Should I pay above market to retain top talent?

Only slightly (5-10%). Paying 30%+ above market creates expectation issues. Better to create growth paths through promotions than inflated salaries.

What if my budget is below market?

You have options: increase budget, offer equity (startup), offer flexible benefits (remote, development), or hire junior + develop (lower salary, higher training investment).

When should I review salaries?

Annually, plus when promoting (new role = new band), when company growth changes (raises aligned to revenue), and when market changes (if market rose 10%, consider adjusting).

Should starting salary equal maximum for role?

No. Leave room for growth. New hire at lower end of band (e.g., RM 110K in RM 100K-150K range), with clear path to RM 120K in Year 1, RM 135K in Year 2.

Should we post salary ranges in job postings?

Yes. You'll get 50% more applications, 40% faster hiring, and attract confident candidates who self-select. Format: 'RM 180K-250K based on experience' with bonus/equity if relevant.

Salary Benchmarking Malaysia 2025: What to Pay Your Team

The Salary Problem: Underpay or Overpay?

A startup founder in Kuala Lumpur is hiring her first engineer. She thinks: “How much should I pay?”

Too low: Engineer accepts, but resents salary. Leaves in 6 months. You lose RM 290K+ in bad hire costs.

Too high: Overpay by 30%. You waste RM 60K/year. Over 3 years, that’s RM 180K of unnecessary spend.

The truth: 80% of companies get salary wrong. Either too low (high turnover) or too high (waste).

The Financial Impact of Salary Misalignment

Scenario 1: Underpay

Hire engineer at RM 80K (market is RM 100K)
“Save” RM 20K/year
Engineer leaves at 8 months (better offer elsewhere)
Recruiting cost: RM 40K
Lost productivity: RM 50K
Total cost: RM 90K
Savings disappeared, plus extra cost

Scenario 2: Overpay

Hire engineer at RM 130K (market is RM 100K)
Overpay: RM 30K/year
Engineer stays (likes compensation)
Over 3 years: RM 90K overpaid
But: High retention saves RM 290K × 2 replacements = RM 580K
Net benefit: RM 490K

Lesson: Slightly overpay trusted talent. It’s cheaper than turnover.

Why Salary Benchmarking Matters

1. Attract Quality Candidates

Competitive salary = more applicants
Weak salary = only desperate candidates

2. Reduce Turnover

Underpaid people leave (especially strong performers)
Overpaid people stay (but less motivated)
Market-rate people are happy and stay

3. Build Culture

If salaries are secret, people assume unfairness
Transparent salaries build trust
Equity perception matters

4. Negotiation Speed

Know your range upfront
Candidate knows their range upfront
Faster negotiation (both sides know constraints)

5. Budget Planning

Plan recruiting budget accurately
Allocate resources across team
Avoid salary compression (new hire earns more than senior person)

2025 Malaysia Salary Data: By Role

Technology Roles

Junior Software Engineer (0-2 years)

Experience	Salary Range	Bonus	Total Comp
0-1 year	RM 48K-65K	0-10%	RM 50K-72K
1-2 years	RM 60K-75K	5-15%	RM 63K-86K

Market context: Entry-level roles in KL/Selangor. First programming job. Companies invest in training.

Negotiation: Limited. Market is competitive; many candidates at this level.

Mid-Level Software Engineer (2-5 years)

Experience	Salary Range	Bonus	Total Comp
2-3 years	RM 75K-95K	10-20%	RM 83K-114K
3-5 years	RM 95K-130K	15-25%	RM 109K-163K

Market context: Proven ability to ship features. Can mentor juniors. Leadership path emerging.

Negotiation: Moderate-high. Strong candidates have options (Singapore, startups, FANG companies).

Senior Software Engineer (5-10 years)

Experience	Salary Range	Bonus	Total Comp
5-7 years	RM 130K-180K	20-30%	RM 156K-234K
7-10 years	RM 180K-250K	25-35%	RM 225K-338K

Market context: Trusted technical lead. Owns complex systems. Mentors team. Makes architectural decisions.

