Budget 2027 Malaysia: Minimum Wage RM2,000 & Tax Relief

Budget 2027 was tabled in Parliament on 9 October 2026. This page summarises the announcements that affect salaries, income tax, EPF and SOCSO, based on reports from NST, SAYS and Bernama. These are announcements, not yet law, and some details such as the Year of Assessment for the tax changes were not stated, so check the official Budget documents and LHDN before relying on them.

Minimum wage: RM1,700 to RM2,000

The minimum wage rises from RM1,700 to RM2,000 a month from June 2027, with micro, small and medium enterprises that have annual sales below RM50 million reported as exempt. A separate RM2,500 baseline for semi-skilled workers and graduates was also announced, with no date. Until a new rate is gazetted, RM1,700 remains the legal minimum.

Income tax: higher individual relief and lower rates

The basic individual relief rises from RM9,000 to RM12,000, the first increase since 2010. The rate for the RM70,001 to RM100,000 band falls by one percentage point to 18%, and the rate for the RM100,001 to RM150,000 band falls by one point to 24%. Reliefs were also widened for postnatal care, care of parents and grandparents, children's tuition fees, education in all fields, sports shoes, AI software subscriptions, vaccinations and pet adoption fees from registered shelters, plus extra relief for self-employment social security contributions. The reports did not state the Year of Assessment these apply from.

What the tax change could save you

The table compares tax today with tax under a RM12,000 individual relief and the lower 18% and 24% rates, for the same income. It is an illustration based on the reported figures, not an official LHDN calculation. Someone in the 6% band saves about RM180 a year from the higher relief alone, and higher bands save more.

EPF and SOCSO

Every Malaysian citizen will be registered as an EPF member at age 18, although the reports did not confirm automatic contributions or a date. EPF members aged 55 and 60 can choose the i-Emas monthly withdrawal scheme, and members under 55 can pay MediAsas premiums from their Akaun Sejahtera. For e-hailing and p-hailing gig workers, EPF contributions of up to RM600 a year (RM6,000 over a lifetime) were announced, along with government SOCSO matching of 35%, rising to 50% if the platform also contributes. Self-employed people in 17 sectors where SOCSO is not mandatory get a 70% matching incentive. No change to the EPF, SOCSO or EIS contribution rates for employees was reported.

Cash aid and other measures

The allocation for STR and SARA is RM16 billion, with STR recipients getting up to RM150 a month in SARA (RM1,800 a year). Adults aged 18 and above who do not receive STR get RM100 twice, before Aidilfitri and before Merdeka. First-time homebuyers get a full stamp duty exemption on homes up to RM500,000 and a partial exemption up to RM750,000 for agreements signed between 1 January 2027 and 31 December 2030. The minimum pension rises from RM1,000 to RM1,350 a month.

What this means for the calculators on this site

Our calculators use the rates in force today. We will update the minimum wage, the individual relief and the tax bands once the effective dates are confirmed and the changes are gazetted, so your take-home estimate stays correct for the year you are looking at. Sources: NST, SAYS and Bernama reports on the Budget 2027 speech, 9 October 2026.