KUCHING: Malaysian employers raised salaries and paid bonuses averaging nearly two months in 2025, with further increases expected in 2026, according to the Malaysian Employers Federation (MEF).
Citing the MEF Salary Survey for Executives and Non-Executives 2025, MEF president Datuk Dr Syed Hussain Syed Husman said most companies adjusted salaries upward this year.
“The 2025 survey reveals that nearly 90 per cent of companies granted salary increases to both Executives and Non Executives. The average salary adjustments awarded in 2025 were 5.03 per cent for Executives and 4.65 per cent for Non Executives.
“Employers are forecasting a slight upward trend in 2026, with projected increases of 5.33 per cent for Executives and 5.01 per cent for Non Executives.
“Performance remains the primary determinant of salary increases, followed by company financial capacity and annual review cycles,” he said.
Bonuses remained widely distributed. “A total of 82 per cent of companies awarded bonuses in 2025. The average payouts were 2.17 months for Executives and 1.96 months for Non Executives.
“This trend is expected to continue into 2026, with forecasted average bonuses of 2.16 months for Executives and 2.02 months for Non Executives,” he added.
Syed Hussain said the surveys also show that employers are still in the early stages of artificial intelligence adoption despite growing awareness.
“A total of 74.1 per cent of employers reported being somewhat familiar with AI.
“However, actual adoption remains moderate, with 37.3 per cent having implemented AI tools, 19.1 per cent planning to adopt AI within 12 months, 17.6 per cent remaining unsure and 26 per cent yet to begin adoption.
“Key barriers include high implementation costs at 67.8 per cent, limited internal expertise at 66.7 per cent, and cybersecurity and ethical concerns at 53.0 per cent,” he said.
He noted that confidence in the country’s AI talent pool also remains limited. “Only 16.5 per cent of employers believe Malaysia has sufficient AI talent. One-third feel the talent pool is inadequate, while more than half are unsure, highlighting the pressing need to accelerate digital skills development,” he said.
On healthcare, Syed Hussain said rising medical costs and workplace stress are reshaping employer benefits.
“Insights from the MEF Medical Benefits Survey 2025, covering 231 companies, show that 68 per cent of employers expect medical costs to increase over the next year.
“In response, employers are intensifying their focus on preventive care, including health awareness initiatives at 70.7 per cent, wellness and disease-prevention programmes at 58.5 per cent, and biometric screening at 39.5 per cent.
“Mental health remains a significant concern, with 74 per cent of employers citing workplace stress and pressure to meet targets as the main issues affecting employees,” he said.
He added that wage-setting continues to be driven by company performance and individual contribution.
“MEF’s review of 236 Collective Agreements across 36 industries shows that company performance (80.1 per cent) remains the dominant factor in across-the-board adjustments, followed by individual performance (64.5 per cent).
“For 2024, the average across-the-board adjustment stood at 5.06 per cent, signalling a continued, steady post-pandemic wage recovery,” he said.
