Malaysia Employee Leave Guide (2026): Statutory Leave Entitlements
Malaysia Employee Leave Guide Series
Whether you're an HR professional, employer or employee, these guides cover both the minimum statutory leave entitlements under the Employment Act 1955 and the additional company leave benefits commonly offered in Malaysia.
- Part 1: Malaysia Employee Leave Guide (2026): Statutory Leave Entitlements
- Part 2: Malaysia Employee Leave Guide (2026): Non-Statutory Company Leave
You're currently reading: Part 1 – Statutory Leave Entitlements
Quick Summary
Every employer in Malaysia must provide certain minimum leave entitlements under the Employment Act 1955.
These include:
- Annual Leave
- Sick Leave
- Hospitalisation Leave
- Public Holidays
- Rest Days
- Maternity Leave
- Paternity Leave
Understanding these statutory minimums helps employers remain compliant while ensuring employees receive the benefits they are legally entitled to. The statutory leave entitlements remain unchanged in 2026, with the key amendments introduced under the Employment (Amendment) Act 2022 continuing to apply.
At a Glance
| Leave Type | Minimum Entitlement |
|---|---|
| Annual Leave | 8 / 12 / 16 days |
| Sick Leave | 14 / 18 / 22 days |
| Hospitalisation Leave | Additional 60 days |
| Public Holidays | Minimum 11 paid days |
| Weekly Rest Day | Minimum 1 day per week |
| Maternity Leave | 98 consecutive days |
| Paternity Leave | 7 consecutive days |
Who Does the Employment Act Apply To?
Since 1 January 2023, the Employment Act generally applies to all employees regardless of salary, although certain provisions—such as overtime eligibility and termination benefits—remain applicable only to specific employee categories.
1. Annual Leave
Annual leave entitlement depends on the employee's continuous service with the same employer.
| Continuous Service | Minimum Annual Leave |
|---|---|
| Less than 2 years | 8 days |
| 2 years or more but less than 5 years | 12 days |
| 5 years or more | 16 days |
These are statutory minimums.
Employers may always provide more generous annual leave under the employment contract or company policy.
Example
Encik Jason joined the company on 1 July.
The company provides 12 days annual leave per year.
By 31 December, he has completed 184 days of service.
One common pro-rated calculation method is:
(184 ÷ 365) × 12
= 6.05 days
Many companies round the entitlement according to their leave policy (for example, to 6 days).
HR Note: The Employment Act requires annual leave to be pro-rated for employees who have not completed a full 12 months of service. However, the Act does not prescribe a single pro-rating formula. Employers commonly use Actual Calendar Days, Completed Months or other clearly documented methods.
Can Annual Leave Be Carried Forward?
The Employment Act requires statutory annual leave to be taken within 12 months after the end of each completed 12-month service period.
If the leave is not taken within that period, the statutory entitlement may be forfeited.
Employers may choose to offer more generous carry-forward arrangements through company policy.
What Happens When an Employee Leaves?
If employment ends and the employee has earned but not taken statutory annual leave, the employer is generally required to pay wages in lieu of the unused annual leave.
Example
Encik Ali has:
- Monthly Salary: RM3,120
- Unused Annual Leave: 4 days
- Company calculation basis: 26 days
Daily Rate
RM3,120 ÷ 26
= RM120
Unused Leave Payment
RM120 × 4
= RM480
2. Paid Sick Leave
Employees are entitled to paid sick leave certified by a registered medical practitioner.
| Continuous Service | Paid Sick Leave |
|---|---|
| Less than 2 years | 14 days |
| 2 years or more but less than 5 years | 18 days |
| 5 years or more | 22 days |
Sick leave should not be deducted from annual leave.
3. Hospitalisation Leave
Where hospitalisation is necessary (or certified as such by a registered medical practitioner), employees are entitled to an additional 60 days of paid hospitalisation leave.
This entitlement is in addition to ordinary paid sick leave.
Example:
| Service | Sick Leave | Hospitalisation | Maximum |
|---|---|---|---|
| Less than 2 years | 14 | 60 | 74 days |
| 2–5 years | 18 | 60 | 78 days |
| 5 years and above | 22 | 60 | 82 days |
4. Public Holidays
Employees are entitled to at least 11 paid public holidays every calendar year.
Five compulsory public holidays are:
- National Day
- Birthday of the Yang di-Pertuan Agong
- State Ruler's Birthday / Federal Territory Day
- Labour Day
- Malaysia Day
The remaining public holidays are selected by the employer from gazetted public holidays.
If a public holiday falls on:
- another public holiday; or
- the employee's rest day,
the next working day becomes the replacement public holiday.
Example – Public Holiday Pay
Encik Lim earns RM3,000 per month.
He is rostered to work on a gazetted public holiday.
Daily Rate
RM3,000 ÷ 26
= RM115.38
If he works on a public holiday, he is entitled to his public holiday pay plus an additional two days' wages under the Employment Act.
Additional Public Holiday Payment
RM115.38 × 2
= RM230.76
If Encik Lim also works beyond his normal working hours on that public holiday, overtime payment may also apply based on the statutory overtime provisions.
5. Weekly Rest Day
Every employee should receive at least one rest day every week.
The rest day is determined by the employer and should be stated in the employment contract or company policy.
6. Maternity Leave
Eligible female employees are entitled to:
- 98 consecutive days paid maternity leave
- Paid at the employee's ordinary rate of pay
- Applicable for up to the first five surviving children, subject to eligibility conditions
The employee should notify the employer of her expected confinement and intended maternity leave commencement within the period prescribed under the Employment Act.
7. Paternity Leave
Eligible married male employees are entitled to:
- 7 consecutive days paid paternity leave
- Applicable for up to five confinements
- Subject to the eligibility requirements under the Employment Act
Other Leave Commonly Provided by Employers
The following are not statutory leave entitlements under the Employment Act but are commonly provided by employers:
- Compassionate Leave
- Marriage Leave
- Study Leave
- Examination Leave
- Birthday Leave
- Hajj Leave
- Emergency Leave
- Volunteer Leave
- Childcare Leave
These benefits depend entirely on the employer's contract or HR policy.
HR Compliance Checklist
☑ Review your employee handbook.
☑ Ensure statutory minimum leave is provided.
☑ Review annual leave carry-forward policy.
☑ Confirm leave pro-rating method.
☑ Review maternity and paternity leave procedures.
☑ Ensure payroll calculates public holiday and leave payments correctly.
☑ Keep leave records for audit purposes.
Frequently Asked Questions
Can employers provide more annual leave than the Employment Act?
Yes. The Employment Act sets the minimum entitlement. Employers are free to provide more generous benefits.
Can unused annual leave expire?
Yes. Statutory annual leave should generally be taken within 12 months after the end of the relevant service year. Company policies may provide more favourable carry-forward arrangements.
Is sick leave deducted from annual leave?
No. Paid sick leave and annual leave are separate statutory entitlements.
Is compassionate leave required by law?
No. Compassionate leave is not a statutory entitlement under the Employment Act and is granted according to company policy.
Can annual leave be paid in cash?
Where employment ends and the employee has earned but not taken statutory annual leave, wages in lieu of that leave are generally payable. Outside of termination, payment in lieu should follow the Employment Act and the employer's policy.
Key Takeaway
The Employment Act 1955 establishes the minimum statutory leave entitlements that employers in Malaysia must provide. While companies are free to offer more generous leave benefits, they cannot provide less than the legal minimum. Keeping HR policies aligned with the latest Employment Act requirements helps ensure compliance, reduces disputes and provides employees with clear and consistent leave benefits.