Annual Leave and Public Holidays in Malaysia

Legal framework

Employment Act 1955 (Act 382)

The cornerstone legislation governing employment relationships in Malaysia, Section 60E specifically addresses annual leave entitlements, establishing minimum standards based on years of service. Section 60D addresses public holidays, establishing statutory rights to paid leave and premium pay for work performed on public holidays. The Employment Act applies to employees earning RM2,000 or less monthly (or engaging in manual labour regardless of salary).

Contributing Advisor

Marco Förster

Director, Operations

Holidays Act 1951 (Act 369)

Governs public holidays nationally in Peninsular Malaysia and Labuan, establishing:

• Federal (nationwide) public holidays.
• Provisions for state-specific holiday declarations.
• Rules for holiday substitution when holidays fall on weekends.
• Authority to declare ad hoc public holidays for special occasions.

Sabah and Sarawak operate under separate legislation (Holidays Ordinance Cap. 56 for Sabah; Public Holidays Ordinance Cap. 8 for Sarawak).

While the Employment Act establishes minimum statutory entitlements, employers commonly provide more generous provisions through employment contracts or company policies, creating a layered compliance framework where statutory minimums represent floor, not ceiling.

Who is covered

EA employees are those earning RM 2,000 or less monthly OR earning above RM2,000 but engaged in manual labour. This category includes:

• Production line workers, factory operatives.
• Manual laborers in construction, agriculture, hospitality.
• Domestic workers.
• Vehicle/equipment operators.
• Supervisors of manual workers.

EA employees receive statutory minimum leave entitlements under Employment Act provisions and cannot contractually waive these rights.

Non-Employment Act (Non-EA) employees

Non-EA employees are those earning above RM 2,000 monthly not engaged in manual labour. This category includes:

• Office staff, administrative professionals.
• Managers, executives.
• Technical specialists (engineers, architects, software developers).
• Sales professionals.
• Professionals (accountants, lawyers, consultants).

Non-EA employees' leave entitlements are negotiated individually through employment contracts; employers retain greater discretion in setting leave terms, though market norms typically establish 12+ days annual leave minimum.

While both EA and non-EA employees are entitled to statutory public holidays, EA employees receive more prescriptive statutory protection for annual leave calculations, while non-EA employees depend on contractual terms, creating need for careful employment contract drafting to avoid disputes.

Minimum annual leave entitlement (based on years of service)

Malaysia's annual leave structure ties entitlements directly to length of service with the same employer, reflecting policy intent to reward loyalty while ensuring even new employees receive meaningful rest periods:

Calculation formula for prorated annual leave

Prorated Leave Formula:

Prorated Annual Leave = (Number of Days Worked / 365 Days) × Annual Leave Entitlement

Alternatively, using completed months:

Prorated Annual Leave = (Number of Completed Months / 12 Months) × Annual Leave Entitlement

Under Malaysian employment law, fractions of a day less than 0.5 are disregarded (rounded down); fractions 0.5 or greater are rounded up to the next full day. This rounding ensures fairness in prorated calculations.

Public holidays in Malaysia

Malaysia observes a mix of federal, state-specific, and religious public holidays, creating a layered holiday structure requiring careful compliance management. Unlike some jurisdictions with fixed public holiday calendars, Malaysia's system reflects religious observances (Islamic calendar-based dates shift annually) and state-specific cultural celebrations.

Total Statutory Public Holidays 2026: Minimum 11 federal holidays plus 3–5 state-specific holidays per state, creating 14–16 total holidays annually depending on state.

Federal public holidays (Nationwide)

When public holidays fall on weekends or established rest days, Malaysian law mandates employees still receive equivalent rest benefits. Employers cannot simply "skip" the holiday because it coincides with weekend. Designate next available working day as the replacement holiday (typically Monday if holiday falls on Sunday, or relevant replacement day).

Section 60D of the Employment Act 1955 establishes statutory premium pay requirements for work performed on public holidays, distinguishing rates for regular hours vs overtime.

Employees must be significantly compensated for foregoing public holiday rest, reflecting the disruption to work-life balance.

• Regular hours worked: Minimum 3 times ordinary hourly rate of pay (not 2× as commonly misconstrued)
• Overtime hours worked: Additional 3 times hourly rate for hours exceeding normal daily work hours

For monthly-salaried employees earning above RM 2,000, the Employment Act may not apply; terms depend on employment contract unless explicitly covered.

Sick leave and hospitalisation leave

Medical certification requirements:

• Self-certification: 0–2 consecutive sick days (employee attestation only).
• Employer request: Medical certificate for 3+ consecutive days or pattern of absences.
• Cost responsibility: Employer typically bears medical certificate cost for first certificate of the year.

Additional hospitalization leave: Up to 60 days per calendar year if employee hospitalized or receiving treatment, in addition to regular sick leave.

Maternity leave

Maternity leave entitlement increased from 60 days to 98 consecutive days effective January 2024, representing Malaysia's most significant recent leave expansion.

Eligibility criteria:

• At least 90 days of employment within the 9 months preceding expected confinement.
• Employment relationship continuing up to 4 months immediately before confinement.
• Fewer than 5 surviving children at time of confinement (historical limitation increasingly revisited).

Maternity leave can commence as early as 30 days before expected delivery date or extend beyond delivery day; employee flexibility maximized. Maternity allowance is paid at ordinary rate of pay for entire 98-day period (not unpaid leave). Employees experiencing miscarriage after 22+ weeks gestation receive maternity leave and allowance equivalent to ongoing pregnancy.

Progressive employers offer return-to-work phased arrangements, remote work flexibility, or breastfeeding break accommodations (unpaid or paid depending on policy).

Paternity leave

7 consecutive days of paid paternity leave for married male employees upon birth of child (up to maximum 5 children).

Eligibility requirements:

• Marriage to child's mother.
• Minimum 12 months employment with same employer.
• 30+ days’ notice of expected birth date to employer.
• Married status (not recognized for unmarried partnerships, reflecting conservative Malaysian policy).

Some employers supplement statutory 7 days with additional unpaid paternity leave (3–5 days commonly offered).

Marriage, compassionate, and emergency leave

Public holidays and leave policies for non-Malaysian employees

Foreign employees holding valid work permits or employment passes are entitled to statutory public holidays equal to Malaysian citizens, per Employment Act provisions. All employees (Malaysian and foreign) working in Malaysia receive minimum 11 public holidays annually at ordinary rate of pay, regardless of nationality.