Overtime and public holiday pay rules trip up a lot of Malaysian employers, mostly because the rates aren’t uniform, they depend on when the work happens. Here’s how it actually breaks down.
Monthly Overtime Cap: 104 Hours
Under the Employment Act, an employee can work up to 104 hours of overtime in a single month on normal working days. This excludes overtime worked on rest days or gazetted public holidays, which fall under separate rules.
See our full breakdown of the overtime hour limit in Malaysia for more detail on this cap.
Overtime Pay Rates
Overtime pay is calculated differently depending on the type of day:
- Normal working day: generally at least 1.5 times the hourly rate of pay
- Rest day: calculated based on hours worked, with different treatment for work within versus beyond normal working hours
- Public holiday: at a significantly higher multiple of the ordinary rate of pay
The precise multipliers can vary based on employee category and salary level under the Employment Act. Confirm the exact rate applicable to your workforce against the current Act rather than assuming a flat multiplier applies to everyone.
Public Holiday Entitlement
Employees are entitled to paid public holidays, including a set number of gazetted public holidays each year. If an employee is required to work on a public holiday, they’re generally entitled to pay at a higher rate for that day, on top of a substitute holiday in some cases, confirm your company’s specific policy is aligned with current Employment Act requirements.
What If a Public Holiday Falls on a Rest Day?
This is a common point of confusion. When a public holiday coincides with an employee’s rest day, employers generally need to provide a substitute holiday or additional compensation. Check the specific Employment Act provision and any applicable state-level public holiday gazettes, since public holidays can vary by state in Malaysia.
Common Employer Mistakes
- Applying a single flat overtime rate regardless of whether it’s a normal day, rest day, or public holiday
- Not tracking the 104-hour monthly overtime cap separately from rest day and public holiday hours
- Missing state-specific public holiday differences when the workforce spans multiple states
- Not compensating correctly when a public holiday falls on a rest day
Frequently Asked Questions
How many overtime hours can an employee work in a month?
Up to 104 hours on normal working days, excluding rest day and public holiday work.
Is overtime pay the same rate on every type of day?
No. Normal working days, rest days, and public holidays are calculated at different rates under the Employment Act.
Do public holidays vary by state in Malaysia?
Yes. Beyond national public holidays, each state gazettes additional holidays that can differ, relevant for employers with staff across multiple states.
Related Reading
- Overtime Hour Limits in Malaysia: What’s Permitted
- Employment Act Malaysia: Key Updates Employers Need to Know
Calculating This Correctly Every Cycle
Overtime and public holiday pay involve enough variables that manual calculation is where errors creep in, in either direction. If you’d rather have this tracked and calculated correctly every payroll cycle, talk to Righthouse’s payroll outsourcing team.
