Quick answer: From 1 June 2026, the minimum basic monthly salary for an Employment Pass is RM20,000 for Category I, RM10,000 to RM19,999 for Category II and RM5,000 to RM9,999 for Category III. The rule applies to new and renewal applications received on or after that date. Existing passes stay valid until they expire, and a succession plan becomes mandatory for Category II and III from 1 January 2027.
- Category thresholds doubled: RM20,000, RM10,000 and RM5,000.
- Only basic salary counts. Allowances, incentives and bonuses are excluded.
- All three categories can now bring dependants for applications from 1 June 2026.
- The Category III cooling-off period and salary exemption no longer apply.
- Category II and III need a succession plan from 1 January 2027.
Salary by Category
Applies from 1 June 2026.
Category I
Minimum basic salary
- RM20,000 and above
Employment period
- Up to 10 years overall
Dependants
- Allowed
Succession plan
- Not listed as required
Category II
Minimum basic salary
- RM10,000 to RM19,999
Employment period
- Up to 10 years overall
Dependants
- Allowed
Succession plan
- Required from 1 January 2027
Category III
Minimum basic salary
- RM5,000 to RM9,999
- RM7,000 to RM9,999 for manufacturing and manufacturing-related services
Employment period
- Up to 5 years overall
Dependants
- Allowed for applications from 1 June 2026
Succession plan
- Required from 1 January 2027
What Changed
Before and after.
| Category | Before 1 June 2026 | From 1 June 2026 |
|---|---|---|
| Category I | RM10,000 and above | RM20,000 and above |
| Category II | RM5,000 to RM9,999 | RM10,000 to RM19,999 |
| Category III | RM3,000 to RM4,999 | RM5,000 to RM9,999 |
Basic monthly salary only. Allowances, incentives, bonuses and salary paid outside Malaysia do not count.
Hiring a foreign employee? We will check your salary package against the right category.
Key Dates
17 October 2025
The Cabinet agrees the revised expatriate employment policy.
14 January 2026
The Ministry of Home Affairs announces the new salary thresholds and the 1 June 2026 start date.
1 June 2026
The new salary thresholds apply to all new and renewal Employment Pass applications received on or after this date. The cooling-off period for Category III and the Category III salary exemption no longer apply.
1 January 2027
A succession plan becomes mandatory for Category II and III applications.
Rules You Need to Know
What counts as basic salary
The threshold uses the basic monthly salary only, and it must be taxable in Malaysia. Allowances, incentives, bonuses and salary paid outside Malaysia are not counted. So a package that reaches RM10,000 only because of allowances does not meet the Category II minimum.
What happens to existing passes
Existing passes stay valid until their expiry date, and holders do not need to reapply. A company can submit a renewal up to three months before expiry. A renewal received on or after 1 June 2026 is assessed under the revised policy.
Change of employer or category
If an expatriate changes employer, the employment period is tied to the new employer and starts from the date of employment with that company. If the pass category changes, the period starts from the issuance date of the new category.
Applications received before 1 June 2026
Complete applications received before 1 June 2026 were assessed under the previous policy. Applications returned for incomplete documents had to be resubmitted within 90 days of the returned date.
Government agencies and public universities
Expatriates in government agencies and public universities remain subject to JPA circulars, and the revised salary policy does not change that.
Common Mistakes
Counting allowances toward the minimum
Only basic salary counts. Allowances, incentives and bonuses are excluded.
Assuming a Category III exemption is available
Exemption applications for Category III no longer apply from 1 June 2026.
Waiting until the last month to renew
A renewal can be submitted up to three months before expiry. Early renewals after 1 June fall under the new salary rule.
Ignoring the succession plan
It becomes mandatory for Category II and III from 1 January 2027. Start planning the local successor now.
Frequently Asked Questions
Quick answers on Employment Pass salary.
What is the minimum salary for an Employment Pass in Malaysia?
From 1 June 2026, the minimum basic monthly salary is RM20,000 for Category I, RM10,000 for Category II and RM5,000 for Category III. These apply to new and renewal applications received on or after that date.
What are the Employment Pass categories and salary ranges?
Category I is RM20,000 and above. Category II is RM10,000 to RM19,999. Category III is RM5,000 to RM9,999, and RM7,000 to RM9,999 for manufacturing and manufacturing-related services.
When did the new Employment Pass salary thresholds start?
On 1 June 2026. The Cabinet agreed the policy on 17 October 2025 and the Ministry of Home Affairs announced it on 14 January 2026.
Does the new salary rule apply to renewals?
Yes. It covers new and renewal applications received on or after 1 June 2026. Existing passes stay valid until they expire, and a holder with a valid pass does not need to reapply.
What counts as salary for the Employment Pass?
Only the basic monthly salary, taxable in Malaysia. Allowances, incentives, bonuses and salary paid outside Malaysia are excluded.
How long can an Employment Pass last?
A company may apply for an employment period of up to 60 months at a time. The overall limits are up to 10 years for Category I and II and up to 5 years for Category III.
What is a succession plan?
A structured employer plan to prepare local employees to replace expatriate roles within the employment period. It may cover role handover, training, knowledge transfer, a timeline and continuity planning.
When is the succession plan required?
It becomes mandatory for Category II and III applications from 1 January 2027.
Can a Category III Employment Pass holder bring dependants?
For Category III applications submitted from 1 June 2026, yes. A Category III pass issued before that date follows the earlier policy, which does not allow dependants.
Is there still a cooling-off period for Category III?
No. Immigration's FAQ says the cooling-off period no longer applies to Category III applications after implementation.
Can a company still get an exemption from the Category III minimum salary?
No. Minimum salary exemption applications for Category III no longer apply from 1 June 2026.
What if I submitted my application before 1 June 2026?
Complete applications received before 1 June 2026 are assessed under the previous policy. Applications returned for incomplete documents must be resubmitted within 90 days of the returned date, or they are cancelled.
About This Guide
This guide was prepared by Neutral Consulting PLT, a Kuala Lumpur firm of chartered accounting and advisory professionals with 10 years in practice. We help foreign and local companies set up, stay compliant and hire talent in Malaysia. Every figure and rule here was checked against the official sources listed below in November 2026.
Sources
Official sources
- Immigration Department (ESD), Revised Employment Pass Salary Policy effective 1 June 2026
- Immigration Department (ESD), Revised Expatriate Salary Policy booklet
- Immigration Department (ESD), Revised Expatriate Salary Policy FAQ
Background
- Bernama, New Expatriate Employment Policy Takes Effect June 1, 14 January 2026
- KPMG, Flash Alert 2026-017: Malaysia
- EY Tax News, Malaysia announces transitional concessions for the succession plan
This page is general information, not legal advice. Agencies change their requirements, so confirm the current rules with the Immigration Department (ESD) or MIDA, or with us, before you act. Checked November 2026.
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