Employee Leave in Malaysia: Statutory Entitlements for 2026

Employee leave entitlement in Malaysia depends on the employee’s length of service, type of employment and work location. In Peninsular Malaysia and Labuan, the main statutory requirements are governed by the Employment Act 1955. Sabah and Sarawak have separate labour ordinances, although recent amendments have brought many entitlements closer to those available in Peninsular Malaysia.

For full time employees covered by the Employment Act, the minimum entitlements include 8 to 16 days of annual leave, 14 to 22 days of outpatient sick leave, up to 60 days of hospitalisation leave, 98 consecutive days of maternity leave, seven consecutive days of paternity leave for eligible employees, and at least 11 paid public holidays each year.

Employers may offer more generous benefits through employment contracts or company policies, but they cannot provide terms that are less favourable than the applicable statutory minimums.

Which Employment Law Applies in Malaysia?

Malaysia does not have one employment law that applies uniformly across every state and federal territory. The legislation governing an employee generally depends on where the employee works.

Employers should identify the applicable jurisdiction before preparing employment contracts, setting leave entitlements or creating company policies. Although employment protections across Malaysia share many similarities, some requirements and administrative procedures differ between Peninsular Malaysia, Labuan, Sabah and Sarawak.

1. Peninsular Malaysia

Employees working in Peninsular Malaysia are primarily governed by the Employment Act 1955.

The Act establishes minimum employment standards covering matters such as annual leave, sick leave, hospitalisation leave, maternity leave, paternity leave, public holidays, working hours and termination benefits.

Following amendments that took effect on 1 January 2023, the Employment Act generally covers all private sector employees in Peninsular Malaysia, regardless of salary. However, certain provisions, including some overtime and rest day payment protections, may not apply to employees earning more than the statutory wage threshold unless they perform specific categories of work.

2. Federal Territory of Labuan

The Employment Act 1955 also applies to private sector employees in the Federal Territory of Labuan.

Its application to Labuan is provided through the Federal Territory of Labuan (Extension and Modification of Employment Act) Order 2000. This means employers in Labuan generally follow the same core statutory leave requirements that apply in Peninsular Malaysia, subject to any modifications made under the extension order.

Labuan should therefore not be grouped with Sabah simply because of its geographical location near the state.

3. Sabah

Employees working in Sabah are governed by the Labour Ordinance of Sabah rather than the Employment Act 1955.

The Sabah Labour Ordinance covers core employment matters such as contracts of service, wages, working hours, public holidays and employee leave. Significant amendments came into effect on 1 May 2025 to strengthen employee protections and bring several employment standards more closely in line with those in Peninsular Malaysia.

Employers hiring in Sabah should review the current version of the ordinance instead of assuming that an Employment Act policy can be applied without adjustment.

4. Sarawak

Employees working in Sarawak are governed by the Labour Ordinance of Sarawak rather than the Employment Act 1955.

The Sarawak Labour Ordinance regulates employment contracts, payment of wages, working time, rest days, public holidays and statutory leave entitlements. Amendments effective from 1 May 2025 expanded the ordinance’s coverage and updated several employee protections.

Employers operating in Sarawak should ensure that their contracts and leave policies refer to the Sarawak requirements, particularly when managing employees across multiple Malaysian locations.

Why the Employee’s Work Location Matters

A company may have its headquarters in Kuala Lumpur while employing team members in Kota Kinabalu or Kuching. In this situation, using one standard Peninsular Malaysia employment policy for every employee may overlook requirements under the Sabah or Sarawak labour ordinances.

Before confirming an employee’s leave entitlement, employers should check:

1. Where the employee is employed and ordinarily performs their work
2. Which employment legislation applies in that location
3. Whether the employee falls within any special employment category
4. Whether the employment contract provides benefits above the statutory minimum
5. Whether recent legislative amendments affect the company’s existing policies

The leave entitlements described in the following sections primarily refer to employees governed by the Employment Act 1955 in Peninsular Malaysia and Labuan. Employers with employees in Sabah or Sarawak should verify the corresponding entitlement under the applicable labour ordinance.

