Most Malaysians know overtime pay is "one and a half times". That is roughly where the knowledge stops — and it is also where the money starts going missing, because the Employment Act 1955 does not treat all extra hours the same way.
Rest days run on one formula. Public holidays run on another. And the number your employer divides your salary by decides your hourly rate before any multiplier touches it.
Here are six rules worth knowing before you look at your next payslip.
1. Rest day work is not "overtime"
This is the one that causes the most arguments, and the law is clear about it: work done on a rest day, a gazetted public holiday, or a substituted paid holiday is not construed as overtime work. It is its own category, with its own rates.
For a monthly-rated employee working on a rest day, the Employment Act sets out three situations:
- Work not exceeding half your normal hours: wages equivalent to half a day's ordinary rate of pay for that day.
- Work more than half but not exceeding your normal hours: one day's wages at the ordinary rate of pay.
- Hours worked beyond your normal hours on that rest day: not less than two times your hourly rate of pay.
So a four-hour Sunday shift and a nine-hour Sunday shift are not simply "double" and "double-plus". They are computed from different starting points. If your employer has been paying flat 1.5× for rest day work, that is not the Act's formula.
2. Your hourly rate comes from dividing by 26, not 30
Before any multiplier applies, two numbers have to exist.
Ordinary rate of pay (ORP) for a monthly-rated employee is defined in Section 60I(1A) as:
ORP = monthly rate of pay ÷ 26
Hourly rate of pay (HRP) is the ORP divided by your normal hours of work in a day.
Run it on a RM2,600 salary with an eight-hour day. ORP is RM100. HRP is RM12.50. One hour of ordinary overtime is 1.5 × RM12.50 = RM18.75.
Dividing by 30 instead of 26 shrinks the ORP to about RM86.67 and the HRP to RM10.83 — roughly 13% less on every overtime hour, every rest day, every public holiday. Over a year of shift work, that is not a rounding error.
Normal working hours themselves are capped at 8 hours a day and 45 hours a week. Where a contract sets shorter days, the 8-hour limit can be exceeded on other days, but no employee is to work more than 9 hours in a day or 45 hours in a week.
3. Public holiday pay sits on top of your holiday pay
Working a public holiday is the best-paid day in the Act, and it is also the one most commonly short-paid.
For a monthly-rated employee required to work on a paid holiday, the entitlement is two days' wages at the ordinary rate of pay — regardless of whether the hours worked that day were less than normal hours. That sits in addition to the holiday pay you would have received for the day anyway.
Hours worked in excess of normal hours on a paid public holiday are paid at not less than three times the hourly rate of pay.
Take the same RM2,600 example. Four hours on a public holiday is 2 × RM100 = RM200. So is eight hours. Nine hours is RM200 plus one hour at 3 × RM12.50 = RM237.50.
If your public holiday shift came back looking like a normal day plus a bit, check the arithmetic. This is the same category of quiet leakage as the payslip lines most people never read.
4. The RM4,000 line decides whether any of this is yours
Here is the part that catches people out.
The Employment (Amendment) Act 2022, in force from 1 January 2023, extended the Employment Act to employees on a contract of service regardless of wages. But the overtime-related protections did not follow everyone up the salary scale.
Under the amended First Schedule, employees earning up to RM4,000 a month are entitled to the overtime provisions. Employees earning more than RM4,000 a month are generally not entitled to overtime pay, rest day work pay, public holiday work pay or termination benefits — with an exception for manual workers.
Two practical consequences.
First, if you earn above RM4,000, your overtime is a matter of contract, not statute. What your offer letter and company handbook say is what you get. Read them.
Second — and this is the detail most people miss — commission, subsistence allowance and overtime are excluded when working out whether you cross the RM4,000 threshold. A basic salary of RM3,800 topped up with commission to RM4,500 does not automatically push you over the line.
5. There is a legal ceiling on overtime hours
Overtime is not unlimited, even when both sides are willing.
Under the Employment (Limitation of Overtime Work) Regulations 1980, an employee can be required to work a maximum of 104 hours of overtime per month. The Director-General may permit specific employees, groups or industries to exceed the limit on written application, but that is an exception granted on request, not a default an employer can assume.
If your monthly overtime regularly sits above 104 hours with no such permission in place, that is worth raising — both as a pay question and a health one.
6. Sabah and Sarawak run on different laws
The Employment Act 1955 and its 2022 amendments apply to Peninsular Malaysia and the Federal Territory of Labuan.
Sabah and Sarawak operate under the Sabah Labour Ordinance (Chapter 67) and the Sarawak Labour Ordinance (Chapter 76) respectively. Advice written for KL does not automatically transfer to KK or Kuching, and neither do the thresholds. If you are working in East Malaysia, check the Ordinance that applies to you.
If the numbers do not add up, start internally: ask HR, in writing, for the formula used to compute your ORP and HRP. A company that is paying correctly can produce it in a paragraph. If that goes nowhere, wage disputes are handled by the Jabatan Tenaga Kerja (Labour Department) under the Ministry of Human Resources. Bring your contract, payslips and the timesheet records that prove the hours.
We are not lawyers, and this is general information rather than advice on your contract — if there is real money at stake, an employment lawyer or the Labour Department is the right next call. The same applies to a workplace accident claim, which sits under a separate scheme entirely.
FAQ
What is the overtime rate in Malaysia?
For work beyond normal working hours on a normal working day, the Employment Act sets a rate of not less than 1.5 times the employee's hourly rate of pay. Rest days and public holidays use different formulas.
How do I calculate my hourly rate for overtime?
For a monthly-rated employee, ordinary rate of pay is the monthly rate divided by 26. Hourly rate of pay is that figure divided by your normal hours of work in a day.
Do I get overtime if I earn more than RM4,000 a month?
Not automatically. Under the amended First Schedule, employees earning above RM4,000 a month are generally not entitled to the statutory overtime, rest day and public holiday work provisions, except for manual workers. Above that line, your contract governs.
How much overtime can I legally be asked to work?
The Employment (Limitation of Overtime Work) Regulations 1980 set a limit of 104 hours of overtime per month, unless the Director-General has permitted otherwise on written application.
Is working on a rest day the same as overtime?
No. The Act specifically states that work carried out on a rest day, a gazetted public holiday or a substituted paid holiday is not construed as overtime work, and it is paid under separate provisions.
External references: Overtime practices and employee rights in Malaysian employment law — CCS, Key amendments to the Employment Act 1955 — Thomas Philip, Employment Act 1955 amendments — altHR
