Malaysia EP 2026 Changes: Action List for Japanese Restaurants

Malaysia's Employment Pass salary policy changed on 1 June 2026: minimum basic salaries roughly doubled by category, only basic salary counts, and from 1 January 2027 a succession plan becomes mandatory for Categories II and III. If you already employ a Japanese chef, nothing changes until their next renewal, which is assessed under the new rules. This page is the Japan side of that change: what to decide this week, how to restructure pay without an accountant's final numbers, what the chef prepares, and how Malaysian pay compares with Japan.

1. What to decide this week

1. List every EP holder's renewal date and current basic salary. Anyone below the new floor for their category needs a restructured contract before that date, not after.
2. Restructure pay towards basic salary, using the worked example below as a starting point, then confirm the final on-cost with a local accounting firm before you sign anything.
3. Start a named succession plan for every Category II and III position now, even though the requirement only bites from 1 January 2027. Evidence collected from month one is worth more at renewal than a plan written the week before filing.
4. Set new hire budgets on basic salary alone, and check the offer against what the chef earns in Japan today using the comparison below, not only against the RM5,000 floor.

2. What changed on 1 June 2026

• Higher minimum salaries, roughly doubled in each category.
• Assessed on basic salary only: allowances, incentives, bonuses and salary paid outside Malaysia do not count.
• A cap on cumulative years with the same employer, position and category.
• Dependants now allowed in Category III, previously not.
• Succession plan mandatory for Categories II and III from 1 January 2027.

Every application submitted on or after 1 June 2026, including renewals, is assessed under the new policy.

3. The criteria by category

The employment period counts from the date the first EP in that category was approved and is tied to the employing company; it restarts if the chef moves company or changes category. Family who can accompany the holder are a spouse and children under 18 on a Dependant Pass, and parents, parents-in-law, children aged 18 to 25 and common-law spouses on a Long-Term Social Visit Pass.

4. Moving an allowance into basic salary: one example

Take a chef currently paid RM4,000 basic plus a RM1,500 housing allowance, RM5,500 in total. The basic salary alone fails the Category III floor of RM5,000. Roll the whole allowance into basic salary, keeping the total unchanged, and every downstream number moves with it.

The EPF and SOCSO increase here is small, about RM56 a month combined. Overtime is the bigger, harder to predict number: if the chef regularly works paid overtime, the bill for those hours rises by the same proportion as basic salary did. Tax withholding also moves, since more of the pay is now salary rather than a housing benefit some employers use to defer tax. None of this is a reason to skip restructuring; the floor is not optional from 1 June 2026. It is a reason to run your actual headcount and hours through a local accounting firm before signing new contracts, rather than assuming EPF and SOCSO are the whole story.

5. Documents the chef prepares in Japan

Send this to the candidate:

6. Steps on the Japan side, week by week

Week 0 is the first shift in Malaysia. The Malaysia side of the calendar (company registration, Labour Department clearance, the EP application itself) is on our Malaysia hiring page; this is what runs in parallel on the Japan side.

Japan and Malaysia have no bilateral social security agreement (the Japan Pension Service lists 24 agreements in force as of 2 March 2026, none with Malaysia), so a chef hired locally keeps a public pension only through voluntary Japanese National Pension membership. For secondment terms from a Japanese head office rather than a local hire, see the overseas secondment contract guide (Japanese).

7. Malaysia pay against Japan pay

Yen figures use RM1 = ¥38.97, from Bank Negara Malaysia's 25 September 2026 reference rate (RM2.5663 per 100 yen).

The Category III floor, on its own, converts to less than the Japanese average for a cook: a candidate will read RM5,000 as roughly two thirds of what they already earn, before cost of living, tax and housing. Category II clears the Japanese average with room to spare. At the Category III floor, sell what the chef can check for themselves: lower cost of living, any housing support, and family accompaniment now allowed under Category III. See sushi chef salary by country for other Asian markets, designing pay for chefs abroad (Japanese) for the whole package, and the cost of hiring Japanese cuisine staff abroad for full cost.

8. The succession plan: what it must show

The official material gives the purpose, upskilling local employees during the EP holder's tenure, but not a prescribed format. Our Malaysia hiring page has a ready copy-paste template for one position. Across a group with several EP holders, build the plan at the level ESD is likely to check it: by position and outlet, not as one company-wide paragraph.

• Named local successor(s) per EP position, current station and date joined, not just "local staff in training".
• Staged skill milestones with target dates: fish handling, rice and vinegar work, dashi and sauces, menu planning, ordering and cost control, in the order your kitchen actually teaches them.
• Training method named rather than left implicit: daily on the job, a weekly session, or an external or Japan-based course.
• Evidence kept as you go: a monthly log signed by both the EP holder and the trainee, a skills checklist, dated photos of test dishes, so renewal shows a record, not a promise.
• A named reviewer and cadence, typically the owner or GM, quarterly, so the plan stays a living document.

The cumulative cap for Category III is 5 years. Decide from the day you hire which position local staff will hold at the end of that period. For methods, see training local staff in Japanese cuisine and the programme for developing Japanese food culture talent.

9. Chefs already working for you

• Existing EPs remain valid until expiry; nothing to do before then.
• Transfers of the remaining period or of endorsement keep the existing category's conditions.
• Renewal applications from 1 June 2026 are assessed under the new criteria. A chef on the old Category III at RM3,500 basic needs at least RM5,000 at the next renewal, restructured as in section 4.

Compared with Singapore, Malaysia has no points system and no levy, but the system is now managed through a minimum basic salary and a cap on years. For Singapore in detail, see Singapore EP and S Pass.

General information prepared after checking material published by the Immigration Department of Malaysia, MOTAC, Bank Negara Malaysia and the Japan Pension Service as of 27 September 2026. It is not legal, tax or immigration advice. Operational details may change and EPF, SOCSO and overtime calculations depend on your actual payroll structure. Check with ESD/MYXpats and a licensed local accountant before acting.