Summary of Statutory Leave Entitlements in Malaysia

Leave type	Statutory minimum	Main condition
Annual leave	8, 12 or 16 days	Based on length of service
Outpatient sick leave	14, 18 or 22 days	Based on length of service and medical certification
Hospitalisation leave	Up to 60 days	Separate from outpatient sick leave
Maternity leave	98 consecutive days	Maternity allowance has separate eligibility conditions
Paternity leave	7 consecutive days	Legally married, at least 12 months of service and required notice
Paid public holidays	At least 11 days	Includes five specified holidays and six selected holidays
Weekly rest day	At least one day	Subject to the employee’s work schedule

These figures primarily describe full time employees governed by the Employment Act 1955 in Peninsular Malaysia and Labuan. Employers in Sabah and Sarawak must refer to the applicable state labour ordinance.

Overview of Employee Leave Entitlements in Malaysia

Here is an overview of the main statutory leave entitlements 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.

Date	Day	Holiday	States
1 Jan 2026	Thu	New Year’s Day	National except Johor, Kedah, Kelantan, Perlis, Terengganu
14 Jan 2026	Wed	YDPB Negeri Sembilan’s Birthday	Negeri Sembilan
17 Jan 2026	Sat	Israk and Mikraj	Kedah, Negeri Sembilan, Perlis, Terengganu
18 Jan 2026	Sun	Israk and Mikraj Holiday	Terengganu
1 Feb 2026	Sun	Thaipusam	Johor, Kuala Lumpur, Negeri Sembilan, Penang, Perak, Putrajaya, Selangor
1 Feb 2026	Sun	Federal Territory Day	Kuala Lumpur, Labuan, Putrajaya
2 Feb 2026	Mon	Federal Territory Day Holiday	Kuala Lumpur, Labuan, Putrajaya
2 Feb 2026	Mon	Thaipusam Holiday	Johor, Kuala Lumpur, Negeri Sembilan, Penang, Perak, Putrajaya, Selangor
17 Feb 2026	Tue	Chinese New Year	National
18 Feb 2026	Wed	Chinese New Year Holiday	National
19 Feb 2026	Thu	Awal Ramadan	Johor, Kedah
20 Feb 2026	Fri	Independence Declaration Day	Melaka
4 Mar 2026	Wed	Installation of Sultan Terengganu	Terengganu
7 Mar 2026	Sat	Nuzul Al Quran	National except Johor, Kedah, Melaka, Negeri Sembilan, Sabah, Sarawak
8 Mar 2026	Sun	Nuzul Al Quran Holiday	Kelantan, Terengganu
21 Mar 2026	Sat	Hari Raya Aidilfitri	National
22 Mar 2026	Sun	Hari Raya Aidilfitri Holiday	National
23 Mar 2026	Mon	Sultan of Johor’s Birthday	Johor
23 Mar 2026	Mon	Hari Raya Aidilfitri Holiday	National except Kedah
24 Mar 2026	Tue	Hari Raya Aidilfitri Holiday	Melaka
30 Mar 2026	Mon	Sabah Governor’s Birthday	Sabah
3 Apr 2026	Fri	Good Friday	Sabah, Sarawak
26 Apr 2026	Sun	Sultan of Terengganu’s Birthday	Terengganu
1 May 2026	Fri	Labour Day	National
3 May 2026	Sun	Labour Day Holiday	Kedah
17 May 2026	Sun	Raja Perlis’ Birthday	Perlis
18 May 2026	Mon	Raja Perlis’ Birthday Holiday	Perlis
22 May 2026	Fri	Hari Hol Pahang	Pahang
26 May 2026	Tue	Arafat Day	Kelantan, Terengganu
27 May 2026	Wed	Hari Raya Haji	National
28 May 2026	Thu	Hari Raya Haji Holiday	Kedah, Kelantan, Perlis, Terengganu
30 May 2026	Sat	Harvest Festival	Labuan, Sabah
31 May 2026	Sun	Wesak Day	National
31 May 2026	Sun	Harvest Festival Holiday	Labuan, Sabah
1 Jun 2026	Mon	Hari Gawai	Sarawak
1 Jun 2026	Mon	Agong’s Birthday	National
1 Jun 2026	Mon	Wesak Day Holiday	National except Kedah, Kelantan, Terengganu
2 Jun 2026	Tue	Hari Gawai Holiday	Sarawak
17 Jun 2026	Wed	Awal Muharram	National
21 Jun 2026	Sun	Sultan of Kedah’s Birthday	Kedah
7 Jul 2026	Tue	Georgetown World Heritage City Day	Penang
11 Jul 2026	Sat	Penang Governor’s Birthday	Penang
21 Jul 2026	Tue	Hari Hol Almarhum Sultan Iskandar	Johor
22 Jul 2026	Wed	Sarawak Day	Sarawak
31 Jul 2026	Fri	Sultan of Pahang’s Birthday	Pahang
24 Aug 2026	Mon	Melaka Governor’s Birthday	Melaka
25 Aug 2026	Tue	Prophet Muhammad’s Birthday	National
31 Aug 2026	Mon	Merdeka Day	National
16 Sep 2026	Wed	Malaysia Day	National
29 Sep 2026	Tue	Sultan of Kelantan’s Birthday	Kelantan
30 Sep 2026	Wed	Sultan of Kelantan’s Birthday Holiday	Kelantan
10 Oct 2026	Sat	Sarawak Governor’s Birthday	Sarawak
6 Nov 2026	Fri	Sultan of Perak’s Birthday	Perak
8 Nov 2026	Sun	Deepavali	National except Sarawak
9 Nov 2026	Mon	Deepavali Holiday	National except Kedah, Kelantan, Sarawak, Terengganu
11 Dec 2026	Fri	Sultan of Selangor’s Birthday	Selangor
24 Dec 2026	Thu	Christmas Eve	Sabah
25 Dec 2026	Fri	Christmas Day	National
27 Dec 2026	Sun	Christmas Holiday	Kedah

