Most Demanded Employee Benefits in Malaysia

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There are some mandatory employee benefits in Malaysia, including paid leave, medical insurance and retirement schemes. Although employees are entitled to these benefits upon employment, the degree of benefits may vary from company to company. Therefore the comparison between company’s benefits is no longer a rare scene when it comes to job hunting.

Given that, it is important for employers to understand the demand of their candidates to ensure successful recruitment, as well as retainment of current employees.

What are the mandatory employee benefits in Malaysia?

The basic employee benefits are simply the foundation to lay down for a competent recruitment. These are commonly offered by employers in Malaysia as company’s benefit for their employees:

  1. Medical & Health Insurance
  2. Paid Leaves
  3. Retirement Schemes

Medical & Health Insurance

As part of the company’s support, employee benefits in Malaysia often include medical and health insurance in their offer. The coverage of company’s provided insurance may include outpatient and/or inpatient treatment, vision/optical, dental, personal accident, and more. Some would work with insurance companies to work out the details and the amount of premium that should be covered by the company. Survey on employee benefits in Malaysia suggested the tendency of choosing a company with quality health benefits over a high-paying job, especially after the pandemic.

Paid Leaves

Employees are entitled to paid leaves upon employment. The types of paid leaves offered as employee benefits in Malaysia include but are not limited to annual leave, maternity leaves, sick leave, hospitalization leave, compassionate leave, and marriage leave. Read more about employees’ entitlement of annual leave in Malaysia here.

Generally, the calculation of leave entitlement depends on the duration of employee’s employment in the company. Using a human resource information system (HRIS) and application would allow higher accessibility for the employees to keep track of their remaining leaves, as well as to request leave. Meanwhile, keeping the company’s benefits up-to-date with the changes in Malaysia’s labor law is just as important. For instance, the bill for prolonged maternity leaves in Malaysia has passed parliament in March 2022.

Retirement Schemes

Employers should extend their support to when employees reach their age of retirement. As a common practice, contributions to employee’s retirement savings, such as EPF and SOSCO are made monthly.

Besides deduction from an employee’s monthly salary according to the pay-as-you-earn scheme, the Malaysia labour law requires employers to contribute to an employee’s EPF at a certain percentage. For employees with a salary under RM5,000 per month, the company is obligated to contribute 13% of the salary, while 12% is contributed when the employee’s salary exceeds the threshold of RM5,000.

There are also companies that provide extra retirement savings in addition to the government’s compulsory contribution. For instance, the company could include a retirement fund as part of an insurance plan for the employees, where part of the premium would go to savings and be available for withdrawal once the employee reached the age of retirement.

Optional Employee Benefits in Malaysia

In the midst of recruitment competition, employers have made efforts to expand employee’s benefits. Currently, employee benefits in Malaysia may have included more unusual perks that have slowly made their way into the list of most demanded employee’s benefits.

Flexibility in Work Model

One thing the workforce was made accustomed to during the pandemic, is the norm of working from home (WFH). Despite equivocal opinions on working from home, it is now a growing trend to achieve better work-life balance for the workforce.

Flexibility in the work model, often referred to as the hybrid working model, is much preferred by the majority of the employees these days. From the practical aspect, the flexibility of choosing work settings helps employees to have a better transition from the full WFH back to the office setting when deemed necessary. Moreover, it is more time-efficient to sometimes work from home as the congested traffic in most cities is not particularly enjoyable.

From the social aspect, allowing employees to have the benefit of work model flexibility is associated with the feeling of being trusted by the employer. Trust can work as an essential element to encourage both task and contextual performance at work (i.e. more likely to perform out-role performance and align with company’s values when one trusts the company).

Allowance and Bonus

As much as intrinsic rewards are important for the employees, having monetary rewards is also as effective and straightforward to enhance employee’s performance. Be it for recruitment or retention of talents, a fair amount of allowance (e.g. travel allowance, parking allowance) and bonus on regular intervals (e.g. tri-monthly bonus, 13th-month bonus) could be seen as extra motivation when added as employee benefits.

For jobs with high weightage on sales and leads to measure employee’s performance, bonuses are particularly rewarding and reinforcing higher levels of work performance.

Professional Training

For the growth of the company and employees themselves, workshops and professional training are often included in employee benefits in Malaysia. Themed workshops that target specific skill sets (e.g. newly implemented software) or characteristics (e.g. leadership) could be carried out to encourage continuous learning within the company. For employees that prioritize personal growth and intrinsic motivation, having the opportunity to attend sponsored lessons are definitely ranked highly on their demands for company’s offered benefits.


In short, employee benefits in Malaysia have been developed into a framework that does not stop at the bare minimum but to the extent to seem appealing to newcomers as well as the existing employees.

One thing to note is that companies should make their employee benefits known. With the help of GreatDay HR, employers could craft an all-around list of employee benefits within the software. Employees with access to the application could easily revisit the list of benefits anytime anywhere. Furthermore, employees are given the benefit to access online health consultation via the application, that is real-time and available 24/7.

Ready for a demo? Enquire today!

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