# The Employment Pass After the 1 June 2026 Salary Revision

> The revised Employment Pass salary thresholds that took effect on 1 June 2026, the ESD company registration that gates every application, and the agencies that sponsor expatriates outside ESD.

- Category: employment
- Language: en
- Status: published
- Updated: 2026-07-20
- Canonical: https://negaraku.md/en/employment/employment-pass-malaysia

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On 1 June 2026 the price of an expatriate in Malaysia doubled at the top.

Category I went from RM10,000 to RM20,000 a month in basic salary. Category II moved from the RM5,000–RM9,999 range into RM10,000–RM19,999. Category III, the knowledge-worker band, went from RM3,000–RM4,999 to RM5,000–RM9,999. The bands they replaced had stood since a decision of the Economic Council on 20 December 2016 — nearly a decade — which is why so much of the published guidance still quotes them, and why a finance director budgeting from a 2025 article will be short by half.

This page states every band with the date it takes effect, because on this topic the date is the whole answer.

## What are the Employment Pass salary bands from 1 June 2026?

The Ministry of Home Affairs issued its press release on 14 January 2026; the Expatriate Services Division published the table the following day. Cabinet had approved the policy on 17 October 2025.

| Category | Until 31 May 2026 | From 1 June 2026 | Pass duration |
| --- | --- | --- | --- |
| Category I | RM10,000 and above | **RM20,000 and above** | Up to 10 years |
| Category II | RM5,000 – RM9,999 | **RM10,000 – RM19,999** | Up to 10 years, succession plan |
| Category III | RM3,000 – RM4,999 | **RM5,000 – RM9,999** | Up to 5 years, succession plan |

Two things about that table are commonly misread.

**It is basic salary, and only basic salary.** The joint FAQ issued by MOHA, Immigration, MIDA, MDEC, IRDA, ECERDC, Bank Negara, the Securities Commission and MYXpats — updated 12 February 2026 — puts it flatly: the salary requirement is based on basic salary only, and allowances or other payments are not included in the calculation. A RM22,000 package built from RM16,000 basic and RM6,000 of housing and car allowance is a Category II application. Restructuring the package to lift basic is the lever, and it has consequences for EPF, SOCSO and termination benefits that sit outside the immigration question entirely.

**The date that matters is the date of receipt, not the date of the offer letter.** The revised policy applies to all applications received on or after 1 June 2026.

## Which policy applies to an application already in the system?

The transitional rules are unusually precise, and they are the part practitioners actually need.

A complete application submitted before 1 June 2026 is assessed under the previous policy. If an application was submitted before 1 June 2026 but returned for incomplete documentation, it must be resubmitted within **ninety days from the returned date**; failure to do so cancels the application automatically, and the resubmission then falls under the revised policy.

Appeals have their own clock. For applications rejected at an Expatriate Committee meeting before 1 June 2026, a complete appeal had to be submitted within **fourteen days of the rejection**, and in any event **before 15 June 2026**, to be evaluated under the previous policy.

That fourteen-day figure is itself new. Until 15 May 2026 the online appeal window was six months. The ESD announcement of 30 April 2026 replaced it: appeals must now be submitted within fourteen days of rejection at the Expatriate Committee meeting, the facility is only accessible in that window, the application fee becomes non-refundable once an appeal is initiated, and late appeals are simply not accepted by the system. Anyone still working to a six-month appeal assumption will lose the right without ever seeing a refusal.

## Does the new policy affect an expatriate already holding a pass?

Not while the pass is valid. The policy is expressly forward-looking, not retrospective, and holders of valid passes are not required to resubmit anything.

The exposure is at renewal. A renewal may be filed as early as three months before expiry, and any renewal application falling on or after 1 June 2026 is assessed under the revised bands. So a Category I holder on RM12,000 basic — comfortably compliant when the pass was issued — is a Category II applicant at renewal, with the shorter approval history and the succession plan condition that comes with the category.

The FAQ gives exactly that example: a current EP I holder converted to EP II after implementation. It offers no general grandfathering mechanism — Question 19 is explicit that any renewal submitted after 1 June 2026 must comply with the revised salary requirements, and its worked example is an EP III holder who maintains RM3,500 at renewal, below the new floor, and must still comply. That absence of grandfathering is the single most consequential gap in the published material.

One narrow, sector-specific exception exists and is not general grandfathering. Transitional guidance issued through MYXpats on 21 May 2026 allows EP Category III roles in the Global Business Services (GBS) sector that require native or near-native language skills to continue to be assessed under the old salary thresholds for one year, until 1 June 2027, subject to MDEC eligibility verification. It is a targeted sub-sector carve-out, not a route for below-band holders generally.

