Malaysia Updates Employment Pass Salary and Tenure Rules
Starting June 2026, Malaysia will raise the Category I salary threshold to RM20,000 and limit employment durations to 5-10 years. These changes aim to reduce the foreign workforce to 5% by 2035, potentially impacting long-term residency prospects for skilled professionals.
Malaysia Updates Employment Pass Salary and Tenure Rules
Malaysia is implementing significant changes to its expatriate employment policy, effectively doubling the minimum salary requirements for foreign professionals. While the Cabinet approved these measures in late 2025, the new regulations officially take effect on June 1, 2026. This represents the most substantial shift in the country's nomad news and immigration landscape in a decade.
The policy introduces a tiered system with strict salary floors and maximum stay limits:
- Category I: Minimum salary rises to RM20,000+ with a maximum tenure of 10 years.
- Category II: Minimum salary moves to RM10,000–RM19,999 with a 10-year limit and a required local succession plan.
- Category III: Minimum salary increases to RM5,000–RM9,999 (RM7,000 for manufacturing) with a 5-year cap and a local succession plan.
Who it affects
These changes specifically target Employment Pass (EP) holders and skilled expats under formal Malaysian contracts. If you currently earn between RM15,000 and RM19,999, you will be reclassified from Category I to Category II, which may impact your pass validity and renewal frequency.
The good news for the remote community is that digital nomads using the DE Rantau visa and general tourists are not affected by these specific salary hikes. Expats across all three EP categories retain the right to bring their families, as dependent visa rules remain unchanged.
What to do
If you are planning to apply for or renew an Employment Pass, you must ensure your contract meets the new thresholds before the June 1, 2026 deadline. Applications submitted after this date that do not meet the criteria will be rejected.
Employers should begin drafting formal succession plans for Category II and III roles now. While the government aims to reduce the foreign workforce to 5% by 2035, extensions beyond the new tenure limits may still be granted on a case-by-case basis if the role is deemed of national interest.
Read our full Malaysia guide for the complete picture.