Budget 2025: Raising Wages, Promoting Inclusion, and Boosting Retirement Savings (Issue 1 of 2)
The Malaysian government announced an increase in the minimum wage from RM1,500 to RM1,700 per month as part of Budget 2025. This measure aims to improve workers’ quality of life and enhance economic stability. The new minimum wage will take effect on February 1, 2025.
This initiative reflects the government’s strong commitment to enhancing the economic well-being of low-income workers and ensuring a more stable livelihood. The policy aims to enable workers to maintain sustainable living conditions while supporting Malaysia’s overall economic growth.
However, for small businesses with fewer than five employees, a six-month grace period will be granted to allow them to adapt to the new wage requirements. As a result, the implementation for these businesses will be deferred to August 1, 2025. This approach is intended to alleviate the economic burden on small business owners and facilitate a gradual adaptation to the new policy.
| Criteria | Current Minimum Wage | New Minimum Wage | New Minimum Wage with Fewer Than 5 Employees |
|---|---|---|---|
| Monthly Wage | RM1,500 | RM1,700 | RM1,700 |
| Effective Date | - | 1 February 2025 | 1 August 2025 |
Key Expected Outcomes
- Reducing Income Inequality: The increase in wages for low-income workers aims to alleviate income disparities within society and enhance economic inclusivity.
- Promoting Economic Growth: By boosting purchasing power, this initiative is expected to stimulate the domestic market and foster the growth of businesses and local economies.
- Enhancing Social Stability: Improving the living standards of workers and their families contributes to long-term social stability.
This minimum wage increase represents a significant step toward strengthening the sustainability of Malaysia’s labor market and promoting greater social inclusion. Stay tuned for our upcoming newsletter, where we will share more details about other key policies under Budget 2025.
