Minimum wage exemption for small firms aims to aid recruitment and digital upgrades in 2027

Under the 2027 Budget, businesses classified as MSMEs with revenue under RM50 million will be temporarily exempt from the new RM2,000 minimum wage, which starts in June 2027. Rizal Nainy, chief executive of SME Corporation Malaysia, said that the exemption allows these firms to restructure hiring and salary plans while adopting automation and digital tools to improve efficiency and cut labor costs. He noted that the budget also expands financing guarantees to RM57 billion and reduces the corporate income tax rate for qualifying MSMEs by one percentage point.

The government aims to use these measures to help micro enterprises grow into larger firms and to increase their contribution to Malaysia’s GDP. The CEO urged MSMEs to seek accurate information to fully benefit from the budget’s support.