Employee Leave in Malaysia: A Complete Guide to Entitlements in 2026

Managing leave in Malaysia in 2026 is easier when everything is laid out clearly in one place. This guide walks through the statutory minimums under the Employment Act 1955 as amended, and highlights what employers should pay attention to when designing or updating leave policies.

Most of the key changes to the Employment Act took effect from 1 January 2023 and continue to apply in 2026. These include wider coverage of the Act for almost all employees, longer maternity leave, the introduction of paternity leave, and updated rules on working hours.

Overview of Employee Leave in Malaysia

Here’s how employees leave in Malaysia:

1. Public Holiday in Malaysia in 2026

Under the Employment Act, employees are entitled to at least 11 paid public holidays in a calendar year.

Of these 11 days:

• 5 must be the following national holidays
  • National Day
  • Birthday of the Yang di Pertuan Agong
  • Birthday of the Ruler or Yang di Pertua Negeri or Federal Territory Day
  • Workers Day
  • Malaysia Day
• The remaining 6 gazetted holidays are chosen by the employer and displayed at the workplace before the start of each year.

If a public holiday falls on a rest day or another public holiday, the next working day is treated as a paid holiday in substitution.

6.2 Rest days

Employees covered by the Employment Act are generally entitled to at least one rest day each week. Rest day entitlements interact with overtime and public holiday pay, so HR teams should ensure the work schedule is aligned with section 59 and related provisions of the Act.

2. Annual Leave Entitlements in Malaysia for 2026

Statutory Minimum Annual Leave

Under section 60E of the Employment Act, the minimum paid annual leave depends on the employee’s length of service with the same employer.

Key points

• Entitlement is based on each completed 12 months of continuous service.
• Many companies in practice offer 14 days or more from the start to stay competitive.

Pro Rating for Incomplete Years and Termination

If employment ends before a full 12 month cycle is completed, annual leave must be pro rated according to completed months of service. Fractions under half a day are ignored, and half a day or more is rounded up to a full day.

When an employee leaves and still has unused statutory leave, the employer must either:

• Allow the employee to take the remaining leave before the last day of service, or
• Pay cash in lieu at the employee’s ordinary rate of pay.

Carry Forward and Forfeiture

The Act requires employers to allow employees to use their annual leave not later than twelve months after the end of each twelve month service period. If leave is not taken by then, it can be forfeited.

In practice, many employers:

• Allow carry forward into the next year, with an internal cap
• Offer encashment options for above policy entitlements

3. Sick Leave and Hospitilation Leave

Paid sick leave entitlements

Under section 60F of the Employment Act, paid outpatient sick leave depends on length of service.

To qualify, employees must:

• Be examined and certified unfit for work by a registered medical practitioner or dentist, usually at the employer’s cost
• Inform the employer within 48 hours of the start of sick leave, otherwise the absence may be treated as unpaid and unauthorised

Hospitalisation leave

On top of the outpatient sick leave above, employees are entitled to up to 60 days of hospitalisation leave in a calendar year when hospitalisation is medically necessary.

4. Maternity Leave in Malaysia in 2026

Maternity leave is one of the most important changes to the Employment Act amendments.

From 1 January 2023 onward:

• Female employees are entitled to 98 consecutive days of maternity leave for each confinement, up from the previous 60 days.
• Leave can start as early as 30 days before the expected confinement date, with the balance taken after childbirth.

Eligibility conditions typically include:

• The employee must have worked for the employer for at least 90 days in the four months before her expected confinement date, to qualify for statutory maternity allowance.
• Protection from dismissal during pregnancy and maternity leave, except in very limited circumstances such as proven misconduct or business closure.

5. Paternity leave in Malaysia in 2026

Paternity leave is now part of the Employment Act framework.

Key statutory rules:

• Married male employees are entitled to 7 consecutive days of paid paternity leave for each confinement.
• This applies up to a maximum of 5 confinements across the employee’s employment, regardless of the number of marriages.
• The employee usually must have at least 12 months of service with the employer and must be legally married to the child’s mother.
• The 7 days are consecutive calendar days, so weekends and public holidays are included.

Paternity leave is fully paid by the employer and is not currently funded by SOCSO.

Leave Rules for Different Work Arrangements

1. Part time and contract employees

Part time and contract employees who are covered by the Employment Act are entitled to the same statutory leave, pro rated based on their working hours compared to a full time employee.

A common approach is: (Part time hours per week ÷ standard full time hours) x by the full time leave entitlement

2. Probationers

Probationers are employees and still fall under the Act. In practice:

• Leave entitlement usually starts accruing from day one
• Some employers only allow annual leave to be taken after probation ends, while others allow earlier usage with manager approval

3. Cross Border and Remote Teams

For employees working remotely from Malaysia for foreign employers, statutory Malaysian leave still applies if the Employment Act applies to the employment relationship. On the other hand, employers may also need to consider home country policies and contractual promises, especially when the role is part of a regional or global scheme.

This is where clear contracts, consistent policy wording, and the right support structure, such as an employer of record arrangement, become crucial to avoid conflicts between Malaysian law and overseas handbooks.

If your organisation is hiring in Malaysia without a local entity or coordinating teams across multiple Southeast Asian markets, keeping track of different leave rules can quickly become overwhelming. You are managing statutory entitlements, payroll adjustments, and internal policy consistency, all while trying to maintain a smooth employee experience.

How an EOR or Workforce Partner can Help

Staying compliant with Malaysia’s Employment Act can feel demanding, especially when every update affects how you calculate leave, track entitlements and manage payroll for different types of employees. Annual leave, sick leave, hospitalisation rules, maternity protections and varying state level holidays all come with specific conditions, and even one oversight can lead to disputes, payroll errors or inconsistent experiences for your team.

An Employer of Record with strong Malaysian expertise helps simplify this by interpreting the Act correctly, applying the right rules in your policies and systems, and managing leave calculations and statutory submissions on your behalf.

With Glints TalentHub handling the compliance heavy work, your team can stay focused on growth while knowing your employees’ leave and payroll processes are always aligned with Malaysian law.

This article is brought to you by Glints TalentHub. Leading companies are actively building their borderless teams in Southeast Asia, Taiwan, and beyond. However, the prospect of going borderless can be daunting due to complex regulations and cultural ambiguities. With Glints TalentHub, you’ll have a dedicated team of in-market legal, HR, and talent experts by your side at every step of the way.

Glints TalentHub offers an end-to-end, tech-enabled talent solution that encompasses talent acquisition, EOR, and talent development. We empower businesses to leverage the strengths of regional talent efficiently to build high-performing, cost-efficient teams.

Schedule a no-obligation consultation with our experts to receive a tailored proposal today!