Employer of Record in Malaysia: 20 Providers Compared (2026)

Employing someone in Malaysia: key facts

Malaysian employment rules are federal, set mainly by the Employment Act 1955, with minimum wage and social-security rates uniform across the country for the cases below.

Minimum wage

Budget 2027 (2026-10-09) proposes RM 2,000 from June 2027, with employers whose annual sales are below RM 50 million reportedly exempt. It is not yet law (malaymail.com, checked 2026-10-27).

Employer contributions

For wages up to RM 20,000 the EPF amount comes from the Third Schedule wage-band table; above that it is the exact percentage. Whether the HRD levy applies to an EOR’s own business (HR and business support services) was not checked against the HRD Corp sector list.

Working hours and overtime

• Maximum 45 hours a week and 8 hours a day (up to 9 on some days if others are shorter), within a 10-hour spread, with at least 1 rest day a week. The weekly limit fell from 48 to 45 hours on 2023-01-01 (dnh.com.my, checked 2026-10-27).
• Overtime for staff earning RM 4,000/month or less (or in manual labour): 1.5x the hourly rate on a normal workday, 2x on a rest day beyond normal hours, 3x on a public holiday beyond normal hours. The ordinary rate is monthly salary divided by 26.
• Above RM 4,000/month, overtime pay is not statutory.

Annual leave and public holidays

• At least 11 paid public holidays a year: 5 fixed (National Day, the Yang di-Pertuan Agong’s birthday, the Ruler’s or Federal Territory Day, Labour Day, Malaysia Day) plus 6 the employer chooses from gazetted holidays. Holidays declared under the Holidays Act 1951 also apply (dnh.com.my, checked 2026-10-27).

Notice and severance

Notice periods are from Employment Act s.12 (ASEAN Briefing, checked 2026-10-27); the contract may set longer notice, the same for both parties. Termination benefits come from the Employment (Termination and Lay-Off Benefits) Regulations 1980, are pro-rated, and are not payable on misconduct dismissal or resignation (dnh.com.my, checked 2026-10-27).

• Dismissal needs just cause and excuse; notice or pay in lieu alone is not enough.
• Above RM 4,000/month there is no statutory termination benefit. Retrenchment is reported to the Department of Labour on form PK, before and after.

13th salary and bonuses

• A 13th salary is not mandatory (RemoFirst, checked 2026-10-27). Any bonus is a matter of contract.

Mandatory benefits

• No mandatory employer health insurance; the mandatory schemes are EPF, SOCSO and EIS (see the contributions table above).
• Paid sick leave: 14, 18 or 22 days a year (under 2, 2 to under 5, 5+ years), plus 60 days of hospitalisation.
• Maternity leave 98 consecutive days; paternity leave 7 days (12 months of service, up to 5 confinements) (dnh.com.my, checked 2026-10-27).
• From 2026-06-01 a non-employment-injury scheme (SKBBK / Lindung 24 Jam) is funded by employees at 0.75%, per secondary sources; the employer rate is unchanged (PwC, checked 2026-10-27).

Work permits

Source: Baker McKenzie, checked 2026-10-27.

• Foreign employees need an Employment Pass through the Expatriate Services Division (ESD), or MDEC for MDEC-registered companies. The sponsor must be a Malaysian-registered company.
• Employers must also obtain approval under Employment Act s.60K before hiring foreign workers (ASEAN Briefing, checked 2026-10-27).
• Whether an EOR can itself sponsor a pass for client-directed staff was not confirmed.

Currency and payroll

• Currency: Malaysian ringgit (MYR); 1 USD = 4.0875 MYR on Bank Negara Malaysia’s interbank rate for 2026-10-27 (bnm.gov.my, checked 2026-10-27).
• Wages are due no later than the 7th day after the wage period ends; overtime, rest-day and public-holiday pay by the end of the next wage period (Employment Act s.19). Employer EPF, SOCSO and EIS contributions are due by the 15th of the following month (KWSP, checked 2026-10-27).

Is Employer of Record legal in Malaysia?

Grey area. Malaysia has no statute or regulator that defines or licenses an employer of record, and no Malaysian law-firm analysis of EOR specifically was found. Vendors and advisory sites describe it as lawful where the EOR is a locally registered employer complying with the Employment Act, tax, EPF and SOCSO; the neighbouring regimes are where the model could be questioned.

