PETALING JAYA: There is good news for the average Malaysian worker: the median monthly wage for the formal sector has risen to RM2,864, according to the latest quarterly report from the Statistics Department of Malaysia (DOSM).
This improvement also comes with a positive sign that fewer workers are stuck in the low-income bracket.
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However, a deeper dive into the numbers reveals a persistent and dramatic disparity.
The study, which integrated vast administrative data from EPF and Socso, shows that the distribution of wealth remains heavily skewed.
Just 10% of employees break the RM9,200 monthly ceiling, earning a staggering 5.53 times what the bottom 10% receive.
This detailed report – developed explicitly to confront structural issues like wage compression – offers a crucial look at both the progress and the profound income challenges facing the nation.
The Employee Wages Statistics (Formal Sector) Report for the second quarter of this year (Q2 2025) highlighted a positive trend in median wage growth, which increased 4.3% year-on-year to RM2,864 in June 2025, reflecting a stronger labour market with formal employment reaching 6.97 million.
Despite this, the income disparity remains sharp, with the bottom 10% of employees earning RM1,664 or less, contrasting significantly with the top 10% who command incomes of more than RM9,200.
On a more encouraging note, the report found that the low-income bracket is shrinking: only 10.4% of total formal employees earned monthly wages below RM1,700 in June 2025, a significant reduction of 12.2% from the previous year.
The increase in median wages was not uniform across all sectors or states.
All sectors recorded an increase in median wages during Q2 2025, but the Mining and Quarrying sector recorded both the highest median monthly wage at RM6,500 and the highest annual growth at 10.2%, though it constitutes only 0.6% of formal employees.
In contrast, the agriculture sector, representing 1.9% of formal employees, recorded the lowest median monthly wage at RM2,200, despite seeing a respectable 10.0% year-on-year growth.
Furthermore, a significant geographical gap exists: three states exceeded the national median of RM2,864, with Kuala Lumpur registering the highest median monthly wage at RM4,064, followed by Selangor at RM3,145 and Penang at RM2,927.
Conversely, the lowest median monthly wages were recorded in Kelantan at RM1,764, followed by Perlis at RM1,800, and both Sabah and Kedah at RM2,000.
DOSM chief statistician Datuk Seri Mohd Uzir Mahidin explained this quarterly report series was developed specifically to monitor and address structural issues like wage gaps, wage compression, and limited retirement savings by providing “high-frequency, granular wage statistics.”
However, Mohd Uzir cautioned that the report should not be taken as fully conclusive for the entire workforce due to its specific scope.
The report integrates administrative records from authorities like EPF and Socso, meaning “no sampling was used,” and it primarily covers formal employees (those in the private sector and non-pensionable public employees).
Crucially, the statistics do not cover pensionable public employees or employed persons in informal employment, such as own-account workers and unpaid family workers.
Mohd Uzir said while the results are indicative, they are not strictly comparable to previous sample-based annual surveys.
He added that “to ensure a fair comparison, it is essential to harmonise the definitions” and make adjustments “for purchasing power parity”.
The shift to utilising administrative data allows DOSM to produce more comprehensive and short-term wage and salary statistics, offering a more immediate check on the nation’s wage health than previously possible.
