Last Friday (11th October) was a particularly important day for Malaysia as Budget 2020 was tabled with a total of RM297.02 billion.
Centred around the theme ‘Driving Growth and Equitable Outcomes Towards Shared Prosperity’, the budget was particularly keen on investing in Malaysians from education to health and employment.
While you may have read about incentives for budding entrepreneurs, what about the average working Malaysian?
Fret not, we’ve gone through the entire budget and here are 15 things Malaysian employees need to know about Budget 2020.
1. Increased minimum wage
From 2020 onwards, the minimum wage at major cities will be raised to RM1,200 from RM1,100. However, the RM1,100 minimum wage remains for non-urban centres.
2. RM500 monthly incentive for employed graduates
Through Graduates@Work, graduates who have been unemployed for over 12 months will receive a RM500 wage incentive once they secure a job. This amount will be given every month for 2 years of employment.
3. Increased maternity leave to 3 months
Probably one of the most welcome news is the increased maternity leave from 60 days to 90 days. Working mothers now have 3 months after delivery to care for their new-born and recover from childbirth. This comes into effect from 2021 onwards.
4. RM500 monthly incentive for women returning to work
Through Women@Work, the government plans to create 33,000 jobs for women who’ve left the workforce. Hence, women between 30 and 50 years old who have stopped working for over 12 months will receive RM500 for coming back to the workforce. This amount will be given every month for 2 years of employment.
5. Tax exemption extension for women returning to work
Another piece of good news for women looking to re-join the workforce is tax exemption until 2023.
6. Withdraw from EPF for fertility treatment
A new EPF withdrawal has been announced for couples who need the money for fertility treatments such as in-vitro fertilisation (IVF).
7. Income tax exemption for fertility treatments
Couples who undergo fertility treatments can now be exempt from paying income tax up to RM6,000.
8. Withdraw from EPF for professional certificates
While the Employees Provident Fund (EPF) allows for savings withdrawal for education before, the scope is now expanded to certificate level qualifications, particularly in the fields related to Industry 4.0 (IR4.0) – such as automation of manufacturing processes, computers and technology.
9. Upskill with HRDF coverage for professional certifications
With a RM20 million fund, plus RM20 million matched by the Human Resources Development Fund (HRDF), more professional certification examinations (in fields related IR4.0) will be covered for working adults to upskill themselves.
10. RM350-RM500 monthly incentive for locals who replace foreign labourers
Malaysians who replace foreign workers in low skilled jobs (eg: F&B and factory work) will receive a monthly incentive from RM350 to RM500, depending on the sector.
11. Nurseries for employee’s children (civil service)
Working parents in the civil service concerned about leaving their young ones alone at home, or simply cannot afford the exorbitant fees of nurseries can now breathe a sigh of relief as government buildings will soon have nurseries.
12. Employees can redeem accumulated leaves as replacement pay earlier (civil service)
Those in the civil service can now redeem their accumulated leaves as replacement pay much earlier. Civil servants who have served at least 15 years can cash up to 75 days of leave.
13. RM50 increase for cost of living allowance (civil service)
In line with the rising cost of living, civil servants’ cost of living allowance (COLA) will be increased by RM50 from 2020 onwards.
14. RM500 for civil service employees
Those who are working in the civil service will receive a RM500 special payment. This is only for civil servants at Grade 56 and below.
15. Monthly RM100 incentive TVET interns/Apprentices
Those undergoing Technical and Vocational Education and Training (TVET) -such as vocational college, technical institute and polytechnic students- will receive a RM100 monthly allowance during their apprenticeships. FYI this RM100 is an addition to the existing allowance for trainees.