## What changed for Category III?

More than the number. Category III was the most restricted pass in the system and 1 June 2026 loosened three constraints at once.

**Dependants are now allowed.** Under the previous policy Category III holders could not bring dependants at all. Applications submitted from 1 June 2026 onwards are subject to the revised policy, which permits it. Passes *issued* before 1 June 2026 remain under the old rule — so two Category III colleagues can sit in the same office with different family rights, decided by the issue date on the pass.

**The cooling-off period is gone.** Previously a Category III holder whose pass had been renewed twice, or who had held it for three consecutive years, had to leave Malaysia and serve a three-month cooling-off period before applying again; the same applied on a change of employer. The FAQ confirms the cooling-off period no longer applies following implementation, both for holders transitioning into the new Category III and for new holders.

**The minimum salary exemption application is abolished.** Companies used to be able to seek MOHA approval to hire a Category III expatriate below the salary floor. From 1 June 2026 those applications no longer apply.

Set against that, the contract term changed direction. Under the old guidebook a Category III employment contract could not exceed twelve months and the pass could be renewed a maximum of two times. The revised policy allows a duration of up to five years, and the FAQ confirms that companies may attach employment contracts of up to **60 months**.

## How is the employment duration counted?

This is the structural change hiding behind the salary headline, and it is where the ten-year and five-year caps acquire teeth.

From 1 June 2026 the calculation of an expatriate's employment period is **tied to the employing company**. Two consequences follow directly from the FAQ:

- On a **change of employment company**, the duration starts afresh from the date of employment with the new company.
- On a **change of pass category**, the duration starts from the issuance date of the new pass category.

So the cap is not a lifetime cap on the individual. It is a cap on the relationship. An expatriate who moves employers resets to zero; an expatriate who converts from Category III to Category II resets to zero. Any extension beyond the cap is subject to case-by-case evaluation based on national interest, which is not a right and should not be planned around.

Expatriates in Government agencies and public universities are a separate track: the requirement for MOHA approval beyond ten years there remains subject to Public Service Department circulars, unchanged.

## Is the succession plan requirement in force?

**No — and this is where almost every published guide is now wrong.**

The 15 January 2026 table attached a succession plan to the Category II and Category III durations, and the MOHA FAQ describes it in detail: identifying the roles to be transferred to local employees, training and mentoring, a timeline for local readiness, and continuity planning so the transition does not damage productivity. Failure to implement it may affect or lead to the rejection of future applications.

But on 26 May 2026 — five days before the policy took effect — MYXpats announced that, as part of a phased implementation, **the succession plan requirement will only take effect from 1 January 2027**. The salary bands and the duration framework began on 1 June 2026. The succession plan did not.

Employers therefore have a real, closing window: roughly six months in which the new salary floors apply but no succession documentation is assessed. That is the planning fact of the year in Malaysian mobility, and it is stated in a single short notice that most secondary coverage never picked up.

## What else started on 1 June 2026?

The same date brought a second obligation that sits outside immigration entirely. TalentCorp's 1:3 Internship Policy, run for the Ministry of Human Resources, moved from pilot to full implementation on 1 June 2026. It ties expatriate approvals to internship placements at published ratios — **1:3 for Category I, 1:2 for Category II, 1:1 for Category III** — with each placement being a minimum ten-week structured, paid, MySIP-endorsed internship at not less than RM500 a month. Internship-related expenditure attracts a double tax deduction through MySIP.

A company modelling the cost of a Category I hire from 1 June 2026 is therefore modelling RM20,000 of basic salary and three internship placements, not one number.

## What has to happen before any of this matters?

Nothing can be filed until the company itself is registered. The Expatriate Services Division is the first point of contact for any company wishing to employ an expatriate, and registration is the gate.

Two conditions decide eligibility. The company must be registered with SSM, with the Registry of Societies, or as an association or cooperative under Malaysian law. And it must meet a paid-up capital floor keyed to its equity structure:

| Equity | Paid-up capital |
| --- | --- |
| 100% locally owned | RM250,000 |
| Joint venture, minimum 30% foreign equity | RM350,000 |
| 100% foreign owned | RM500,000 |
| Foreign-owned, 51% or more, in wholesale, retail and trade | RM1,000,000 |

Foreign-owned companies in wholesale, retail and trade also need the WRT licence from the Ministry of Domestic Trade. The paid-up capital test does not apply to bodies incorporated under specific Acts or to associations registered under Malaysian law.

