Malaysia Expatriate Employment Policy 2026: What Employers Must Know About the New Employment Pass Salary Requirements
Malaysia’s expatriate employment landscape is undergoing significant reform in 2026. Employers hiring foreign professionals must prepare for new Employment Pass (EP) salary thresholds and compliance requirements announced by the Ministry of Home Affairs Malaysia (MOHA) following Cabinet approval effective 1 June 2026.
Following the announcement, the details of the policy have been made available through official government platforms, including media releases by the Malaysian Investment Development Authority (MIDA) and updates published on the portal of the Immigration Department of Malaysia, including its Expatriate Services Division (ESD).
If your company hires expatriates — or plans to in 2026 — this update directly impacts your HR planning, payroll structure, and approval timelines.
Following the announcement, the details of the policy have been made available through official government platforms, including media releases by the Malaysian Investment Development Authority (MIDA) and updates published on the portal of the Immigration Department of Malaysia, including its Expatriate Services Division (ESD).
If your company hires expatriates — or plans to in 2026 — this update directly impacts your HR planning, payroll structure, and approval timelines.
Official Government Announcement on the 2026 Policy Changes
According to the official MIDA media release:
New minimum salary thresholds for Employment Pass categories will be implemented effective 1 June 2026.
Employers must ensure compliance with the revised salary framework when submitting new or renewal applications.
Read the official MIDA announcement here:
🔗 https://www.mida.gov.my/media-release/announcement-implementation-of-new-expatriate-employment-policy/
In addition, the Immigration Department’s ESD portal confirms that MYXpats Centre is conducting official briefing sessions (Announcement 268) to guide employers on the revised Employment Pass salary policy and its implementation procedures.
🔗 https://esd.imi.gov.my/portal/latest-news/announcement/announcement-268/
This demonstrates that enforcement preparation has already begun — employers should not delay internal review.
According to the official MIDA media release:
New minimum salary thresholds for Employment Pass categories will be implemented effective 1 June 2026.
Employers must ensure compliance with the revised salary framework when submitting new or renewal applications.
Read the official MIDA announcement here:
🔗 https://www.mida.gov.my/media-release/announcement-implementation-of-new-expatriate-employment-policy/
In addition, the Immigration Department’s ESD portal confirms that MYXpats Centre is conducting official briefing sessions (Announcement 268) to guide employers on the revised Employment Pass salary policy and its implementation procedures.
🔗 https://esd.imi.gov.my/portal/latest-news/announcement/announcement-268/
This demonstrates that enforcement preparation has already begun — employers should not delay internal review.
What Is Changing Under the 2026 Expatriate Policy?
While detailed salary figures are category-based, the reform generally focuses on:
1️. Revised Minimum Salary Thresholds
Updated EP salary bands aligned with category tiers.
While detailed salary figures are category-based, the reform generally focuses on:
1️. Revised Minimum Salary Thresholds
Updated EP salary bands aligned with category tiers.
| EP Category | Revised Policy |
| Category I | Minimum salary increased to RM20,000, with a tenure limit of 10 years. |
| Category II | Minimum salary increased to RM10,000 – RM19,999, with a tenure limit of 10 years (requires replacement plan). |
| Category III | Minimum salary increased to RM5,000 – RM9,999 (or RM7,000 – RM9,999 for specific manufacturing sectors), with a tenure limit of 5 years (requires replacement plan). |
| Dependents: Expatriates in all three categories are permitted to bring dependents. | |
2️. Structured Employment Duration
Clearer framework on contract length and renewal eligibility.
3️. Stronger Compliance Monitoring
Greater emphasis on:
- Justification for expatriate hiring
- Alignment with national talent strategies
- Regulatory documentation accuracy
Why This Matters for Malaysian Employers
If your business employs expatriates in sectors such as:
If your business employs expatriates in sectors such as:
- Manufacturing
- Technology
- Engineering
- Oil & Gas
- Professional Services
You must reassess:
✔ Employment contracts
✔ Payroll structures
✔ Budget forecasting
✔ HR compliance documentation
✔ Immigration application timelines
Failure to align with new requirements may result in application rejection, delays, or non-compliance risks.
✔ Employment contracts
✔ Payroll structures
✔ Budget forecasting
✔ HR compliance documentation
✔ Immigration application timelines
Failure to align with new requirements may result in application rejection, delays, or non-compliance risks.
Compliance Risks Businesses Must Avoid in 2026
Many companies underestimate how immigration policy changes affect payroll and HR administration.