• No EOR-specific rule. The EOR must itself be the registered employer under a contract of service, pay EPF, SOCSO and EIS and withhold monthly tax deductions. Malaysian employment law applies regardless of structure (ASEAN Briefing, checked 2026-10-27).
• Private Employment Agencies Act 1981. A licence is required before recruitment or placement activity; the 2018 amendments raised penalties to a fine up to RM 200,000, up to 3 years’ imprisonment, or both, and a licensed company’s director must be a Malaysian citizen. No source we found says whether EOR services fall within the Act (dnh.com.my, checked 2026-10-27).
• Employment Act s.33A (from 2023-09-01). A contractor for labour must register with the Director General of Labour, use written supply contracts and keep a register of supplied employees; non-compliance is an offence with a fine up to RM 50,000. Whether an EOR counts as a contractor for labour was not found (Baker McKenzie via Global Compliance News, checked 2026-10-27).
• Foreign hires. Employment Pass applications need a Malaysian-registered sponsor, and s.60K approval is required before hiring foreign workers.

For the client, two risks are on record. Treating an employee as a contractor can lead to substantial penalties and retroactive EPF, SOCSO and EIS contributions and tax deductions (ASEAN Briefing, checked 2026-10-27). And under Employment Act Part VII (s.33), principals and contractors can be liable for wages owed by a contractor for labour; the text of s.33 was not opened, so its scope is unconfirmed.

Who actually employs your hire in Malaysia

Most vendors describe the role of an EOR in general terms and few say which company is the employer in Malaysia. This table covers all 20 providers that operate here, based on what each one’s own pages say.

Fifteen of the 20 don’t say who employs your hire in Malaysia, and Papaya Global’s mention of a local partner reads like a generic line rather than a statement about its EOR service. It matters because Malaysia has no EOR licence to check: the only way to know who carries the employment contract is to ask. Before signing, ask: “Which Malaysian company will be my hire’s employer, who owns it, and which licences or registrations does it hold?”

How to choose an EOR in Malaysia

Need the clearest evidence of the employing company? Remote is the only vendor whose own document names a Malaysian company, Remote Malaysia Sdn. Bhd. Deel, Native Teams and Rivermate say they use their own entities but name none. Of the four, only Deel shows a Malaysia-page fee; Native Teams and Rivermate repeat global list prices.

Hiring a foreign national? The Employment Pass sponsor must be a Malaysian-registered company, and whether an EOR can sponsor one for your hire was not confirmed. Atlas HXM says anyone hired through its EOR must already hold work authorization or be sponsored by the client’s own entity, and Remote adds three days to onboarding for a right-to-work assessment of non-nationals. Rivermate says immigration can stretch onboarding to 8 weeks. Get the vendor’s answer on sponsorship in writing.

Weighing price against disclosure? On Malaysia pages Skuad is lowest at $249/month (discounted from $349), followed by Multiplier from $459 billed annually, Borderless AI at $579, and Deel and G-P at $599. Skuad’s page shows two different numbers, so confirm which applies. None of these names its Malaysian employing company; Deel says it owns one.

Need to start fast? Deel says a hire could start in as little as 2 days, Playroll quotes 1-5 days, Remote People and Rivermate 1-2 weeks, Safeguard Global as little as two weeks. These are vendor claims; with a foreign hire the timeline is longer.

What it costs to employ someone in Malaysia through an EOR

The employer is the EOR itself, a large payroll employer, so no small-employer relief applies, and the HRD levy is included on the assumption that it applies. Both salaries are for a Malaysian citizen under 60 in an office role, paid in 12 monthly payments.

Without the HRD levy the totals are RM 25,872.60 (12.68%) and RM 50,352.60 (12.34%). For a non-Malaysian employee EPF would be 2% instead of 12%. USD figures use 1 USD = 4.0875 MYR (Bank Negara Malaysia, 2026-10-27). Source: KWSP, checked 2026-10-27.

The EOR’s own fee is on top, in USD a month. Malaysia pages that publish a figure show $249 at Skuad (discounted from $349; $199 on a 12-month commitment), from $459 at Multiplier (billed annually), $579 at Borderless AI and $599 at Deel and G-P. Deel’s blog also shows a Malaysia EOR service fee of MYR 30,466 per employee per year. Other vendors repeat only a global list price on their Malaysia pages: from $99 (Native Teams), from $199 (RemoFirst), from $349 (RemotePass), $399 (Playroll), $599 (Justworks, Remote), $699 (Oyster) and €399-499 (Rivermate). Atlas HXM and Remote People cite market ranges of $300-600 and $350-500, not their own quotes; Papaya Global, Rippling, Safeguard Global, Pebl and Boundless publish no Malaysia price.