Registration takes fourteen working days once the documents are in order, and the document list is longer than most people expect: director identity documents, a comprehensive company profile including premises photographs, the latest telephone bill, the tenancy agreement or sale and purchase agreement, certified SSM Forms 9, 24 and 49, the latest audited financial report, the local authority licence where applicable, and any sector licence. Accounting and audit firms must add the *Sijil Akuan Pendaftaran Firma Perunding* issued by the **Ministry of Finance**; legal firms need a letter from the Bar Council Malaysia.

Then comes activation. A company **director must attend in person** to sign the Letter of Undertaking — it takes ten minutes, it is done once, and no one may attend in the director's place. Companies routinely lose two weeks here because a manager arrives with a signed authorisation.

## Who approves the application — and is it always ESD?

Often it is not. Where a company sits under a regulator, that regulator must issue a support letter for **every** Employment Pass application, requested through Xpats Gateway. The guidebook lists twenty-five sectors and their agencies, including MIDA for manufacturing and selected services, Bank Negara for licensed financial institutions and payment services, the Securities Commission for securities and derivatives markets, ECERDC for the East Coast, IRDA for the Iskandar region, MDEC for information and communications technology, MOH for nursing, allied health and traditional and complementary medicine, MOTAC, CIDB, CAAM, JMG, FINAS, MOE and MOHE.

Support letters run on a tiered charter. ESD scores every registered company from Tier 1 to Tier 5 on five indicators — relevance to the Malaysia Plan, company lifecycle stage, revenue, issued capital and track record — and the tier is visible in the company profile. **Fast track**, for Tier 1, Tier 2 and critical-sector companies, is three working days. **Normal track**, Tiers 3 to 5, is ten working days. The support letter is valid for six months and is single-use: a renewal needs a fresh one.

Some sectors bypass the support letter entirely and apply direct in ESD Online — business services, wholesale and retail, oil, gas and energy, logistics, electrical and electronics, and automotive — although the Expatriate Committee reserves the right to ask for one.

Two agencies do not merely support; they host the whole filing. Since 24 April 2024, all new and renewal Employment Pass applications for companies under MDEC's purview must be submitted through Xpats Gateway into the MDEC Expats System. Companies inside the Iskandar Malaysia postcodes register separately in IRDA's XPATNOVA system and file there. A company that assumes ESD Online is the only door will sit in the wrong queue.

## Where does the Labour Department come in?

Earlier than most employers realise. The ESD guidebook is explicit: before applying for a support letter from a regulator, employers must first obtain **prior approval from the Department of Labour Peninsular Malaysia and from MYFutureJobs (PERKESO)**.

That is s.60K of the Employment Act 1955 reaching into the immigration process. The Employment Pass looks like an Immigration matter and is administered as one, but the labour-market test sits upstream of it, and a support letter application filed without the JTKSM approval and the MYFutureJobs advertising trail is simply premature.

## Common mistakes

**Quoting RM10,000 for Category I.** It is the single most common error in circulation and it is now a full RM10,000 out. Any page that has not been revised since January 2026 carries it.

**Treating the succession plan as live.** It is not, until 1 January 2027. Guides published between January and May 2026 describe it as effective 1 June 2026 because the deferral notice came out on 26 May.

**Counting total package instead of basic.** Allowances do not qualify. This misclassifies applications at the band edges, where almost all disputes occur.

**Assuming a six-month appeal window.** It has been fourteen days since 15 May 2026, and the facility closes automatically.

**Assuming duration follows the person.** It follows the employing company. Moving employers restarts the clock — which is a benefit at the ten-year ceiling and a trap for anyone who assumed accrued years were portable.

**Filing before activation.** Registration is not enough. Until the director has signed the Letter of Undertaking in person, the account cannot submit anything.

**Forgetting the endorsement deadline.** An approved pass must be endorsed within thirty days of approval if the expatriate is in Malaysia, or thirty days after arrival if not.

## The manufacturing Category III floor: RM7,000, not RM5,000

There is a second, higher Category III floor that co-exists with the general RM5,000–RM9,999 band, and it is set out in the primary source, not left to conjecture. Question 10 of the 12 February 2026 FAQ asks which companies fall under the Manufacturing sector and Manufacturing-Related Services (MRS) "for Employment Pass Category III with the salary range of RM7,000–RM9,999", and its answer defines the eligibility precisely. A Manufacturing-sector company — any sub-sector under MITI and MIDA purview — qualifies if it holds either a Manufacturing Licence or a Manufacturing Exemption Confirmation Letter. An MRS company qualifies where it is a selected MIDA service sector that has obtained approval for incentives, status or grants. For those companies the Category III basic-salary floor is RM7,000, not the general RM5,000. The MOHA FAQ frames the higher figure as "a more realistic salary approach" for the sector.

