Employment contract in Malaysia: Template, Key Clauses and Local Law (2026)

What a Malaysian employment contract is, and what local law requires An employment contract in Malaysia is a contract of service between an employer and an employee. The main statute is the Employment Act 1955, which was significantly amended with effect from 1 January 2023. Dismissal and unfair dismissal claims are handled under the Industrial Relations Act 1967, and the general law of contract sits under the Contracts Act 1950. Key rules after the 2023 amendments: - Coverage. The Employment Act now reaches all employees, though some provisions, such as overtime, apply only up to a wage threshold. Check which parts apply to a given role.

• Working hours. The weekly cap fell from 48 to 45 hours. A normal day is up to 8 hours, with a rest break after 5 continuous hours. Overtime on a normal day is 1.5 times the hourly rate, 2 times on a rest day and 3 times on a public holiday.
• Minimum wage. The national minimum wage is RM1,700 a month, effective 1 February 2025 for employers with five or more workers, and from 1 August 2025 for smaller employers.
• Leave. Paid maternity leave is 98 days, and married male employees get 7 days of paternity leave. Annual and sick leave scale with length of service.
• Flexible work. Employees have a statutory right to apply for a flexible working arrangement, and the employer must respond within a set time.
• Notice. The contract can set the notice period, but where it is silent the statutory minimum applies, commonly 4 weeks for under 2 years of service, 6 weeks for 2 to 5 years and 8 weeks for over 5 years. Notice must be equal for both sides.
• Statutory contributions. Employers deduct and contribute to the Employees Provident Fund (EPF), the Social Security Organisation (SOCSO) and the Employment Insurance System (EIS). This is general guidance, not legal advice. Confirm the current position with the Ministry of Human Resources before you rely on any clause. Last verified October 2026. ## Malaysia employment contract template Copy the block below and fill the bracketed fields. ``` CONTRACT OF SERVICE Made on [DATE] BETWEEN: [COMPANY NAME], company no. [no.], of [address] ("Company") AND [EMPLOYEE NAME], NRIC / passport [no.], of [address] ("Employee") 1. POSITION The Company employs the Employee as [JOB TITLE], with duties of [summary]. The Employee reports to [ROLE]. 2. START DATE AND PROBATION Employment begins on [START DATE]. The first [N] months are probation, during which the notice period is [N]. 3. HOURS AND REST DAY Normal hours are up to 8 a day and 45 a week, with a rest break after 5 continuous hours and [one] rest day each week. [Overtime terms where the Employee is covered.] 4. REMUNERATION Basic salary of RM [AMOUNT] a month, not less than the national minimum wage, paid by [date] each month, by [method]. [Allowances, bonus.] 5. STATUTORY CONTRIBUTIONS The Company will make EPF, SOCSO and EIS contributions as the law requires, and deduct the Employee's share. 6. LEAVE Annual leave of [N] days, plus statutory sick, hospitalisation, maternity or paternity and public holiday leave as the law provides. 7. CONFIDENTIALITY The Employee will keep the Company's confidential information secret during and after employment and use it only for the Company's benefit. 8. INTELLECTUAL PROPERTY Work the Employee creates in the course of employment belongs to the Company, and the Employee assigns those rights to the Company. 9. NOTICE AND TERMINATION Either party may end the employment on [N] written notice, equal for both sides, or payment in lieu. The Company may dismiss for misconduct after due inquiry. 10. GOVERNING LAW This contract is governed by the laws of Malaysia. Signed for the Company: __________ Employee: __________

- **Hours and overtime (clause 3).** Keep within 45 hours a week. Overtime pay applies to employees within the wage threshold at 1.5 times normal, 2 times on a rest day and 3 times on a public holiday, capped at 104 overtime hours a month.
- **Remuneration (clause 4).** Pay at least RM1,700 a month where the minimum wage applies, and pay salary within 7 days of the end of the wage period.
- **Statutory contributions (clause 5).** EPF, SOCSO and EIS are compulsory. Make sure the contract and payroll both reflect them.
- **Notice (clause 9).** Set an equal notice period for both sides. Where the contract is silent, the statutory tiers by length of service apply. ## Common mistakes to avoid - A non-compete that tries to bind the employee after employment ends. Under section 28 of the Contracts Act 1950, a clause that restrains a person from a lawful trade or profession after the contract ends is void, and Malaysian courts do not apply the English reasonableness test to save it. Protect the business instead with confidentiality and non-solicitation framed around protecting information and relationships.
- Treating the Employment Act minimum notice as a ceiling. It is a floor where the contract is silent.
- Forgetting the flexible working arrangement request process.
- Missing EPF, SOCSO or EIS contributions.
- Dismissing without due inquiry and a just cause, which invites an unfair dismissal claim. ## Probation, confirmation and unfair dismissal Probation in Malaysia does not give an employer a free hand. A probationer has broadly the same protection against unfair dismissal as a confirmed employee, so ending probation still needs a fair reason and a fair process. Set the probation length and any extension clearly, and if performance falls short, record the concerns and give the employee a chance to improve before you act. Confirmation should be a deliberate decision, not a date that passes unnoticed. If the contract is silent and the employee keeps working past the probation period, they can be treated as confirmed. A dismissal that the employee believes is without just cause or excuse can be taken to the Industrial Court, which can order reinstatement or compensation. So the practical rule is simple: document performance, follow a fair process, and do not assume probation removes the employee's rights. ## A note on jurisdiction and Adira's coverage The 2023 amendments and the 2025 minimum wage changes moved several figures, so confirm the current rule with the Ministry of Human Resources. Adira is India first in its depth today and uses an international setting for other jurisdictions. Deep, verified Malaysian coverage is on Adira's roadmap rather than established today, so treat any Malaysia specific output as a draft to check locally. ## Where a contract workspace helps A template gets you a sound Malaysian contract. The ongoing work is keeping every contract consistent across hires, matching each to the current hours, notice, minimum wage and statutory contributions, and tracking signed versions and key dates as the team grows. When drafting, review and tracking sit in one AI workspace tuned to how your company hires, the notice, leave and EPF position stay consistent across every Malaysian hire, with edits made in plain language. [Adira](https://adiralaw.com) is one workspace built to work this way, with Malaysian depth on its roadmap. This template alone is enough to put a fair contract in place today.