Hidden costs: published for a few vendors, and globally rather than for Malaysia. Remote says it has no platform, onboarding or setup fees, and collects a reserve “in rare, high risk circumstances” (Remote, checked 2026-10-10). Oyster requires a refundable deposit, amount not published (Oyster, checked 2026-10-10). Rivermate says it charges no onboarding, offboarding, setup or termination fees, with a refundable deposit (Rivermate, checked 2026-09-30). For every other vendor, where no figure is shown, treat it as unpublished, not zero.

When you don’t need an EOR

• A genuinely independent contractor. Closer to the real relationship if the person sets their own hours and tools and can serve other clients. See how to pay contractors in Malaysia and our hiring guide. Misclassifying an employee as a contractor can mean retroactive EPF, SOCSO and EIS contributions and penalties.
• Your own Malaysian entity. Atlas HXM puts opening one at USD 11,500 to USD 23,000 (MYR 50,000 to MYR 100,000), and Playroll at 1-2 months (Atlas HXM, Playroll, checked 2026-10-27). It is the route for a foreign hire if no EOR confirms it can sponsor the Employment Pass.
• Your headquarters entity as the employer. Boundless says on its Malaysia guide that this “generally isn’t legal in the long term” (Boundless, checked 2026-10-27). That is the vendor’s wording, not a statute we found.

For background on the model, see Employer of Record, co-employment and permanent establishment.

What changed in 2026

• 2025-10-01 - Mandatory EPF for non-Malaysian employees registered from 1998-08-01: 2% employer and 2% employee, on wages from October 2025. The Finance Ministry defended the 2% rate in Parliament in October 2026 (KWSP, checked 2026-10-27).
• 2026-01-01 - Year of assessment 2026: resident personal tax rates unchanged (0% to 30%, top rate above RM 2,000,000); EPF relief stays at RM 4,000 (PwC, checked 2026-10-27).
• 2026-01-11 - MOHA announced higher Employment Pass minimum salaries (ESD circular 2026-01-15), effective for new and renewal applications from 2026-06-01: Category I RM 20,000+, Category II RM 10,000-19,999, Category III RM 5,000-9,999 (Baker McKenzie, checked 2026-10-27).
• 2026-03-01 - The MyKad number becomes the single Tax Identification Number for individuals (RinggitPlus, checked 2026-10-27).
• 2026-03-31 - Gig Workers Act 2025 (Act 872) in full force: platform providers deduct SOCSO from gig workers’ income. It does not apply to ordinary employees or non-platform freelancers (same source).
• 2026-06-01 - SOCSO non-employment-injury scheme (SKBBK / Lindung 24 Jam) starts, employee-funded (0.75% in the first two years per secondary sources); the employer rate is unchanged (PwC, checked 2026-10-27).
• 2026-10-09 - Budget 2027 tabled: minimum wage to rise from RM 1,700 to RM 2,000 from June 2027, with employers whose sales are below RM 50 million reportedly exempt. Proposals, not yet legislated; no effect on the 2026 figures above (malaymail.com, checked 2026-10-27).

Vendor figures that don’t line up

Employer-cost estimates on vendor pages range from 13.60-14.60% (Deel) and 13.95-15.95% (Playroll) to 14.95-15.95% (RemoFirst), up to 15.95% (Oyster) and 18.95-22.45% (Papaya Global). Our statutory total is 13.68% and 13.34% at the two example salaries with the HRD levy included, and 12.68% and 12.34% without. The vendor pages we saw don’t itemise what their percentages include, so we can’t say which, if any, are out of date.

Two vendors show two figures themselves. Skuad’s Malaysia page has a $249/month price (discounted from $349) and a second banner with $199/month on a 12-month commitment. Deel’s page says a hire can start in “as little as 2 days” while its blog table shows a time to first hire of 0 business days.

How we built this page

Data was collected and checked on 2026-10-27 against Malaysian regulator pages (KWSP, PERKESO, MIDA, Bank Negara Malaysia), law-firm and advisory summaries where the statute text was not reachable, and each vendor’s own Malaysia page. The Malaysian company registry (SSM) could not be searched, so every entity statement rests on the vendor’s own words or documents, and we mark providers “not disclosed” rather than assume ownership. Providers are ordered with own-entity statements first, then a stated partner, then the rest, by published Malaysia price and completeness of data. Nobody pays for placement on this page.