What has never been published is only a standalone consolidated band table pulling the sector floors into one grid; the RM7,000 figure and the documents that qualify a company for it are stated in the official FAQ itself. So price a manufacturing or MRS Category III offer at RM7,000 basic, confirm your company holds the qualifying licence or MIDA approval, and treat RM5,000–RM9,999 as the general band that applies everywhere else.

## What do the fees come to?

The pass and visa fees are published, contrary to a common assumption that they are scattered. The Employment Pass fee schedule sits in a single ESD payment table (priced with 8% SST): an ESD application fee of RM2,000 — RM2,160 with SST, the revised fee effective 1 September 2024 — plus an immigration endorsement of RM200 per year (RM300 per year for a MIDA Key Post) and a processing fee of RM125 per application. The only component that is not in that table is the visa fee, which varies by nationality and is deliberately pointed to the Immigration Department's own *Kadar Bayaran Visa* table. Older figures still surfacing in search results — an RM800/RM848 application fee at 6% SST — are superseded by the current 8% table.

## What's next

If you have expatriates renewing in the next twelve months, run the list now against the new bands and identify everyone whose basic salary falls below the floor for their current category. That population is your budget problem, and their renewal dates are your deadlines.

Then get the succession plan drafted before 1 January 2027 rather than after — the deferral is six months of preparation time, not six months of relief. And check which agency actually owns your file, because MDEC, IRDA and the twenty-three other regulators each add their own queue in front of the Immigration decision.

## Sources

- Revised Employment Pass Salary Policy Effective 1 June 2026 — https://esd.imi.gov.my/portal/latest-news/announcement/announcement-266-ep-salary-policy-2026/ (Expatriate Services Division, Immigration Department of Malaysia)
- Frequently Asked Questions — Revised Expatriate Salary Policy Effective 1 June 2026 — https://esd.imi.gov.my/portal/pdf/Revised_Expatriate_Salary_Policy_FAQ.pdf (MOHA, Immigration Department, MIDA, MDEC, IRDA, ECERDC, BNM, SC, MYXpats)
- Update on Revised Expatriate Salary Policy — succession plan deferred to 1 January 2027 — https://esd.imi.gov.my/portal/latest-news/announcement/announcement-278/ (MYXpats Centre)
- FAQ — Revised Employment Pass Salary Policy, official responses issued by the Ministry of Home Affairs — https://esd.imi.gov.my/portal/pdf/EN%20FAQ%20-%20NEW%20EXPATRIATE%20EMPLOYMENT%20POLICY%20(EFFECTIVE%201%20JUNE%202026).pdf (Ministry of Home Affairs)
- ESD Online Guidebook V6 2025 — https://esd.imi.gov.my/portal/pdf/ESD_Online_Guidebook_V6_2025_(14042025).pdf (Expatriate Services Division, Immigration Department of Malaysia)
- FAQs — ESD Company Registration — https://esd.imi.gov.my/portal/faq/esd-company-registration/ (Expatriate Services Division, Immigration Department of Malaysia)
- Revision to Online Appeal Submission Timeline — https://esd.imi.gov.my/portal/latest-news/announcement/announcement-275/ (MYXpats Centre)
- Introducing the 1:3 Internship Policy — https://esd.imi.gov.my/portal/latest-news/announcement/announcement-274/ (MYXpats Centre / TalentCorp)
- ESD Payment Table (payment-table-v13.pdf) — EP application fee RM2,000 / RM2,160 with SST 8%; endorsement RM200/yr (RM300 MIDA Key Post); processing RM125; visa per Visa Table — https://esd.imi.gov.my/portal/pdf/payment-table-v13.pdf (MYXpats / Expatriate Services Division, Immigration Department of Malaysia)
- Kadar Bayaran Visa (nationality-specific visa fee table) — https://www.imi.gov.my/index.php/perkhidmatan-utama/visa/kadar-bayaran-visa/ (Immigration Department of Malaysia)
- Malaysia Confirms Transitional Arrangements for Employment Pass Minimum Salary Revision (GBS Category III one-year exemption to 1 June 2027) — https://newlandchase.com/malaysia-confirms-transitional-arrangements-for-employment-pass-minimum-salary-revision/ (Newland Chase)

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