Malaysia Employment Pass Salary Thresholds Since 1 June 2026

The increase took effect on 1 June 2026 and applies to renewals too

Following Cabinet approval on 17 October 2025 and a Ministry of Home Affairs announcement on 14 January 2026, revised minimum salaries for all three Employment Pass categories took effect on 1 June 2026. Every category roughly doubled: Category I rose from RM10,000 to RM20,000 and above, Category II from RM5,000–RM9,999 to RM10,000–RM19,999, and Category III from RM3,000–RM4,999 to RM5,000–RM9,999 (RM7,000–RM9,999 in the manufacturing sector and manufacturing-related services).

These thresholds are calculated on basic salary only — allowances, bonuses, commissions and benefits-in-kind aren’t counted toward the minimum, even where they push the total package comfortably above it. A role advertised at RM9,000 basic plus a RM3,000 allowance still needs its basic salary raised to clear a RM10,000 threshold; the allowance doesn’t help.

From 1 January 2027, Category II and III applications must also include a succession plan — broadly, the employer needs to show a plan for developing a Malaysian employee into the role over time, rather than treating the position as permanently held by a foreign hire. Category I, which is defined by a basic salary of RM20,000 or more rather than by job title, carries no such requirement.

The change applies to all new and renewal Employment Pass applications submitted on or after 1 June 2026 — including renewals of passes that were originally granted under the old, lower thresholds. That’s the detail worth planning around: a Category II pass first issued at RM6,000 basic stays in Category II at renewal only if the basic salary reaches RM10,000; otherwise it must be applied for as Category III, which is treated as a new application.

For roles paid below the revised minimum, the timing option has gone: complete applications submitted before 1 June 2026 were assessed under the old thresholds, but anything filed now needs the revised minimum regardless of when the person’s employment or previous pass began. VIVOS (M) Sdn. Bhd. handles Employment Pass filings end to end and can flag which of your current or planned EP holders will need a salary review before their next renewal.

Malaysia Employment Pass categories as at October 2026

As at October 2026 a basic monthly salary of RM20,000 or more is Category I, RM10,000–RM19,999 is Category II and RM5,000–RM9,999 is Category III. The category then fixes how long each pass lasts and how long the expatriate can stay with one employer; passes are not automatically issued for the maximum length.

Category	Basic monthly salary	Each pass	Maximum with one employer	Succession plan
I	RM20,000 or more	Up to 5 years	10 years	Not required
II	RM10,000–RM19,999	Up to 2 years	10 years	From 1 January 2027
III	RM5,000–RM9,999 (RM7,000–RM9,999 in manufacturing and related services)	Up to 12 months	5 years	From 1 January 2027

All three categories may bring dependants and parents; Category III passes issued before 1 June 2026 may not. TalentCorp’s 1:3 Internship Policy, fully implemented on 1 June 2026, also requires 3 internship placements per Category I approval, 2 per Category II and 1 per Category III.

What changed in 2025–2026: key dates

The policy took effect on 1 June 2026 but is still being phased in: the succession plan becomes mandatory on 1 January 2027 and the last salary concession ends on 1 June 2027.

Date	What changed
17 October 2025	Cabinet approves the revised expatriate salary policy
14 January 2026	Ministry of Home Affairs announces it
12 February 2026	ESD updates its FAQ on transition rules
20 May 2026	MDEC confirms a concession for Global Business Services (GBS) language roles
1 June 2026	Revised bands, employment limits and Category III dependants take effect; the Category III minimum salary exemption and cooling-off period end; MIDA-sector applications move to the MIDA Expatriate System
Before 15 June 2026	Deadline for appeals against pre-June rejections to use the old policy
1 January 2027	Succession plan mandatory for Category II and III applications
1 June 2027	GBS language-role concession ends

Sector rules and exceptions to the salary bands

Manufacturing, MDEC’s GBS sector and MIDA-supervised companies follow different rules from the standard bands.

