Higher Employment Pass salary thresholds coming to Malaysia in June 2026.

Malaysia’s Expatriate Services Division has announced a revised Employment Pass salary policy, effective 1 June 2026, following Cabinet approval in October 2025. The update significantly raises minimum salary thresholds across all Employment Pass categories and introduces a structured employment duration framework, with direct implications for workforce planning, payroll budgeting and immigration compliance.

The changes align with the Thirteenth Malaysia Plan’s objective to reduce reliance on foreign labour and prioritise suitably qualified local talent, reflecting a policy direction signalled since 2022.

What is changing

Published on 15 January 2026, the revised EP salary policy sets out new minimum salary requirements across all three Employment Pass categories, effective for all new and renewal applications submitted on or after 1 June 2026.

The thresholds have been revised as follows:

• Category I rises from RM10,000 to RM20,000 and above, with passes valid for up to 10 years
• Category II rises from RM5,000–RM9,999 to RM10,000–RM19,999, with passes valid for up to 10 years subject to a succession plan
• Category III rises from RM3,000–RM4,999 to RM5,000–RM9,999, with passes valid for up to 5 years subject to a succession plan

The increases are substantial across all categories, with thresholds doubling for Category I and II roles. Category III sees a similar proportional increase. The introduction of succession plan requirements for Category II and III passes is also a new governance element that did not exist under the previous policy framework, which had been in place since a December 2016 Economic Council decision.

Implications for employers

MOHA has confirmed that consultation sessions with industry players and employers will be conducted ahead of the June deadline to support a smooth transition. In the meantime, businesses should not wait for those sessions to begin their own internal review.

The scale of the increases means that existing compensation arrangements should not be assumed compliant at renewal. Category II and III roles warrant particularly close attention, as salaries that previously met the threshold may now fall short by a significant margin. For roles currently being hired or contracted, offer letters and employment terms should already reflect the new salary floors to avoid complications at the application stage.

The succession plan requirement for Category II and III passes also introduces a longer-term planning obligation. Employers sponsoring expatriates in these categories will need to demonstrate a credible pathway to localisation, which requires forethought in how roles are structured and documented.

What this may mean in practice

For prospective market entrants, the revised policy raises the floor on the cost of bringing in senior and mid-level international talent. Companies assessing Malaysia market entry should revisit compensation assumptions across planned expatriate roles to ensure budgets remain viable under the new thresholds.

For existing operators, the June 2026 deadline creates a defined window to audit EP holders by category, identify salary gaps and determine where contract adjustments or role restructuring may be required. Early action gives more flexibility than waiting for renewals to force the issue.