KUALA LUMPUR, Oct 18 — Putrajaya today announced its plan to raise the country’s minimum wage from RM1,500 to RM1,700 effective next year, arguably the biggest change affecting local employers and businesses in Budget 2025.

This means an employee’s minimum wage threshold will be raised beginning February 1, 2025.

For businesses employing fewer than five workers, a six-month moratorium will be imposed, with the new minimum wage policy taking effect on August 1, 2025 instead.

Here are other major takeaways in Budget 2025 affecting Malaysian employers and businesses.

Labour

• Levy mechanism to be implemented beginning early 2025 to reduce reliance on foreign workers.
• Publication of starting salary guidelines for all sectors.
• Employers employing disabled persons and former convicts to be given RM600 monthly incentives.

Tax incentives

• A 50 per cent additional tax cut for 12 months of paid wages to employers who employ women who return to the workforce.
• A 50 per cent additional tax cut on capacity development and software acquisition expenditure borne by employers in implementing flexible working arrangements.
• A 50 per cent additional tax cut for employees’ additional paid welfare leave up to 12 months.

Tax

• Sales tax will be imposed on non-essential goods such as premium imported products like salmon and avocado beginning May 1, 2025.