Malaysia’s 2027 Budget: Higher wages, 30,000 New Jobs as TalentCorp backs Worker support

SINGAPORE, 11 OCTOBER 2026 —

Malaysia’s 2027 Budget Unveils RM2,000 Minimum Wage Hike, 30,000 New Jobs Under Bakat MADANI as KESUMA Pushes Worker Protection and ASEAN Expansion

Human Resources Minister Dato’ Sri Ramanan Ramakrishnan has outlined a sweeping overhaul of Malaysia’s labour policies in Budget 2027, including a RM300 (17.6%) increase in the national minimum wage to RM2,000 per month from June 2027, while launching Bakat MADANI, a government-backed programme aimed at creating 30,000 new jobs across Government-Linked Investment Companies (GLICs), Government-Linked Companies (GLCs), and the private sector by leveraging TalentCorp’s regional networks.

The measures mark the most ambitious labour reform push in years, directly targeting wage stagnation, skills mismatches, and the needs of gig workers while accelerating Malaysia’s role as an ASEAN business hub.

With over 4 million workers set to benefit from the wage hike—excluding micro, small, and medium enterprises (MSMEs) with annual sales below RM50 million—the government is balancing economic growth with social protection, even as it introduces tax deductions for companies that adopt Bakat MADANI training programmes between 29 June 2026 and 31 December 2030, administered by TalentCorp.

Ramanan framed the initiatives as a three-pronged strategy: raising wages to reflect skills and qualifications, expanding employment opportunities—particularly in ASEAN—and strengthening social protections for vulnerable workers, including gig economy participants and religious personnel. "KESUMA’s priority is to ensure that wage increases are supported by relevant skills and better social protection," he said, adding that the reforms would "give young Malaysians greater access to quality employment" while helping businesses scale regionally.

Bakat MADANI: 30,000 Jobs and Tax Incentives to Fuel ASEAN Growth At the heart of the employment push is Bakat MADANI, a national talent development programme that will channel opportunities through six GLICs, PETRONAS, GLCs, and private-sector partners. The initiative will offer tax deductions for companies that invest in training under the programme, with TalentCorp facilitating applications.

This aligns with Malaysia’s broader Malaysian ASEAN Business Entity (MyABE) initiative, led by the Securities Commission Malaysia, which aims to streamline regional expansion for local firms.

A key operational change will be TalentCorp’s role in fast-tracking Employment Pass applications for MyABE-listed companies, with a target processing time of five working days. This is designed to help Malaysian businesses—particularly those in digital economy, manufacturing, and services—access global talent as they expand into Singapore, Indonesia, Thailand, and Vietnam, where labour shortages and rising wages are pressing concerns.

The wage reforms extend beyond the minimum wage. GLICs and GLCs have committed to raising their living wage benchmark from RM3,100 to RM3,400, directly benefiting 230,000 workers employed by these entities. Additionally, the government has introduced a RM2,500 monthly minimum wage for semi-skilled workers and graduates, positioning it as a first step in restructuring Malaysia’s income framework to better align remuneration with qualifications.

Gig Economy and Religious Workers: Targeted Social Protection The Budget also addresses two of Malaysia’s most precarious workforces: gig economy drivers and religious personnel. A RM160 million fund, jointly financed by the government and Grab, will support e-hailing and p-hailing workers starting in 2027, covering higher minimum earnings rates, vehicle maintenance, insurance, and SOCSO contributions.

The Gig Consultative Council is currently negotiating minimum earnings rates, an earnings formula, and social protection standards, with finalisation expected by early 2027.

Ramanan emphasised that gig workers’ earnings must account for working time and operational costs to ensure "fairer and more sustainable net incomes." Separately, Tabung Haji will fully fund SOCSO contributions for 40,000 religious workers, including imams, bilals, mosque attendants, and takmir teachers—a move aimed at formalising an otherwise informal sector.

RM8 Billion TVET Push and Employer Collaboration To underpin the wage and employment reforms, Budget 2027 allocates RM8 billion across ministries for technical and vocational education and training (TVET), reflecting the government’s recognition that skills development must keep pace with wage increases.

Ramanan urged employers, training providers, and platform companies to collaborate in implementing these initiatives, stating: "I invite employers, training providers, and platform companies to work together to advance this agenda so that workers can build more secure lives."

The reforms come as Malaysia grapples with rising inflation, labour shortages in key sectors, and competitive pressures from neighbouring economies. The RM2,000 minimum wage—nearly 18% higher than the current rate—will increase pressure on MSMEs, though the exemption for those with annual sales below RM50 million provides some relief. Meanwhile, the RM3,400 living wage benchmark for GLCs and GLICs signals a shift toward market-driven wage setting, potentially influencing private-sector pay scales over time.

Regional and Sectoral Implications For ASEAN, Malaysia’s wage hikes and talent development initiatives position it as a more attractive base for regional headquarters, particularly for firms seeking to balance cost efficiency with access to skilled labour. The five-day Employment Pass processing time under MyABE could give Malaysian companies an edge over competitors in Singapore and Thailand, where similar visas often take longer.

In Malaysia, the reforms are likely to intensify competition for talent in high-demand sectors, including manufacturing, digital economy, and healthcare, where skills shortages have long constrained growth. The RM2,500 wage floor for semi-skilled workers and graduates may also accelerate automation in labour-intensive industries, as businesses evaluate whether to upskill workers or adopt technology.

Next Steps: Implementation and Stakeholder Engagement The timeline for implementation is tight. Tax deductions for Bakat MADANI training programmes will be available from 29 June 2026, with TalentCorp overseeing applications. The minimum wage increase to RM2,000 takes effect June 2027, while the RM160 million gig worker fund and Gig Consultative Council’s earnings framework are set to be finalised by early 2027.

Ramanan’s call for employer and platform collaboration suggests that the success of these measures will depend on private-sector buy-in, particularly in gig economy and MSME sectors. The government’s decision to exempt small businesses from the minimum wage hike—while providing RM8 billion for TVET—indicates a phased approach, aiming to mitigate disruption while ensuring long-term competitiveness.

As Malaysia prepares to roll out these reforms, the focus will be on whether businesses can absorb higher wages without stifling growth, and whether TalentCorp and MyABE can deliver on their promises of faster regional expansion and job creation. With ASEAN’s labour market evolving rapidly, the stakes are high: will these measures position Malaysia as a high-wage, high-skills economy—or will external pressures force further adjustments before 2027?

Related: Dato’ Sri Ramanan Ramakrishnan