Commission-only staff in Malaysia: minimum wage, EPF, SOCSO, EIS and PCB
Commission-only pay is legal in Malaysia, but it doesn't switch off the minimum wage or statutory contributions. Here's how to run it properly.
Sales agents, property negotiators, insurance and car sales staff are often paid wholly or mostly on commission. That's allowed in Malaysia — but two rules catch employers out: the minimum wage still applies to commission-only staff, and commission is wages for EPF, SOCSO and EIS. This guide explains both, with worked examples.
General guidance
This guide summarises the rules as at November 2026. For disputes or unusual arrangements (agents who may be independent contractors, overseas commission, deferred commission), take advice from an employment lawyer or tax adviser.
Does the minimum wage apply to commission-only staff?
Yes. The Minimum Wages Order 2024 (P.U.(A) 376/2024) sets the minimum wage at RM1,700 a month, and says that employees paid wholly on a piece-rate, tonnage, task, trip or commission basis must receive a monthly wage of not less than RM1,700 (Bernama, Skrine). It has applied to all employers since 1 August 2025, covers foreign workers, and excludes domestic workers. Not paying it is an offence, with a fine of up to RM10,000 for each employee.
In practice: if an employee's commission for the month is below the minimum wage, the employer must top up the difference.
| Month | Commission earned | Top-up needed | Total wages paid |
|---|---|---|---|
| September | RM 4,200 | RM 0 | RM 4,200 |
| October | RM 1,050 | RM 650 | RM 1,700 |
| November | RM 0 | RM 1,700 | RM 1,700 |
The floor is rising
Budget 2027 announced a minimum wage of RM2,000 from June 2027, with MSMEs below RM50 million annual sales exempted. Once the new order is gazetted, the top-up threshold for non-exempt employers rises with it. See what RM2,000 costs.
Some commentary describes the RM1,700 as a "basic" wage for commission earners. The gazetted wording ties it to the employee's total monthly wage, so a commission-only arrangement is fine as long as total wages reach the minimum. Many employers prefer a small basic plus commission instead, which makes budgeting and contributions simpler.
EPF, SOCSO and EIS on commission
Commission is wages for all three schemes, so contributions are calculated on it like salary:
- EPF (KWSP): commission is subject to EPF. For a Malaysian under 60, the employee pays 11% and the employer 13% (wages of RM5,000 or less) or 12% (above RM5,000). See KWSP.
- SOCSO and EIS (PERKESO): commission counts as wages for contributions, up to the RM6,000 wage ceiling.
- Top-ups count too. A minimum-wage top-up is wages, so contributions apply to the full amount paid.
Because commission varies, contributions vary month to month — a good reason to calculate them in payroll software rather than a fixed spreadsheet.
PCB (monthly tax deduction) on commission
LHDN's computerised PCB method treats commission in one of two ways:
- Commission paid every month (a variable amount paid monthly) is normal remuneration, and PCB is calculated on it each month like salary. An employee paid only commission is taxed on it as normal remuneration.
- Commission not paid monthly — quarterly, half-yearly or as a lump sum — is additional remuneration. PCB is worked out on the year's tax with and without the payment, and the difference is deducted that month, as for a bonus.
See LHDN's 2026 MTD specification.
HRDF levy
The HRD Corp levy is calculated on basic wages plus fixed allowances (HRD Corp levy guideline). Variable pay is outside that base, so commission is generally not levied — but the guideline doesn't name commission explicitly, so confirm with HRD Corp if commission is a large part of your wage bill.
Worked example
Aiman is a Malaysian sales executive, aged 32, paid commission only.
| October | November | |
|---|---|---|
| Commission earned | RM 1,050 | RM 3,600 |
| Minimum-wage top-up | RM 650 | RM 0 |
| Wages paid | RM 1,700 | RM 3,600 |
| EPF employee (11%) | about RM 187 | about RM 396 |
| EPF employer (13%) | about RM 221 | about RM 468 |
| SOCSO and EIS | on RM 1,700 | on RM 3,600 |
| PCB | on RM 1,700 (normal remuneration) | on RM 3,600 (normal remuneration) |
EPF figures are approximate; actual amounts follow the EPF Third Schedule.
Checklist for commission-only staff
- The contract states the commission scheme clearly, and that wages will not fall below the minimum wage.
- Each month, compare commission with the minimum wage and pay a top-up if needed.
- Run EPF, SOCSO and EIS on commission and any top-up.
- Classify commission correctly for PCB: monthly (normal) or periodic (additional).
- Keep commission statements with the payroll records.
How altomateHR handles commission pay
- RM 0 basic is supported. The salary-change import accepts a New Salary of 0 for staff paid only commission, and moving someone off or onto RM 0 is recorded in their salary history.
- Monthly commission by Excel. Upload each month's commission sheet with the bulk payroll upload instead of keying it in.
- Statutory calculations — EPF, SOCSO, EIS and PCB — run on the actual commission paid each month.
- Xero posting works for commission-only runs, including months where unpaid leave is more than the basic.
altomateHR doesn't decide your commission policy: check each commission-only employee's total against the minimum wage and add any top-up as a pay item in that month's run.
FAQ
Can I pay an employee commission only in Malaysia?+
Yes, but under the Minimum Wages Order 2024 an employee paid wholly on commission must still receive a monthly wage of at least RM1,700. If commission falls short, the employer tops it up.
Is commission subject to EPF?+
Yes. Commission is wages for EPF, so employee and employer contributions apply to it. It also counts as wages for SOCSO and EIS.
How is PCB calculated on commission?+
Commission paid every month is treated as normal remuneration. Commission paid quarterly or as a lump sum is additional remuneration, and PCB is worked out like a bonus.
Does the HRDF levy apply to commission?+
The levy is based on basic wages and fixed allowances, so variable commission is generally outside it. Confirm with HRD Corp if commission is a large part of pay.
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