News & Views


Posted on 13th April 2020

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In order to combat the economic impact of the COVID-19 pandemic and the enforcement of the movement control order in Malaysia (which has been in force since 18 March 2020), the Prime Minister of Malaysia announced on 6 April 2020, a further economic stimulus package of RM10 billion in addition to the financial package announced earlier, bringing the total financial stimulus for the country to RM260 billion (US$60 billion). 

The following are some of the measures included in the last stimulus package most relevant to Malaysian employers:

1.         Wage Subsidy

1.1   In order to qualify for the wage subsidy, the applicant must (a) be a small or medium enterprise company/firm, registered with the Social Security Organisation of Malaysia, and (b) have been established and in operation in Malaysia prior to 1 January 2020 (“Eligible Employers“). The subsidy is confined to Malaysian employees who earn Ringgit Malaysia four thousand (RM4,000.00) or less per month (“Eligible Employees“).

1.2       An application for the subsidy may be submitted online via from now until 15 September 2020. The subsidy is subject to available funds or until further notice by the Malaysian Government.

1.3        Eligible Employees will be entitled to receive the following subsidies:

(a)        a subsidy of RM600.00 per month per Eligible Employee, if they have over 200 employees;

(b)      a subsidy of RM800.00 per month per Eligible Employee, if they have between 76 and 200 employees;

(c)       a subsidy of RM1,200.00 per month per Eligible Employers if they have fewer than 76 employees.

1.4       The subsidy will be for 3 months from 1 April 2020 and Eligible Employers must undertake to retain Eligible Employees for the period of the subsidy and a further 3 months.

2.         Rental reduction/ waiver

2.1      The Government has also urged commercial landlords to reduce or waive the rental for the months of April 2020 until June 2020 as they will be given a tax deduction/incentive provided that the rental reduction is at least 30% for that period.

3.         Reduction of levy on foreign workers

3.1.      For companies employing foreign workers, the levy on foreign workers (save for domestic helpers) with work permits that expire within the period of 1 April 2020 to 31 December 2020, will be reduced by 25%.

4.         Loan Repayment Moratorium

4.1     The Central Bank of Malaysia has also announced an automatic moratorium on repayments of loans/financings taken by eligible borrowers, for six (6) months.

Chew Yu Shen

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