The average salary in Malaysia is 6,590 MYR (Malaysian Ringgit) per month or 1,485 US Dollars (according to the May 2023 exchange rate.)
This is significantly lower than the average salary of other developed countries like the United States, Hong Kong, South Korea, Singapore, and the United Kingdom. For this reason, Malaysia’s one of the most popular outsourcing destinations in Southeast Asia.
But is it the best option for your business?
In this article, we’ll discuss various facets of the average and median salary in Malaysia.
We’ll also explore the average salaries by experience, education level, sector, city, and increments. Finally, we’ll look into the benefits and challenges of outsourcing to Malaysia.
Table of Contents
Let’s dive in.
Statistics and trends around Malaysia’s average salary
A country’s average salary can be a good indicator of how much an employee typically earns.
According to Salary Explorer, the average salary in Malaysia is 79,000 MYR annually (17,805 USD).
The typical salary range in Malaysia is 1,670 MYR (lowest average monthly salary to 29,400 MYR (highest average monthly salary). However, the actual maximum salary is higher.
But since salaries vary significantly, it’s best to examine them from various perspectives to understand how much you should pay employees.
Let’s start by exploring the average and median salaries in Malaysia.
A. Average and median salary in Malaysia
When researching how much to pay employees in Malaysia, it’s helpful to learn both the average and median salaries.
1. Average salary
The average monthly salary (also known as mean monthly salaries) is 6,590 MYR per month. The average salary represents what the “typical employee” earns and can be pulled higher by high salaries or lower by low salaries.
So how is it calculated?
Say employee 1 earns $30,000, employee 2 earns $40,000, employee 3 earns $100,000. The total of $170,000 is divided by 3, to get the average salary of $56,666.
2. Median salary
The median salary of Malaysia is 5,790 MYR per month. In other words, half (50%) of the population are earning less than 5,790 MYR while the other half earn more than 5,790 MYR.
How is it calculated?
Median monthly salaries represent the middle salary value.
For example: Employee 1 earns $30,000, Employee 2 earns $50,000, Employee 3 earns $90,000. The salary in the middle (the median salary) is $50,000.
Since the median salary represents a specific point in the distribution, it cannot be pulled higher or lower by salaries at the extreme ends of the distribution.
B. Average salary by experience
In Malaysia, a person’s work experience plays a significant role in their salary.
According to a 2023 salary report by Salaryexplorer.com:
- Employees with between two to five years of experience earn 32% more than juniors or inexperienced employees.
- Professionals with more than five years of experience have a 36% higher salary than first-time job seekers.
- Employees with 10 and more years of experience earn 21% more, and those with 15 and more years of experience have a 14% higher salary.
Employers in Malaysia are generally willing to pay a higher salary to experienced employees. This is because a specialized position is harder for human resources professionals to fill than an entry level job.
As a result, a person’s salary doubles their starting salary when they cross the 10-year experience mark.
C. Average salary by education
In Malaysia, like in most parts of the world, higher education usually results in a bigger salary.
According to 2022 labor statistics:
- Professionals with a college degree earn more than their counterparts with the same experience.
- Employees with a certificate or diploma make 17% more than their colleagues with only a high school diploma.
- Employees with a Bachelor’s Degree earn 24% more than those with a certificate or diploma.
- Professionals with a Master’s Degree earn 29% more than those with a Bachelor’s Degree.
- Professionals with a Ph.D. usually earn the highest salary – 23% more than Master’s Degree holders on average while doing the same job.
D. Average salary by sector
Here are the average salaries in Malaysia based on industry:
| Industry | Average Monthly Salary |
| Administration | 3,910 MYR |
| Banking and Financial Services | 7,160 MYR |
| Construction | 3,880 MYR |
| Customer Service | 4,510 MYR |
| IT and Computer Science | 6,610 MYR |
| Legal | 7,950 MYR |
| Health and Medical | 9,830 MYR |
| Real Estate | 7,460 MYR |
Source: Salaryexplorer.com
However, average salaries differ within various industries depending on job title and job description.
For example, in the IT industry, the average annual salary of a data analyst is 44,172 MYR, whereas a software engineer usually earns around 48,516 MYR.
Moreover, salaries in the public sector are higher than private sector salaries.
E. Average salary by city
The average salary in Malaysia varies from city to city.
According to the Department of Statistics Malaysia (DOSM), average salaries in rural areas are usually lower than in urban areas. But the cost of living is also lower in these areas.
