Malaysia (MY)
Multicultural, English-friendly Malaysia offers affordable living, world-class street food, tropical lifestyle, and a well-developed expat infrastructure in Kuala Lumpur and Penang.
2026 Annual Changes — Malaysia
Updated thresholds, benefits, and regulatory changes effective this year.
Malaysia's 2026 policy landscape is shaped by the Madani Economy framework (PM Anwar Ibrahim's 2023 reform agenda), continued RON95 petrol subsidy rationalisation (foreigners excluded from subsidised rate since 2024), phased e-Invoice mandates for businesses, and the full operational status of Malaysia's digital banks (GX Bank, Boost Bank, AEON Bank). Employment Pass regulations were not significantly revised in 2025–2026. EPF contribution rates and structure remain stable (with the Akaun Fleksibel Account 3 introduced May 2024 now fully established). Minimum wage RM1,700/month is stable since February 2023 — a review is expected in 2026. Income tax brackets and reliefs are stable from 2024. Malaysia's Budget 2026 focused on fiscal consolidation and targeted subsidy rationalisation.
Key Changes for 2026
| Category | 2026 Value | Previous | Effective Date |
|---|---|---|---|
| Minimum Wage No change — minimum wage remains RM1,700/month nationwide. A National Wages Consultative Council review is expected in H2 2026 — potential adjustment to RM1,800–2,000/month range. Confirm via JTK (Labour Department) when effective. | RM1,700/month (RM9.81/hour) — unchanged since February 2023 | RM1,500/month (pre-February 2023) | 1 February 2023 (unchanged through 2026) |
| EPF Contribution Rates No change to standard contribution rates. EPF Account 3 (Akaun Fleksibel) fully established — 10% of employee contribution goes to Account 3 for flexible withdrawal. Account 1: 75% of total contribution. Account 2: 25% but reduced allocation from pre-2024. EPF dividend for 2025 announced February 2026. | Employee: 11%. Employer: 12% (salary above RM5,000) or 13% (salary RM5,000 and below). EPF dividend 2025 (announced 28 February 2026): 6.15% for both Simpanan Konvensional and Simpanan Shariah. Total payout: RM79.6 billion. Credited to accounts 1 March 2026. | Same rates — no change. 2024 dividend: 6.30% (conventional and Shariah) — exceptional year | Ongoing — Account 3 introduced May 2024 |
| RON95 Petrol Price (Foreigners) Foreigners excluded from RON95 subsidy price — pay market-linked price. RON95 subsidy rationalisation began mid-2024 with foreign car registration-linked pricing via RFID/Touch 'n Go card linked to vehicle MyKad/EP status. Malaysian-registered vehicles owned by Malaysians continue to receive subsidised RON95 at RM2.05/litre. Foreigners pay market price. | Market-rate RON95 for foreigners: approximately RM3.50–4.00/litre (varies with global oil price). RON97: RM3.93–4.50/litre (full market rate, no subsidy). Diesel: market rate for foreign vehicles. | Universal subsidised RON95 at RM2.05/litre until mid-2024 | Mid-2024 for most categories; enforcement tightened through 2025–2026 |
| e-Invoice (Invois-e) Mandate LHDN e-Invoice (Invois-e) mandate phased rollout: taxpayers with annual revenue above RM100 million: mandatory from August 2024. RM25–100 million: mandatory from January 2025. All other taxpayers (including all remaining businesses): mandatory from July 2025. By 2026: e-Invoice is standard for all business-to-business transactions in Malaysia. Issued via LHDN's MyInvois portal or approved service providers. | All businesses must issue e-Invoices via LHDN MyInvois system. Affects: Sdn Bhd companies, sole traders (ROB), partnerships, and any business earning income in Malaysia. | Optional/pilot for most businesses until 2024 | Phased from August 2024; all businesses by July 2025 |
| Income Tax Rates and Reliefs No change to income tax brackets or rates for 2026. Main reliefs stable: personal relief RM9,000, spouse RM4,000, child RM2,000–8,000, EPF RM4,000, life insurance RM3,000, medical expenses RM8,000, education fees RM7,000, PRS RM3,000. Foreign-source income remittance: taxable from 2022 for residents (except excluded sources and de minimis RM100,000 threshold for certain individuals — check LHDN updates). | Resident rates: 0% to 30%. Top rate 30% applies to income above RM2,000,000. Non-residents: flat 30% on Malaysia-sourced income. | Same — no rate change since 2023 budget | Year of Assessment 2026 (filed by April 30, 2027) |
| Digital Banks (Licensed) GX Bank, Boost Bank, and AEON Bank received full digital banking licences from Bank Negara Malaysia in 2023 and are fully operational through 2026. These offer accounts openable via app (no branch), competitive savings rates, and DuitNow. GX Bank (Grab-backed) and Boost Bank (Axiata-RHB backed) have largest user bases. All three are insured by PIDM (Malaysia Deposit Insurance Corporation) up to RM250,000 per depositor. | GX Savings Account: up to 3% p.a. interest (promotional rates). Boost Bank: competitive rates. AEON Bank: Shariah-compliant digital banking. | Digital banks not operational until 2023 | Fully operational 2024 onwards |
| Employment Pass (EP) Categories No major structural change to EP categories in 2025–2026. EP Category I (RM10,000+/month, 5-year validity), Category II (RM5,000–9,999/month, 2-year), Category III (RM3,000–4,999/month, 1-year) stable. RP-T (Resident Pass-Talent) at RM15,000+/month remains available as a 10-year pass alternative. DE Rantau digital nomad pass (USD24,000/year): renewed from initial 2022 launch, standard 12-month validity with 12-month renewal. LTSVP (Long-Term Social Visit Pass) for dependants of EP holders. | EP income thresholds: Cat I RM10,000+, Cat II RM5,000–9,999, Cat III RM3,000–4,999. RP-T: RM15,000+. DE Rantau: USD24,000/year remote income. | Same — EP structure unchanged since 2021 reform | Current EP structure from 2021; no 2026 changes announced |
