Termination Benefits Calculator Malaysia
The minimum termination benefit in Malaysia is 10, 15 or 20 days' wages for each year of service (under 2, 2 to 5, and 5 or more years). An employee retrenched after 7 years 6 months on RM3,500 a month gets at least RM 20,192.31, plus 8 weeks' notice or RM 6,461.54 in lieu. Enter your dates and wage below.
Your entitlement
Minimum termination benefit
8 weeks' notice · RM 6,461.54 in lieu
| Length of service | 7 years 6 months |
|---|---|
| Notice period | 8 weeks |
| Pay in lieu of notice | RM 6,461.54 |
| Days' wages a year | 20 |
| Years counted (to the nearest month) | 7.5 |
| Benefit days | 150 |
| Daily rate (wage ÷ 26) | RM 134.62 |
| Minimum termination benefit | RM 20,192.31 |
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Termination benefit and notice by years of service (RM3,000 a month)
| Years | Notice | Days a year | Benefit days | Benefit |
|---|---|---|---|---|
| 1 | 4 weeks | 10 | 10 | RM 1,153.85 |
| 2 | 6 weeks | 15 | 30 | RM 3,461.54 |
| 3 | 6 weeks | 15 | 45 | RM 5,192.31 |
| 5 | 8 weeks | 20 | 100 | RM 11,538.46 |
| 7 | 8 weeks | 20 | 140 | RM 16,153.85 |
| 10 | 8 weeks | 20 | 200 | RM 23,076.92 |
| 15 | 8 weeks | 20 | 300 | RM 34,615.38 |
| 20 | 8 weeks | 20 | 400 | RM 46,153.85 |
How termination benefits are worked out
- Service from the date you joined to your last day, with a part year to the nearest month.
- Days a year: 10 (under 2 years), 15 (2 to under 5) or 20 (5 or more).
- A day's wages = monthly wages ÷ 26 (ordinary rate of pay).
- Benefit = days a year × years of service × a day's wages.
- Notice: 4, 6 or 8 weeks (or your contract's longer period); pay in lieu ≈ monthly × 12 ÷ 52 per week.
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Termination rules in Malaysia
- Eligibility: at least 12 months' continuous service, ended by the employer (termination, retrenchment, lay-off or closure).
- Not paid on resignation, on retirement at the agreed age, or on dismissal for misconduct after due inquiry.
- RM4,000 threshold: from 1 January 2023 the Act covers all employees, but the minimum termination benefit is guaranteed only to those earning up to RM4,000 a month and to manual workers; others follow their contract.
- Loss of job: PERKESO's Employment Insurance System may pay job search allowances after retrenchment; claim with PERKESO.
Sources
- JTKSM: Termination and Lay-Off Benefits Regulations 1980
- Parliament of Malaysia: Reply on termination benefits
- Employment Act 1955 (Act 265), JTKSM
- Conventus Law: First Schedule Order 2022
- Panda HRMS: Notice period under section 12
Disclaimer: The statutory minimum. Your contract or collective agreement may pay more; for disputes, contact JTKSM or the Industrial Relations Department.
Frequently asked questions
How much termination benefit will I get in Malaysia?
At least 10 days' wages for each year of service if you worked under 2 years, 15 days if 2 to under 5 years and 20 days if 5 years or more. 7 years 6 months on RM3,500 a month gives 20 × 7.5 = 150 days × RM134.62 = RM 20,192.31.
Who is entitled to termination benefits?
Employees with at least 12 months' continuous service who are terminated or laid off, for example in a retrenchment. It is not paid when you resign or are dismissed for misconduct. Non-manual employees earning above RM4,000 a month get what their contract says, as the Act does not set a minimum for them.
What is the notice period under the Employment Act?
Unless your contract says longer: 4 weeks with under 2 years of service, 6 weeks with 2 to under 5 years and 8 weeks with 5 years or more. It applies to both employer and employee.
What is pay in lieu of notice?
Either side can end the contract without serving notice by paying wages for the notice period. With 8 weeks' notice on RM3,500 a month, that is about RM 6,461.54 (RM3,500 × 12 ÷ 52 per week).
How is a part year counted?
Pro rata to the nearest month. 7 years and 6 months counts as 7.5 years; a part month of 15 days or more counts as a month here.
What is a day's wages for termination benefits?
The ordinary rate of pay: monthly wages ÷ 26. On RM3,500 a month it is RM 134.62 a day. Overtime and most allowances are not included.
What is the benefit after 3 years?
15 days' wages a year. 3 years on RM2,600 a month gives 15 × 3 = 45 days × RM100 = RM 4,500.00.
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