Here’s a breakdown of the average income in the major Malaysian cities:
| City | Average Monthly Salary |
| Kuala Lumpur | 7,130 MYR |
| Johor Baharu | 6,640 MYR |
| Kota Kinabalu | 6,540 MYR |
| Kuching | 6,400 MYR |
| Petaling Jaya | 6,940 MYR |
| Ipoh | 7,040 MYR |
| Klang | 6,110 MYR |
| Putrajaya | 3,250 MYR |
Sources: Salaryexplorer.com and Payscale.com
F. Average annual salary increments
The average salary increase per annum in Malaysia is 6%. But it can fluctuate based on factors like industry and experience.
1. Average annual salary increments based on industry
Here’s a breakdown of the annual salary increment rate based on the industry for 2021:
| Industry | Average Annual Increase |
| Banking | 4% |
| Energy | 8% |
| Information Technology | 3% |
| Healthcare | 7% |
| Travel | 2% |
| Construction | 6% |
| Education | 1% |
Source: Salaryexplorer.com
2. Average annual salary increments based on seniority levels
Here’s an overview of Malaysia’s average salary increase rate by seniority level:
| Experience Level | Average Annual Increase |
| Junior Level | 3-5% |
| Mid-Level | 6-9% |
| Senior Level | 10-15% |
| Top Management | 15-20% |
Source: Salaryexplorer.com
Note: The salary figures in this article are taken from different salary surveys, websites, etc., and the actual figures may vary depending on the factors mentioned above (location, experience, etc.)
It’s also important to remember that various factors like the global economic situation and Malaysia’s Conditional Movement Control Order (MCO), implemented to control the population’s movement during the pandemic, may also impact average salaries.
Now that we know the average salary let’s discover whether Malaysia makes a good outsourcing location.
Should you consider outsourcing to Malaysia?
The Malaysian Government has implemented numerous national programs aimed at developing its digital and e-commerce industries. However, as an outsourcing destination, it also has its shortfalls.
Let’s examine both the benefits and the challenges.
A. 2 key benefits of outsourcing to Malaysia
Here’s why you should consider outsourcing to Malaysia.
1. Technological leaders
In addition to a digitally advanced economy, Malaysia is a leader in the adoption of Artificial Intelligence (AI) technologies in intelligent cities to maximize economic and social benefits.
Malaysia is also experiencing a push in e-Commerce, Big Data & Analytics, nanotechnology, and the Internet of Things (IoT) sectors – all with excellent revenue potential.
Moreover, the Government implemented the Mandatory Standard for Access Pricing (MSAP) to create multimedia technology hubs, advanced telecommunications infrastructure, and affordable high-speed Internet services. The MSAP successfully reduced broadband prices by 49% and tripled internet speeds.
2. Investor-friendly policies
The Malaysian Ministry of Housing and Local Government (KPKT) recently launched the Malaysia Smart City Framework. This initiative aims to develop urbanized areas into smart cities geared to support global businesses from various industries, including the outsourcing sector.
Additionally, Malaysia has also introduced the National Development Policy (NDP) and National Vision Policy (NVP). These policies ensure Malaysians have equal opportunity in economic activities. It also offers opportunities for global entities in terms of investment ownership and control.
B. 2 major challenges of outsourcing to Malaysia
Despite its benefits, outsourcing to Malaysia does come with its challenges.
1. Limited competitive human capital
With just 50% of the population making up its entire workforce, access to skilled, experienced employees may be a challenge, particularly in knowledge-based and specialized industries.
In Malaysia, continuing education after you graduate college is expensive. A Masters Degree can cost between 32,900 MYR and 98,800 MYR, which can limit access to fresh graduates and educated professionals.
2. Rising cybersecurity breaches
The Malaysian Government passed the Personal Data Protection Act (PDPA) in 2013.
However, there’s still been a rise in cybercrime, including online exploitation and identity theft.
In a 2017 incident, the data of 46 million mobile phone users and 20,000 medical records were leaked.
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Final thoughts
Malaysia has the potential to become a leading outsourcing destination, given its investor-friendly policies and focus on technology. But it also has its share of challenges.
That’s why it’s wise to review average salary data and weigh the pros and cons before deciding on Malaysia as your outsourcing destination.
Fortunately, the data in this article is a good starting point for your research and can help you decide if outsourcing to Malaysia is the ideal fit for your company.