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Malaysia's Ministry of Home Affairs has revised Employment Pass minimum salary requirements effective June 1, 2026, doubling or tripling thresholds across all three EP categories. Category I minimum rises from MYR 10,000 to MYR 20,000 monthly; Category II from MYR 5,000 to MYR 10,000; Category III from MYR 3,000 to MYR 5,000. The policy also introduces maximum employment durations (10 years for Categories I and II, 5 years for Category III) and requires succession plans for Categories II and III demonstrating knowledge transfer to local hires. Changes apply to all new applications and renewals submitted on or after June 1, 2026.
Malaysia's Ministry of Home Affairs has revised Employment Pass (EP) minimum salary requirements, effective June 1, 2026. The policy doubles or triples thresholds across all three EP categories, introduces maximum employment durations, and mandates succession planning for mid- and lower-tier passes. Category I minimum monthly salary rises from MYR 10,000 to MYR 20,000; Category II from MYR 5,000 to MYR 10,000; Category III from MYR 3,000 to MYR 5,000.
Who is affected
All employers sponsoring foreign nationals under Malaysia's Employment Pass scheme. The revised thresholds apply to new EP applications and renewals submitted on or after June 1, 2026, regardless of company size or industry.
What's changing
The Ministry of Home Affairs increased minimum monthly salaries and capped employment durations as follows:
| EP Category | Previous Minimum | New Minimum (from June 1, 2026) | Maximum Duration |
|---|---|---|---|
| Category I | MYR 10,000 | MYR 20,000 | 10 years |
| Category II | MYR 5,000 | MYR 10,000 | 10 years |
| Category III | MYR 3,000 | MYR 5,000 | 5 years |
Category II and III passes now require employers to submit a succession plan demonstrating knowledge transfer to local hires. Category III employment is capped at five years total. The policy implements objectives from Malaysia's Thirteenth Malaysia Plan (RMK-13) to reduce foreign labour reliance and prioritise qualified local talent. The Cabinet approved the framework on October 17, 2025, following consultations with industry stakeholders since 2022.
What NEO partners and clients should do
- Before June 1, 2026: Review current EP holder salaries against new thresholds and adjust compensation structures for foreign hires whose passes renew after June 1.
- Before June 1, 2026: Prepare succession plans for Category II and III roles, documenting knowledge transfer processes to local employees.
- From June 1, 2026: Submit all new and renewal EP applications with salaries meeting revised minimums and include succession plans for Category II and III applications.
- Ongoing: Plan workforce transitions for Category III roles approaching the five-year cap and monitor announcements from the Expatriate Services Division for stakeholder engagement sessions and implementation guidance.