Negotiation: High. Best candidates are passive (not job hunting). Singapore constantly recruiting.

Staff/Principal Engineer (10+ years)

Experience	Salary Range	Bonus	Total Comp
10+ years	RM 250K-400K+	30-40%	RM 325K-560K+

Market context: Deep expertise. Company strategy maker. Rare in Malaysia; often recruited regionally.

Negotiation: Very high. Can negotiate equity, role scope, etc.

Product & Design Roles

Junior Product Manager (0-2 years)

Experience	Salary Range	Bonus	Total Comp
0-1 year	RM 60K-75K	10-15%	RM 66K-86K
1-2 years	RM 75K-90K	15-20%	RM 86K-108K

Mid-Level Product Manager (2-5 years)

Experience	Salary Range	Bonus	Total Comp
2-3 years	RM 90K-120K	15-25%	RM 104K-150K
3-5 years	RM 120K-160K	20-30%	RM 144K-208K

Senior Product Manager (5-10 years)

Experience	Salary Range	Bonus	Total Comp
5-7 years	RM 160K-210K	25-35%	RM 200K-285K
7-10 years	RM 210K-300K	30-40%	RM 273K-420K

UX/UI Designer

Level	Salary Range	Bonus	Total Comp
Junior (0-2 yrs)	RM 55K-70K	10-15%	RM 61K-81K
Mid-level (2-5 yrs)	RM 75K-110K	15-25%	RM 86K-138K
Senior (5+ yrs)	RM 120K-180K	20-30%	RM 144K-234K

Sales & Business Development

Account Executive / Sales Representative

Experience	Salary Range	Commission	Total Comp
0-2 years	RM 40K-60K	15-30% of salary	RM 55K-95K+
2-5 years	RM 60K-100K	30-50% of salary	RM 90K-185K+
5+ years	RM 100K-180K	50-100% of salary	RM 150K-360K+

Note: Commission varies hugely by company and quota. Top performers can 2-3x base salary.

Sales Manager

Experience	Salary Range	Bonus	Total Comp
0-2 years	RM 80K-110K	20-35%	RM 96K-149K
2-5 years	RM 110K-180K	30-45%	RM 143K-261K
5+ years	RM 180K-280K	40-60%	RM 252K-448K

Finance & Operations

Junior Accountant / Finance Associate (0-2 years)

Experience	Salary Range	Bonus	Total Comp
0-1 year	RM 45K-60K	5-10%	RM 47K-66K
1-2 years	RM 60K-75K	10-15%	RM 66K-86K

Finance Manager / Senior Accountant (2-5 years)

Experience	Salary Range	Bonus	Total Comp
2-3 years	RM 75K-100K	10-20%	RM 83K-120K
3-5 years	RM 100K-150K	15-25%	RM 115K-188K

Senior Finance Manager / Controller (5-10 years)

Experience	Salary Range	Bonus	Total Comp
5-7 years	RM 150K-210K	20-30%	RM 180K-273K
7-10 years	RM 210K-300K	25-35%	RM 263K-405K

Chief Financial Officer / VP Finance (10+ years)

Experience	Salary Range	Bonus	Total Comp
10+ years	RM 280K-450K	30-50%	RM 364K-675K

Operations Manager

Experience	Salary Range	Bonus	Total Comp
Junior (2-3 yrs)	RM 60K-80K	10-15%	RM 66K-92K
Mid-level (3-5 yrs)	RM 80K-120K	15-25%	RM 92K-150K
Senior (5+ yrs)	RM 120K-200K	20-30%	RM 144K-260K

HR & Recruiting

HR Executive / Recruiter (0-3 years)

Role	Salary Range	Bonus	Total Comp
Recruiter (0-2 yrs)	RM 45K-65K	10-20%	RM 50K-78K
HR Executive (0-2 yrs)	RM 50K-70K	10-15%	RM 55K-81K

HR Manager / Senior Recruiter (3-5 years)

Role	Salary Range	Bonus	Total Comp
Senior Recruiter (3-5 yrs)	RM 65K-95K	15-25%	RM 75K-119K
HR Manager (3-5 yrs)	RM 80K-120K	15-25%	RM 92K-150K

