Malaysia Updates Employment Pass Rules for Expats
Effective June 2026, Malaysia will increase minimum salary requirements for Employment Pass holders, with Category I rising to RM20,000. The policy also introduces a 10-year maximum tenure for most roles and requires employers to implement local talent replacement plans.
Malaysia Updates Employment Pass Rules for Expats
Malaysia is tightening its requirements for foreign professionals as part of its Thirteenth Malaysia Plan. Starting June 1, 2026, the government will implement significant increases to minimum salary thresholds and introduce strict tenure limits for Employment Pass (EP) holders. These changes aim to prioritize the local workforce by ensuring only high-skilled expats are hired while requiring companies to train local replacements.
The new salary tiers represent a major jump from previous levels:
- Category I: Minimum monthly salary rises to RM20,000 (up from RM10,000).
- Category II: Minimum salary set between RM10,000 and RM19,999 (up from RM5,000).
- Category III: Minimum salary set between RM5,000 and RM9,999 (up from RM3,000).
Beyond the cost of hiring, the government is capping how long expats can stay. Category I and II holders are limited to 10 years, while Category III holders are capped at 5 years. Employers must now submit a structured "replacement plan" that outlines how they will transfer knowledge to Malaysian staff to eventually take over these roles.
Who is affected
These updates primarily impact corporate expats, managers, and technical specialists on employer-sponsored visas. Mid-level professionals may find it harder to qualify for renewals if their salaries do not meet the new minimums.
For the digital nomad community, there is good news. These changes do not apply to tourist visas or specialized digital nomad visas like the DE Rantau pass. If you are working remotely for a company outside of Malaysia, your status remains unchanged.
What to do next
If you are currently on an Employment Pass or planning to apply for one, check your contract against the new salary tiers. All applications and renewals submitted on or after June 1, 2026, must comply with the new rules. Employers should begin drafting replacement plans and identifying local talent to avoid disruptions in business continuity.
Stay informed on the latest nomad news to see how these shifting policies might impact your long-term residency options.
Read our full Malaysia guide for the complete picture.