| MM2H (Malaysia My Second Home) Programme No further changes to the revised 2023 MM2H requirements — programme remains strict compared to pre-2021 rules. Fixed Deposit requirement: RM1,000,000 (or RM500,000 for Labuan MM2H). Monthly offshore income: RM40,000/month. Annual pass renewable. Applications via MM2H Centre (Tourism Malaysia). | FD: RM1,000,000. Monthly income: RM40,000+. Pass validity: 5 years (renewable). Minimum age: 35. No property purchase requirement at RM600,000+ (for MM2H holders below the 2021 requirement). | Pre-2021 MM2H: RM300,000 FD, RM10,000/month income — significantly less restrictive | Revised requirements from October 2021, further adjustments 2023 |
| SST (Sales and Service Tax) Rates Service Tax rate increased from 6% to 8% for most services effective March 1, 2024. Exceptions maintained at 6%: food & beverage, logistics services, and telcos. No further rate changes in 2025–2026. No GST reintroduction — GST was abolished in 2018. | Service Tax: 8% (most services), 6% (F&B, logistics, telco, and rental/leasing services from 1 January 2026), 5.5% (financial services). Sales Tax: 10% (taxable goods), 5% (selected goods). No GST. | Service Tax 6% until February 2024; rental/leasing services were at 8% until 31 December 2025 | Service Tax 8% from 1 March 2024; rental/leasing reduced to 6% from 1 January 2026 |
| National Registration and MyKad JPN (National Registration Department) continuing digital MyKad enhancements. eKYC (electronic Know Your Customer) now used for bank account opening, SIM card registration, and some government services. No change to the requirement for foreigners to present passport + EP for identification purposes. | eKYC via face recognition + document scan now standard for digital bank onboarding and telco SIM registration. Physical EP card carries digital chip with visa information. | eKYC phased in from 2020 (COVID period) | Ongoing — eKYC standard from 2022 |
January Checklist
Actions to take each January when new rates take effect.
- 1
Review EPF contribution slips from January payroll — confirm correct deduction percentages (11% employee, 12–13% employer)
- 2
Check EPF i-Akaun for annual dividend announcement (announced February for prior year — check kwsp.gov.my in February)
- 3
File personal income tax return — Year of Assessment 2025 deadline April 30, 2026 (Form BE for employment income) at hasil.gov.my
- 4
Renew motor insurance if due — check NCD status and compare quotes at PolicyStreet.my or MyCar.my before renewing
- 5
Renew road tax (cukai jalan) if vehicle registration due — via JPJ counter, Pos Malaysia, or MyEG online
- 6
Review Touch 'n Go eWallet balance and RFID auto-top-up settings — ensure sufficient balance for toll usage
- 7
Check RON95 petrol price for your vehicle registration status — foreigners on market rate, verify current pump price
- 8
Confirm EP expiry date and initiate renewal process with employer HR 3 months before expiry
- 9
Review private medical insurance annual renewal terms — check for premium increases and coverage changes
- 10
Update EPF beneficiary nominations if you have had a family change (new child, marriage, divorce) — via i-Akaun
- 11
Check LHDN MyTax account for any outstanding tax assessments or correspondence
- 12
Review Malaysian bank account standing instructions and autopay mandates for the new year
Where to Track Annual Changes
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Bank Negara Malaysia (BNM) — bnm.gov.my: monetary policy, banking regulations, FX rates, licensed institutions list
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Inland Revenue Board (LHDN) — hasil.gov.my: income tax changes, e-Invoice updates, tax reliefs, filing deadlines
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EPF (KWSP) — kwsp.gov.my: contribution rates, dividend announcements (typically February), withdrawal rules
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SOCSO / PERKESO — perkeso.gov.my: contribution rates, benefit changes, new schemes
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Immigration Department Malaysia (IMI) — imi.gov.my: EP/DP/RP-T requirements, processing updates
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Jabatan Tenaga Kerja (JTK / Labour Department) — jtk.gov.my: minimum wage, Employment Act updates
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Securities Commission Malaysia (SC) — sc.com.my: investment regulations, PRS provider list, investor alerts
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Ministry of Domestic Trade (KPDN) — kpdn.gov.my: petrol price updates, consumer price controls
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The Edge Malaysia / The Star — thestar.com.my: leading English financial and business news covering policy changes
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Expatriate Group Malaysia (expat.com.my): community-reported changes in EP processing and cost of living
Malaysia's policy environment is relatively stable for expats — major changes in EP rules, tax rates, and EPF are infrequent and well-publicised. The most impactful recent change for expats is the foreign-source income remittance tax (from 2022) — consult an LHDN-registered tax agent if you receive overseas income while residing in Malaysia. Join Malaysian expat communities (Expat.com, r/expatsinmalaysia, InterNations KL) where policy changes are quickly discussed and clarified. Talent Corporation Malaysia (talentcorp.com.my) provides official guidance for high-skilled foreign workers on regulatory changes.
Annual Changes
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