For Indonesian professionals planning to work in Malaysia, the Employment Pass (EP) is the single most important document to understand. It is the official work permit that allows foreign nationals to work legally for a company in Malaysia. 2026 brings major changes to salary requirements, making the details more critical than ever.
See also: Working as an Indonesian Professional in Malaysia: A Complete Guide
What Is an Employment Pass?
The Employment Pass is a work permit sponsored by a Malaysian employer — not something an individual applies for independently. This means you must first secure a job offer from a company willing to act as your sponsor. The EP is designed for professional, managerial, technical, and executive roles, distinct from permits for manual labor.
The Three Employment Pass Categories
Malaysia’s EP system is divided into three categories based on salary, seniority, and contract duration.
Category I
For high-level professionals: senior executives, technical directors, and C-suite roles. From 1 June 2026, the minimum salary rises to RM20,000 per month (up from RM10,000). This category offers permits of up to five years, reducing the burden of frequent renewals, and provides the most flexibility in the EP system.
Category II
For skilled professionals and mid-to-senior managers. The salary range is revised to RM10,000–RM19,999 per month. Category II holders can generally still sponsor dependents (spouse and children).
Category III
For technical roles, with a new salary range of RM5,000–RM9,999 per month (up from RM3,000). This category has shorter validity and certain restrictions, including limits on the number of renewals.
Key Changes Effective 1 June 2026
Malaysia’s government, through the Ministry of Home Affairs, announced these revised thresholds in January 2026. All new and renewal EP applications submitted on or after 1 June 2026 must meet the new salary thresholds. The policy aligns with goals to reduce reliance on foreign labor and prioritize qualified local talent.
Practical implication: if your EP renewal falls due around mid-2026, make sure your salary meets the new threshold — many rejections happen precisely because salaries fall below the updated minimum.
What to Know About the Salary Calculation
Immigration assesses eligibility on basic monthly salary only. Bonuses, allowances, housing stipends, and equity compensation are excluded. Therefore:
- Your employment contract must explicitly state the basic salary figure.
- That amount must be consistently reflected in monthly transfers to your Malaysian account.
- EPF and SOCSO contributions are calculated on this salary.
The Application Process in General
While the technical details are handled by your sponsoring company, the broad process includes:
- A job offer and contract from a Malaysian company.
- Submission by the company through the Expatriate Services Division (ESD) or the relevant sector body.
- Verification and approval, which for Category I now requires additional approval from labor authorities.
- EP issuance and visa endorsement in your passport.
Preparing Early
Once your EP is approved, there are financial steps worth handling promptly: opening a local bank account to receive your salary, and setting up an efficient way to send money back to Indonesia if you have obligations at home. Planning this early saves cost and hassle down the line.
The Employment Pass is the foundation of your legal career in Malaysia. With significant salary threshold changes from 1 June 2026, Indonesian professionals must ensure their job offers meet the appropriate category. Understand the right category, remember that only basic salary counts, and coordinate with your sponsoring company early.
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