Last updated: February 2026
Employment Act 1955: Payroll Compliance Guide (2025)
Essential Payroll Rules Every Malaysian Employer Must Follow
Adheres to Employment Act 1955
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Learn More About Employment Act Payroll Rules
The Employment Act 1955 governs payroll practices for employees entered into a contract of service. Key rules include: Salary must be paid by the 7th of the following month. Overtime rates are fixed at 1.5x (normal), 2.0x (rest day), and 3.0x (public holiday). Payslips are mandatory. Lawful deductions are strictly regulated.
A comprehensive overview of payroll requirements under the Employment Act 1955. Learn about wage periods, overtime calculations, lawful deductions, and maternity/paternity pay.
Frequently Asked Questions
When must salary be paid?
Wages must be paid within 7 days after the last day of any wage period (usually the month end).
What are the overtime rates?
Normal days: 1.5x hourly rate. Rest days: 2.0x hourly rate (or daily rate depending on hours). Public Holidays: 3.0x hourly rate.
Are payslips mandatory?
Yes, employers must furnish every employee with a written statement of wages (payslip) on or before the payment date.
What deductions are allowed without permission?
EPF, SOCSO, EIS, PCB, and deductions for overpayment of wages (previous 3 months) or indemnity due to resignation without notice.