Situation	Rule as at October 2026
Manufacturing (manufacturing licence or exemption letter) and MIDA service sectors with approved incentives, status or grants	Category III starts at RM7,000 basic
MDEC-regulated GBS roles needing native or near-native language skills	Eligible Category III applications use the pre-June 2026 salary levels until 1 June 2027, subject to MDEC verification
Manufacturing and selected services companies under MIDA	Apply through the MIDA Expatriate System, not ESD Online
Government agencies and public universities	Public Service Department (JPA) circulars apply
Work outside Peninsular Malaysia	ESD states its Employment Pass is valid only in Peninsular Malaysia

Worked example: hiring at RM12,000 or RM9,000 a month

RM12,000 basic is Category II; RM9,000 basic is Category III, with shorter passes and half the time allowed with the employer. Moving the RM9,000 hire up a category takes RM1,000 more basic a month.

1. RM12,000 sits within RM10,000–RM19,999: Category II. Passes of up to 2 years mean at least 5 approvals over the 10-year limit (10 ÷ 2).
2. RM9,000 sits within RM5,000–RM9,999: Category III, including in manufacturing, where the floor is RM7,000. Passes of up to 12 months mean at least 5 approvals over the 5-year limit.
3. RM9,000 basic plus a RM3,000 allowance is still Category III: only the basic counts.
4. Restructured as RM10,000 basic plus RM2,000 allowance, the same RM12,000 package qualifies for Category II.
5. Raising basic to RM10,000 and keeping the allowance costs RM1,000 × 12 = RM12,000 a year, before statutory contributions.
6. If the Category III hire reaches 5 years and then moves to Category II, the count restarts from the new pass’s issue date, allowing up to 10 more years.
7. In both cases a spouse and children can join, and renewals filed from 1 January 2027 need a succession plan.

Assumes new applications in October 2026, outside the GBS concession; immigration fees, EPF and SOCSO are excluded.

How to check existing Employment Pass holders against the revised bands

Review each pass before its renewal window opens, 3 months before expiry, because the salary must meet the revised band when you file.

1. List each holder’s basic monthly salary, pass expiry date and first EP approval date with your company.
2. Map each salary to the revised bands, applying the RM7,000 floor in manufacturing; ask MDEC whether a GBS language role still qualifies for the old levels.
3. Compare time served with the 10-year or 5-year limit.
4. Agree salary changes before filing: a change of category is a new application, and the existing pass must first be cancelled or shortened.
5. From 1 January 2027, attach a succession plan for Category II and III; your own format is accepted until a template is issued.
6. File within the 3-month window while the pass is still valid, through ESD Online, MDEC or, for MIDA-supervised companies, the MIDA Expatriate System.
7. Renew dependant passes under the new category’s rules; existing ones stay valid until expiry.

Common mistakes with the revised salary rules

Most problems come from misreading how categories, pass lengths and time limits fit together.

• Treating ‘up to 10 years’ as the pass length: it is the limit with one employer, and each pass is still approved for up to 5 years, 2 years or 12 months.
• Assuming a Category II holder on RM6,000 renews in Category II: that salary is now Category III, with 12-month passes and a 5-year limit.
• Raising pay mid-pass and expecting an automatic upgrade: a change of category is a new application.
• Counting pay that is not fixed basic salary paid by the Malaysian employer and taxable in Malaysia, such as allowances or overseas payroll.
• Applying the GBS concession outside MDEC-regulated GBS companies, or to roles without a native-level language requirement.
• Filing on ESD Online when the company falls under MIDA.
• Letting the pass lapse before renewing: the renewal must be filed while the pass is valid.

Employment Pass salary policy terms explained

These terms appear in ESD, MDEC and MIDA guidance.

• Basic salary: fixed monthly pay, taxable in Malaysia, excluding allowances and bonuses.
• Pass duration: the length of one approval, up to 5 years, 2 years or 12 months by category.
• Employment duration: the maximum time with one employing company, 10 years (Categories I and II) or 5 years (Category III).
• Succession plan: the employer’s plan to prepare local staff to take over the expatriate’s role.
• Manufacturing-related services: MIDA service sectors with approved incentives, status or grants.
• MIDA Expatriate System (MES): MIDA’s platform for pass applications from the sectors it supervises.
• Global Business Services (GBS): an MDEC-regulated sector with a Category III language-role concession until 1 June 2027.