# Leave entitlements under the Employment Act 1955

> Annual leave, sick leave, hospitalisation leave and paid holidays in one place, including the 2023 change that made hospitalisation leave a separate entitlement rather than part of the sick-leave allowance.

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

---

The single most expensive leave error in Malaysian payroll is still being made three
years after the law changed: treating the 60 days of hospitalisation leave as a ceiling
that absorbs ordinary sick leave. It is not, and it has not been since 1 January 2023.

## What changed in section 60F

Before the Employment (Amendment) Act 2022, s.60F(1) gave sick leave of 14, 18 or 22
days where no hospitalisation was necessary and 60 days where it was — and then closed
with a proviso capping *the total number of days of paid sick leave in a calendar year*
at 60 in the aggregate. An employee who used 22 days of ordinary sick leave had 38 days
of hospitalisation leave left.

**That proviso was deleted.** The current text sets out two independent limbs:

> **(aa)** where no hospitalization is necessary — 14 days if employed less than two
> years, 18 days from two to under five, 22 days from five years.
>
> **(bb)** **60 days** in the aggregate in each calendar year **if hospitalization is
> necessary**.

There is no aggregate cap. A five-year employee has 22 plus 60. Payroll systems
configured before 2023, and a large share of the guidance still ranking online, get this
wrong.

One more limb matters. The proviso to s.60F(1) deems an employee **hospitalised** where
a registered medical practitioner or medical officer certifies them ill enough to need
hospitalisation but they are not hospitalised *for any reason whatsoever* — bed
shortages, refusal, home care. The entitlement follows the certificate, not the
admission.

## Annual leave under section 60E

| Continuous service with the same employer | Paid annual leave |
| --- | --- |
| Less than 2 years | **8 days** for every 12 months |
| 2 years to under 5 years | **12 days** |
| 5 years or more | **16 days** |

Where the contract terminates before twelve months of continuous service is completed in
that year, entitlement is **in direct proportion to completed months**. Fractions below
half a day are disregarded; half a day or more counts as a full day.

Four operating rules go with it:

- **s.60E(1A)** — annual leave is *in addition to* rest days and paid holidays.
- **s.60E(1B)** — sick or maternity leave arising during annual leave displaces the
  annual leave for those days.
- **s.60E(2)** — leave must be taken within twelve months after the end of the qualifying
  year, or it is lost. Payment in lieu is permitted only where, **at the employer's
  request**, the employee agrees in writing not to take it.
- **s.60E(3B)** — unpaid leave exceeding 30 days in aggregate in any twelve months is
  disregarded when computing length of service for this section.

There is also a forfeiture the market rarely mentions: the second proviso to s.60E(1)
removes the entitlement entirely where the employee has been absent without permission
and without reasonable excuse for **more than 10 per cent of the working days** in the
qualifying twelve months.

On termination, s.60E(2A) entitles the employee to take accrued leave before the
termination takes effect, and s.60E(3A) requires payment at the ordinary rate for
untaken leave — except where the employee is dismissed under s.14(1)(a) for misconduct.

## Sick leave mechanics

The examination must be **at the employer's expense**, by a medical practitioner
appointed by the employer or, where none is appointed or the appointed practitioner is
not obtainable within a reasonable time or distance, by any other registered medical
practitioner or medical officer.

Section 60F(1A) extends the entitlement to certification by a **dental surgeon** under
the Dental Act 1971, but expressly *inclusive of* the days in paragraphs (aa) and (bb) —
dental leave does not add a third bucket.

Section 60F(2) turns sick leave into unauthorised absence in two cases: uncertified
leave, and certified leave where the employee did not inform or attempt to inform the
employer **within 48 hours** of it starting.

Section 60F(4) removes paid sick leave for any period during which the employee is
entitled to maternity allowance under Part IX, is receiving disablement compensation
under the Workmen's Compensation Act 1952, or is receiving periodical payments for
temporary disablement under the Employees Social Security Act 1969. That last limb is
the one payroll misses — an employee on SOCSO temporary disablement is not
simultaneously on paid sick leave.

Payment is at the **ordinary rate of pay**, and a monthly-rated employee who receives
the full month's wages without abatement is deemed to have received it.

## Paid public holidays

Section 60D(1) entitles every employee to paid holidays on **eleven gazetted public
holidays**, of which five are fixed by the Act:

1. National Day
2. the Birthday of the Yang di-Pertuan Agong
3. the Birthday of the Ruler or Yang di-Pertua Negeri of the State where the employee
   wholly or mainly works, or Federal Territory Day for Federal Territory employees
4. Workers' Day
5. Malaysia Day

Plus any day appointed under s.8 of the Holidays Act 1951. The employer must **display a
notice before each calendar year begins** specifying the remaining six, under s.60D(1A),
and may substitute other days by agreement.

Where a holiday falls on a rest day or on another public holiday, the **next working day
becomes a paid holiday in substitution**.

## Who is covered

Everyone under a contract of service, by First Schedule paragraph 1 — no wage floor and
no wage ceiling for leave purposes. The RM4,000 threshold in paragraph 1A disapplies
only ss.60(3), 60A(3), 60C(2A), 60D(3), 60D(4) and s.60J, which are pay rates for
rest-day, overtime, shift and holiday work, and termination benefits.

The real carve-out is **domestic employees**. First Schedule paragraph 2(5) disapplies
ss.12, 14, 16, 22, 58A, 60, 60A, 60B, 60C, 60D, 60E, 60F, 60FA, 60I, 61 and 64, and
Parts IX and XIIA, to them.

Sabah and Sarawak run their own Labour Ordinances, and the 2025 amendments there do not
map section-for-section onto Act 265.

## Common mistakes

**Netting hospitalisation leave against sick leave.** Two separate limbs since 2023.

**Requiring actual admission.** The proviso deems the employee hospitalised on the
certificate alone.

**Paying out annual leave as a matter of course.** Payment in lieu under s.60E(2)
requires the employer's request and the employee's written agreement — not the reverse.

**Counting probation out of service.** Continuous service runs from the start of the
contract, not from confirmation.

**Paying sick leave on top of SOCSO temporary disablement.** Section 60F(4) excludes it.

**Assuming senior staff have no leave rights.** Paragraph 1A is a closed list of six
provisions and leave is not in it.

## What's next

Reconfigure the sick-leave and hospitalisation-leave buckets in payroll as separate
counters, then check the s.60D(1A) notice of the six remaining gazetted holidays is
displayed before the year starts. For the year's dates see
[public holidays by state](/en/employment/public-holidays-malaysia).

## Sources

- Employment Act 1955 (Act 265), updated text as at 1 January 2023 — https://jtksm.mohr.gov.my/sites/default/files/2023-11/Akta%20Kerja%201955%20(Akta%20265)_0.pdf (Jabatan Tenaga Kerja Semenanjung Malaysia)
- Jadual Hari Kelepasan Am Persekutuan dan Negeri 2026 — https://www.kabinet.gov.my/storage/2025/08/HKA-2026.pdf (Bahagian Kabinet, Perlembagaan dan Perhubungan Antara Kerajaan, Jabatan Perdana Menteri)
- Holidays Act 1951 (Act 369), updated text — https://lom.agc.gov.my/ilims/upload/portal/akta/LOM/EN/Act%20369%20-%20Holiday%20Act%201951.pdf (Attorney General's Chambers)

---
Source of truth: https://github.com/negaraku-md/NegaraKu.md
License: CC BY-SA 4.0