Common risks include:
Many companies underestimate how immigration policy changes affect payroll and HR administration.
Common risks include:
- Offering salary packages below the new minimum threshold
- Incorrect categorization of Employment Pass tier
- Misalignment between payroll records and EP application submissions
- Poor documentation during renewal
With 2026 reforms, authorities are expected to apply stricter validation controls.
How Businesses Can Prepare Now
To stay ahead of the 2026 changes, employers should:
✔ Conduct a Salary Audit
Review current expatriate salaries against upcoming policy benchmarks.
✔ Review Employment Contracts
Ensure contract terms reflect updated duration and compliance standards.
✔ Align Payroll & Immigration Records
Salary declarations must match statutory filings.
✔ Seek Professional Advisory
Immigration compliance now overlaps strongly with HR advisory and payroll structuring.
To stay ahead of the 2026 changes, employers should:
✔ Conduct a Salary Audit
Review current expatriate salaries against upcoming policy benchmarks.
✔ Review Employment Contracts
Ensure contract terms reflect updated duration and compliance standards.
✔ Align Payroll & Immigration Records
Salary declarations must match statutory filings.
✔ Seek Professional Advisory
Immigration compliance now overlaps strongly with HR advisory and payroll structuring.
Frequently Asked Questions (FAQ)
Q1: When will the new expatriate employment policy take effect?
The revised Employment Pass salary policy will take effect on 1 June 2026, as announced by MIDA.
Q2: Will existing expatriates be affected?
Renewals and new applications submitted after the effective date are expected to follow the revised salary framework. Employers should review renewal timelines early.
Q3: Do SMEs need to comply?
Yes. The policy applies to all employers hiring expatriates, regardless of company size.
Q4: What happens if salary does not meet the new threshold?
Applications may be rejected or delayed. Employers may be required to adjust salary packages before approval.
Q5: Should companies attend the MYXpats briefing?
Yes. The ESD briefing sessions provide official clarification and reduce compliance risk.
Q1: When will the new expatriate employment policy take effect?
The revised Employment Pass salary policy will take effect on 1 June 2026, as announced by MIDA.
Q2: Will existing expatriates be affected?
Renewals and new applications submitted after the effective date are expected to follow the revised salary framework. Employers should review renewal timelines early.
Q3: Do SMEs need to comply?
Yes. The policy applies to all employers hiring expatriates, regardless of company size.
Q4: What happens if salary does not meet the new threshold?
Applications may be rejected or delayed. Employers may be required to adjust salary packages before approval.
Q5: Should companies attend the MYXpats briefing?
Yes. The ESD briefing sessions provide official clarification and reduce compliance risk.
Strategic Insight for 2026 Workforce Planning
The 2026 expatriate reform signals a broader trend:
Malaysia is tightening regulatory standards while strengthening governance around foreign talent employment.
For businesses, this means:
The 2026 expatriate reform signals a broader trend:
Malaysia is tightening regulatory standards while strengthening governance around foreign talent employment.
For businesses, this means:
- Greater HR documentation discipline
- More structured payroll planning
- Integrated immigration & HR advisory approach
Companies that prepare early will avoid disruption.
Need Help Reviewing Your Expatriate Payroll & HR Compliance?
Alena Consultancy & Services supports Malaysian businesses with:
✔ HR Advisory & Compliance Review
✔ Payroll Structuring
✔ Employment Contract Drafting
✔ Immigration Payroll Alignment
✔ Workforce Planning Strategy
📍 Serving businesses nationwide: Penang | Perak | Kuala Lumpur | Selangor | Johor
📩 Email: hello@alena.com.my
Alena Consultancy & Services supports Malaysian businesses with:
✔ HR Advisory & Compliance Review
✔ Payroll Structuring
✔ Employment Contract Drafting
✔ Immigration Payroll Alignment
✔ Workforce Planning Strategy
📍 Serving businesses nationwide: Penang | Perak | Kuala Lumpur | Selangor | Johor
📩 Email: hello@alena.com.my
Editorial Note
This article was prepared by the Alena Marketing & Compliance Department this article aims to provide Malaysian employers with structured guidance on the 2026 expatriate employment reforms based on official announcements from MIDA and the Immigration Department of Malaysia.
This article was prepared by the Alena Marketing & Compliance Department this article aims to provide Malaysian employers with structured guidance on the 2026 expatriate employment reforms based on official announcements from MIDA and the Immigration Department of Malaysia.
Feb 20,2026