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.

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.

3. 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.

Continuous service with same employer	Minimum paid annual leave per year
Less than 2 years	8 days
2 to less than 5 years	12 days
5 years or more	16 days

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

4. 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.

Length of service with employer	Paid sick leave per calendar year (no hospitalisation)
Less than 2 years	14 days
2 to less than 5 years	18 days
5 years or more	22 days

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.

5. 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.

6. 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 organization 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.

Managing Employee Leave When Hiring in Malaysia

Hiring employees in Malaysia requires more than adding leave balances to an HR system. You need to determine which employment legislation applies, provide the correct contractual entitlements, configure state specific public holidays, calculate leave and payroll accurately, and maintain the required employment records.

This becomes more complex when your company does not have a Malaysian entity or when employees work across Peninsular Malaysia, Sabah and Sarawak.

Glints TalentHub helps companies hire, onboard, pay and manage professionals in Malaysia through one workforce partner. Your team retains control over employees’ responsibilities and performance, while local employment contracts, payroll administration, statutory benefits and employment compliance are managed with in market support.

Speak with a Malaysia hiring specialist.

Frequently Asked Question about Employee Leave in Malaysia

How many days of annual leave are employees entitled to in Malaysia?

Full time employees covered by the Employment Act receive at least 8, 12 or 16 days, depending on their length of continuous service.

Is annual leave compulsory in Malaysia?

Yes. Eligible employees are entitled to statutory paid annual leave. An employer may offer more leave but cannot contract below the applicable statutory minimum.

Can unused annual leave be carried forward in Malaysia?

Employees must generally be allowed to take statutory leave within 12 months after the end of the service period in which it was earned. Company policies may provide more generous carry forward arrangements.

Is hospitalisation leave separate from sick leave in Malaysia?

Yes. Under the current Employment Act framework, eligible employees receive up to 60 days of hospitalisation leave in addition to their outpatient sick leave entitlement.

Do probationary employees receive annual leave?

Probationary employees remain employees. Their entitlement and ability to take leave should be managed in line with the applicable legislation and employment contract.

Are part time employees entitled to annual leave?

Yes. Qualifying part time employees receive at least 6, 8 or 11 days of annual leave depending on their length of service.

Does the Employment Act apply in Sabah and Sarawak?

No. The Employment Act primarily applies in Peninsular Malaysia and Labuan. Sabah and Sarawak have their own labour ordinances.

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