000. Up to 10 years.

Category II range? RM10,000-RM19,999, up from RM5,000-RM9,999. Up to 10 years, needs a Local Succession Plan.

Category III range? RM5,000-RM9,999, up from RM3,000-RM4,999. Up to five years, also needs a succession plan.

Applies to existing pass holders or just new hires? Both. Any renewal from 1 June 2026 onwards gets the new treatment, even if the old salary was fine before.

Any exceptions? One. MDEC-registered companies hiring Category III staff for native-language GBS roles get until 1 June 2027 on the old thresholds.

Anything new in the process? Yes, JTKSM Section 60K approval, required before ESD will even process the application.

What Employers Need to Do Now

Quick example: your Category II regional sales director earns RM8,500 a month. Was fine under the old RM5,000 floor. Under the new rules? Short by RM1,500, just like that. Renewal coming up next quarter? Fix the gap now, not the week the application’s due.

Go through everyone on Category II or III and check their renewal dates. We’re past 1 June already, so any renewal from here gets the new rules automatically. No more “later this year” excuse.

Budget for it before finance budgets for you. Multiply a shortfall like above across three or four expat hires, and you’re looking at tens of thousands of ringgit extra a year, before EPF, levies, and succession plan costs even come in. Don’t let your CFO find out in Q4.

Start the succession plan paperwork early. Not the week before renewal, no matter how good you are at last-minute saves. Category II and III need a real localisation pathway on file, and doing it properly takes longer than most people think.

Update contracts and offer letters now, especially for roles still in the pipeline. Terms that worked under old rules need updating before the application stage. Otherwise you’re not hiring an expat, you’re writing yourself a rejection letter.

Where Talenox Fits In

Salary floors sound simple on paper, but get messy fast once you’re juggling EPF, EP levies, and renewal dates across a bunch of expat staff. Talenox’s automated payroll system for Malaysia already handles EPF, SOCSO, EIS, and PCB for local and foreign employees, so when a contract changes to hit the new EP threshold, payroll keeps up, no manual double-checking needed. Won’t write your succession plan for you, and definitely won’t sit through the JTKSM appointment on your behalf. But it does mean the numbers behind every expat contract stay accurate and audit-ready, while you handle the part that actually needs a human.