First and foremost, you should aware that RM1,200 minimum wage has been gazetted and it payable to an employee who works within the 16 city councils and 40 municipal councils will be RM5.77 an hour or RM1,200 monthly from 1st Feb 2020. Click here for the news.
So, what should you know to calculate overtime pay in Malaysia?
- Normal working hour is 48 hours per week or 8 hours per day. So, you need pay the employee at overtime rate when they work more than normal working hours according to the employment contract.
- Overtime rate for normal day , rest day & public holiday is as below.
For example: RM5.77 per hour x 1.5 = RM8.66 per hour (working overtime on normal day)
Working Overtime On
However, mistakes are made when calculating overtime pay for monthly wage contract. Take note when you calculate overtime pay if employee work on rest day and public holiday.
For rest day, you should pay employee at normal rate for the first 8 working hours. If they work more than 8 hours on rest day , you need to pay them at rate 2.0 x for the balance overtime working hours.
Case 1: Employee work 10 hours on rest day.
RM1200 per month ÷ 26 days + RM5.77 per hour X 2 = RM57.69 per day
For holiday, you should pay employee at rate 2.0 X for the first 8 working hours. If they work more than 8 hours on public holiday, you need to pay them at rate 3.0 x for the balance overtime working hours.
Case 2: Employee work 10 hours on public holiday.
(RM1200 per month ÷ 26 days) x 2 + RM5.77 per hour X 3 = RM109.61 per day
Last but not least, remember to brief your employee when they sign the employment contract to prevent unpleasant argument.
If you need assist on payroll, please feel free to contact us by clicking here.