What does the change mean? Effective Sept. 1, the salary requirement for foreign nationals seeking Category 1 employment passes will double to 10,000 ringgits (about US$2,250) per month. Category II pass holders will have to be paid between 5,000 and 9,999 ringgits per month. Category III pass holders will have a salary requirement of 3,000 to 4,999 ringgits per month. Contract requirements will also change so that Category I permit holders will be allowed to apply for passes valid for up to five years. Category II permit holder will have to have a contract valid for up to two years.
- Implementation time frame: Sept. 1.
- Visas/permits affected: Employment Passes (categories I, II and III)
- Who is affected: Employers submitting employment pass applications.
- Impact on processing times: No impact expected.
- Business impact: Employers may see increased costs to meet the new salary requirements.
Background: Malaysia’s MYXpats Centre announced Saturday that the following changes would be made to the Work Pass Program beginning Sept. 1:
Employment Pass Type | Salary Requirement | Requirement from Sept. 1 | Contract Requirement | Requirement from Sept. 1 |
Category I (Expatriate) | RM 5,000 | RM 10,0000 | Minimum of two years | Up to five years |
Category II (Expatriate) | RM 5,000 | RM 5,000 – RM 9,999 | Less than two years | Up to two years |
Category III (Knowledge/ Skill Workers) |
RM 25,00 – 4,999 | RM 3,000 – 4,999 | Up to a year (renewable twice) | Up to a year (renewable twice) |
Companies that operate within a regulated sector must obtain an approval letter or support letter form the appropriate approving agencies or regulatory bodies. Final decision-making authority on employment pass applications rests with the Immigration Department of Malaysia.
BAL Analysis: The changes to the salary requirements for employment pass holders are fairly significant, especially in Category 1, where the salary will double to 10,000 ringgits per month. Employers should take note of the pending changes and budget accordingly.
This alert has been provided by the BAL Global Practice group and our network provider located in Malaysia. For additional information, please contact your BAL attorney.
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I am in Malaysia since October 2018. The information I got from my HR is not crystal clear (because he is not really into HR, she is doing this job as HR and mostly he seeks helps from his friends)
I am aware of the tax an expat needs to pay for the first 6 month (some 21%), but my company is paying that for me, only 7% is deducted from my salary - there is an statement in the agreement saying, I need to pay this amount of 21% if I leave the company before completing first six months. And recently I have filled the tax filing and the form indicates that I paid excess tax and I can get them back. My questions
(1) Can a company pay the 21% tax for an expat (because some of my friends in other companies seems paying this amount from themselves)?
(2) Since I joined in Oct 2018, I did not complete 6 month in an year cycle - so does the 21% has to be paid again until June this year?
(3) If I want to resign my job now, do I need to wait until June 2019 (6 months of the year) or April 2019 (6 months since I joined) to not pay the amount as per the company agreement?
(4) Will I really get the tax money back, that was paid excess?
(5) I was given a "Permanent" role, not contract basis as my company give the insurance, spouse visa and insurance for my spouse as well and I am a Category 2 expat - does this mean, I can't work after two years in Malaysia (according to this)?