Malaysia's minimum wage rises to RM2,000 from June 2027: MSMEs with sales below RM50 million are exempt

Local headlines nearly all open with RM2,000. What decides when the money actually reaches you is the half-sentence that comes after that figure.

The Budget 2027 speech says the minimum wage is raised from RM1,700 to RM2,000 with effect from June 2027, and that MSMEs with sales below RM50 million are exempt, to give them room to adjust their business models. The finance ministry's budget portal

The Prime Minister, who is also Minister of Finance, tabled the speech in the Dewan Rakyat on Friday, 9 October 2026. The Malay original goes on to say that more than 4 million workers are subject to the new minimum wage rate; the official English translation says instead that more than 4 million workers will benefit. Page 1 of the English translation states it plainly: where the two versions differ, the Bahasa Malaysia version prevails.

The main points

• The minimum wage rises from RM1,700 to RM2,000 from June 2027. The speech and the official summary of measures word it the same way, and both stop at the month without naming a day. The same passage of the speech says employee compensation in Malaysia is still low as a share of gross domestic product (GDP), at 33.9%.
• MSMEs with sales below RM50 million are exempt. The speech says the exemption is there to give room to adjust business models, and page 4 of the summary of measures puts it the same way. None of the six official documents — the speech in Malay and its official English translation, the tax measures in Malay and in English, and the summary of measures in Malay and in English — says whether an employer has to apply, or how long the exemption lasts. How an MSME is identified is not in that minimum wage sentence either; the tax measures appendices carry a separate definition on a different basis, which the reader questions below set out.
• RM2,500 a month for semi-skilled jobs and graduates — the speech calls this a first step. It comes under the reform of the workers' income framework, and neither the speech nor the summary of measures gives a start date.
• The living wage benchmark at government-linked companies goes from RM3,100 to RM3,400 a month, from 2027. It is set to benefit 230,000 employees. This is a commitment by government-linked investment companies (GLICs) and government-linked companies (GLCs), not the statutory national minimum wage; the speech says the government welcomes it. The 2027 start comes from the summary of measures.
• On the tax side: relief for the individual and dependent relatives goes from RM9,000 to RM12,000, and two bands come down by 1 percentage point each. The speech notes this relief had not been reviewed since 2010 (it has stood at RM9,000 since the year of assessment 2010, when it was raised from RM8,000). On the new table in the official appendix, the rate on chargeable income of RM70,001 to RM100,000 falls from 19% to 18%; on the new band of RM100,001 to RM150,000 it falls from 25% to 24%; and on RM150,001 to RM400,000 it stays at 25%. The appendix heads that section as a proposal, effective from the year of assessment 2027.
• One group of taxpayers will pay more: on the new table the 30% rate starts above RM1,000,000 instead of above RM2,000,000. On the current table the top band is income exceeding RM2,000,000, with RM600,001 to RM2,000,000 at 28%. The appendix sets out bands of chargeable income (Chargeable Income Band / Tax Rate), each with its own rate: chargeable income that falls between RM1,000,001 and RM2,000,000 sits in the new table's band for income exceeding RM1,000,000, taxed at 30%, and in the current table's band of RM600,001 to RM2,000,000, taxed at 28%. Across the whole of the tax measures appendices (36 of them), it is the only change on the individual income tax side that raises a rate.

When the money reaches you

• June 2027: the RM2,000 minimum wage. Employers outside the exemption pay at that rate from that month. The official documents give the month only.
• Year of assessment 2027: the RM12,000 relief and the new rate table. That means income earned in 2027 is taxed at the new rates; it is not a change you will see on a January 2027 payslip. The speech does the sum: the higher relief plus the lower rates give up to RM1,600 in additional disposable income to approximately 5 million taxpayers.
• Across 2027: the STR and SARA allocation rises to RM16 billion, from RM15 billion. The speech puts it this way: all STR recipients will receive SARA, of up to RM150 a month or up to RM1,800 a year — up to 9 million recipients in all.
• Across 2027: a few worked examples from the table in the summary of measures, all figures annual. A household with monthly income below RM2,500 and 5 or more children gets RM3,400 in STR and SARA combined for 2027; households classed as poor (Miskin) and hardcore poor (Miskin Tegar) get a further RM1,200 or RM600 of additional SARA for the year. The table shows an annual maximum of RM4,600 and a minimum of RM600. Another row covers single people aged 21 to 59 with monthly income below RM2,500: they get only RM600 of SARA, and the STR column for that row shows a dash rather than a figure, with nothing in the table to say whether it means nil or not applicable.
• Estimated for February and August 2027: the two RM100 payments for non-STR recipients. Malaysians aged 18 and above who do not receive STR get RM100 of SARA MADANI twice. Those two months come from the summary of measures, which words it as an estimate. The speech times the same two payments differently: one ahead of Aidilfitri, the other ahead of the 70th National Day (the Malay speech reads “ambang 7 dasawarsa Merdeka”). Neither document names a day.

