Daily rate of pay in Malaysia: 26 days or the days in the month?
Checked by Gabriela Ruiz, financial analyst, against the official sources
Malaysia uses both, for different things. The Employment Act 1955 sets the ordinary rate of pay of a monthly-rated employee as the monthly rate of pay divided by 26, and that daily rate is what leave pay, overtime and other daily payments are built on. On RM3,000 a month it is RM 115.38.
Pay for a month you did not work in full is different. Since 1 January 2023, section 18A divides the monthly wage by the number of days in that wage period and multiplies by the days you are eligible for. It applies when you join after the 1st, leave before the month ends, take unpaid leave or go on national service.
Daily rate, hourly rate and part-month pay
Employment Act 1955: section 60I for the ordinary and hourly rate of pay, section 18A for a month not worked in full. The section 18A formula divides the monthly wage by the number of days in the wage period, which for a calendar-month wage period is the number of days in that month. For the ordinary rate of pay, an employer may use another formula only if it gives a rate no lower than monthly wage / 26. Not legal advice.
Ordinary rate of pay and hourly rate
Section 60I: for a monthly rate of pay, the ordinary rate of pay is the monthly rate / 26; for a weekly rate, the weekly rate / 6. For daily-rated, hourly-rated and piece-rated employees it is the total wages of the previous wage period divided by the days actually worked. The hourly rate of pay is the ordinary rate of pay divided by your normal hours of work for one day.
An employer may use a different method only if it does not give a lower rate than these. JTKSM's FAQ works through a six-day, 45-hour week of 7.5 hours a day, where the hourly rate is the ordinary rate divided by 7.5; the table shows both 8 and 7.5 hours.
| Monthly wage | Daily rate | Hourly, 8-hour day | Hourly, 7.5-hour day |
|---|---|---|---|
| RM2,000 | RM 76.92 | RM 9.62 | RM 10.26 |
| RM3,000 | RM 115.38 | RM 14.42 | RM 15.38 |
| RM4,000 | RM 153.85 | RM 19.23 | RM 20.51 |
| RM5,000 | RM 192.31 | RM 24.04 | RM 25.64 |
| RM8,000 | RM 307.69 | RM 38.46 | RM 41.03 |
Pay for part of a month: joining, leaving and unpaid leave
Section 18A: monthly wages / number of days in the wage period x number of days eligible. Joining on the 16th of a 30-day month on RM3,000 gives 15 eligible days and RM 1,500.00. Leaving after the first 14 days of February 2026 (28 days) gives RM 1,500.00.
Unpaid leave works the same way. Two days of unpaid leave in March (31 days) on RM3,100 cuts the month's pay by RM 200.00. Using the ordinary rate of pay instead (2 x RM3,100 / 26) would have taken RM 238.46, which is why the divisor matters on a payslip.
Which rate applies to what
Annual leave, sick leave, maternity allowance and paternity leave are all paid at the ordinary rate of pay. Overtime is based on the hourly rate: see the overtime calculator. Untaken annual leave paid out when a contract ends also uses the ordinary rate: see annual leave in Malaysia. Unpaid leave of more than 30 days in total in 12 months is not counted as service for annual leave.
| Payment | Rate used | Section |
|---|---|---|
| Annual leave pay and untaken leave on termination | Ordinary rate of pay | 60E |
| Sick leave | Ordinary rate of pay | 60F |
| Maternity allowance | Ordinary rate of pay (or the prescribed rate, if higher) | 37 |
| Paternity leave | Ordinary rate of pay | 60FA |
| Overtime | Hourly rate of pay | 60A |
| Part month (joining, leaving, unpaid leave) | Monthly wage / days in the wage period | 18A |
What counts as wages
Wages for these rules means basic wages and other cash payments for work done under the contract. It excludes housing or food provided, the employer's own contributions to EPF or other funds, travelling allowances, payments to cover special expenses of the job, gratuities on discharge or retirement, and annual bonuses.
See your take-home pay after EPF, SOCSO and PCB with the salary calculator.
Sources
Questions
Is salary calculated on 26 days or 30 days in Malaysia?
The daily rate for leave, overtime and other daily payments is monthly wage / 26. Pay for a month not worked in full is monthly wage / the number of days in that month x the days you are eligible for, under section 18A.
How do I calculate my daily rate of pay?
Divide your monthly rate of pay by 26. On RM3,000 that is RM 115.38 a day.
How is unpaid leave deducted from salary in Malaysia?
Under section 18A: monthly wage / days in that month x days not on unpaid leave. Two days of unpaid leave in a 31-day month on RM3,100 reduce pay by RM 200.00.
How is a prorated salary calculated for the first month?
Monthly wage / days in that month x days from your start date to the month end. Starting on the 16th of a 30-day month on RM3,000 gives RM 1,500.00.
How do I calculate my hourly rate of pay?
Divide the ordinary rate of pay (monthly wage / 26) by your normal hours of work in a day. On RM3,000 and 8 hours that is RM 14.42 an hour.
Does the daily rate include allowances?
It is based on wages: basic pay and other cash payments for work done. Travelling allowances, special-expense payments, gratuities, annual bonuses and the employer's EPF contributions are excluded.