What readers ask most

• Will I definitely be on RM2,000 in June 2027? It depends on your employer. MSMEs with sales below RM50 million are exempt, which the speech says gives them room to adjust their business models. How they are identified, whether they must apply, and how long the exemption runs are not in the speech or in the summary of measures. Page 17 of the tax measures appendices carries an MSME definition (Appendix 11 in English, Lampiran 11 in Malay), and it is the one used for company income tax: paid-up capital in ordinary shares of RM2.5 million or below, together with annual sales not exceeding RM50 million. The minimum wage sentence says sales below RM50 million and says nothing about capital — two different bases, and the official text does not say whether the two describe the same companies. The documents give the month, June 2027, but not the day.
• Does the figure of more than 4 million workers count the people who will benefit? The Malay speech says those workers are subject to the new minimum wage rate; the official English translation says they benefit. Page 1 of the translation says the Bahasa Malaysia version prevails where the two differ, so the Malay wording governs: the figure describes who the new rate applies to.
• When do the tax cuts show up? The appendix says from the year of assessment 2027, and the section is headed as a proposal.
• Is anyone going to pay more tax? Yes — anyone whose chargeable income falls between RM1,000,001 and RM2,000,000: the new table puts that band at 30%, where the current table has 28%. The speech describes the top band as income exceeding RM1,000,000, with the rate adjusted to 30%.
• Which reliefs were widened? The speech lists five: medical relief extended to postnatal care services; care for parents and grandparents no longer limited to health spending; sports equipment extended to sports shoes; course and skills fees extended to all fields of study and to children's tuition; and lifestyle relief extended to AI subscriptions and to vaccination and adoption costs for pets adopted from registered centres.
• How big is this budget? The RM510 billion in the speech is the total for “leveraging the nation's full resources”, which is not the same as federal spending; the year before, on the same basis, it was RM470 billion. The speech sets out the five parts itself: RM376.8 billion in federal operating expenditure, RM83 billion in federal development expenditure, RM25 billion in GLIC investments, RM11 billion in public-private investments and RM14.2 billion in investments by federal statutory bodies and MKD companies.
• What is there for gig workers? The speech says 600,000 people make their living as e-hailing and p-hailing drivers, and that the Gig Consultative Council (Majlis Perundingan Gig) is negotiating a minimum income rate, an income formula and minimum social protection standards, to be finalised early in 2027. The same passage mentions an RM160 million scheme from 2027, co-funded by the government and an e-hailing platform.

Also worth noting: MediAsas starts in January 2027 — but no premium has been named

• Launches nationwide in January 2027, with hospital charges set by diagnosis and treatment category. The summary of measures lists MediAsas allocations on three separate lines; this one is RM20.0 million.
• EPF (KWSP) members under the age of 55 may pay MediAsas premiums from their Akaun Sejahtera.
• For SMEs with fewer than 75 employees, the first-year premium is subsidised by RM200 per employee, capped at 50 employees per company. It is expected to benefit up to 200,000 workers. This is a separate line in the summary, allocated RM40.0 million: the two figures are two lines side by side, not a total and a part of it. The test here is the number of employees, which is not the sales test used for the minimum wage exemption.
• The third line is for continuing the expansion of MediAsas, with RM1.7 million.
• None of the six official documents gives the premium itself. The speech says only that it will be affordably priced, and the summary of measures gives the allocations and nothing more. A uniform charge category for private hospitals also starts from 2027.

Where to read the official text

• The portal: the Malay page belanjawan.mof.gov.my/ms carries the speech, the tax measures in Malay and the summary of measures in Malay; the official English translation, the tax measures in English and the summary of measures in English are on the English page belanjawan.mof.gov.my/en.
• The speech (Malay, the primary text): ub27.pdf. The minimum wage is in paragraph 32, individual income tax in paragraphs 29 and 30.
• The official English translation: bs27.pdf. Page 1 states that the Bahasa Malaysia version prevails where the two differ.
• The tax measures appendices: tax-measures.pdf, in English and langkah-cukai.pdf, in Malay. The current and proposed rate tables are in Appendix 1 of the English version, the relief limit in Appendix 2.
• The summary of measures, in Malay: touchpoint-budget-bm.pdf. The three minimum wage lines are on page 4, the STR and SARA table on page 2, MediAsas on page 22.
• The summary of measures, in English: touchpoint-budget-en.pdf. Opened, it holds a cover page only, with no content pages.

Before you work out where you stand

• If you are on the RM1,700 minimum wage now: ask your employer whether the company's sales are below RM50 million, because MSMEs below that figure are exempt. Employers outside the exemption pay RM2,000 from June 2027, and the official text gives no day.
• If you are a taxpayer about to work out your tax again: the RM12,000 relief and the new rate table apply to income for the year of assessment 2027, and the appendix calls them proposals. For the band of chargeable income between RM1,000,001 and RM2,000,000, the new table says 30% where the current table says 28%.
• If you are waiting on the two RM100 SARA MADANI payments: they go to Malaysians aged 18 and above who do not receive STR; the summary of measures estimates them for February and August 2027 and gives no day.

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