HR Director / VP HR (5+ years)

Role	Salary Range	Bonus	Total Comp
HR Director (5+ yrs)	RM 150K-250K	25-35%	RM 188K-338K

Executive / C-Level

Role	Salary Range	Bonus	Equity (Startups)	Total Comp
CEO	RM 350K-600K	30-50%	0.5-2.0%	RM 455K-900K+
CFO	RM 280K-450K	25-40%	0.2-1.0%	RM 350K-630K
CTO	RM 250K-400K	20-35%	0.2-1.5%	RM 300K-540K
CMO	RM 200K-350K	20-30%	0.1-0.5%	RM 240K-455K
COO	RM 250K-400K	25-40%	0.2-1.0%	RM 313K-560K
VP Engineering	RM 200K-350K	20-35%	0.1-0.5%	RM 240K-473K

Note: Startup equity varies by stage. Series A gets more than Series B+. Founder-level can get 5%+.

Salary by Company Size & Stage

Compensation varies by company stability and stage:

Company Stage	Salary Position	Bonus	Equity	Why Different
Startup (< RM 10M ARR)	Market-10%	10-20%	0.1-2.0%	Lower cash; compensate with equity upside
Growth (RM 10M-100M ARR)	Market	15-30%	0.05-0.5%	Growing revenue; less equity dilution
Scale (RM 100M-500M)	Market+	20-40%	0-0.2%	Stable revenue; less need for equity
Enterprise (500M+)	Market+	30-50%	0-0.1%	Very stable; compete on stability & benefits

Implication: If you’re a startup, can’t match enterprise salary. Compensate with equity, culture, impact.

Salary by Location in Malaysia

Compensation varies by city (KL leads; others are 10-20% lower):

Location	Salary Index	Notes
Kuala Lumpur	100% (baseline)	Highest cost of living; most tech jobs; highest salaries
Selangor (Petaling Jaya, Subang)	95%	Close to KL; slightly lower
Shah Alam	90-95%	Further out; still competitive
Penang	85-90%	Growing tech hub; lower cost; 10-15% below KL
Johor Bahru	80-85%	Smaller market; limited opportunities; 15-20% below KL
Klang Valley (outside PJ/Subang)	85-90%	Suburban; lower costs
Cyberjaya	95-100%	Tech hub; close to KL salaries

Example: Senior Engineer in KL: RM 180K-250K. Same role in Penang: RM 155K-215K.

Regional Comparisons: Malaysia vs. Singapore, Thailand, Vietnam

Salary Comparison (Senior Engineer Role)

Location	Salary	Cost of Living Index	”Effective” Salary
Kuala Lumpur, Malaysia	RM 180K-250K (USD 45-62K)	100	100%
Singapore	SGD 180K-260K (USD 135-195K)	180	180%
Bangkok, Thailand	THB 1.8M-2.4M (USD 50-67K)	90	105%
Ho Chi Minh, Vietnam	VND 1.8B-2.4B (USD 28-38K)	70	85%

Key insight: Singapore pays 3x Malaysia (absolute salary) but costs 1.8x more. Real difference: 1.7x effective salary.

For Malaysia talent: Singapore offers 40-50% higher salary, but higher cost of living and visa uncertainty. Some move; some stay for stability and quality of life.

For other regions: Malaysia is competitive. Attracts talent from Thailand, Vietnam, India with stability + better salary than home country.

Benefits Benchmarking (Beyond Base Salary)

Salary isn’t everything. Total compensation includes benefits:

Health Insurance

Basic: Company pays employee health insurance (medical, dental, vision)
Good: Company pays for employee + dependent coverage
Excellent: Plus wellness programs, mental health, gym stipend

Market: 70% of companies offer health insurance. Good to excellent: 30%.

Typical cost to company: RM 3K-8K/employee/year

Annual Bonus

Base: 0-10% (small companies, startups)
Standard: 10-20% (most companies, tied to performance)
Competitive: 20-40% (growth companies, sales roles)
Top-tier: 40-60% (finance, tech, fintech)

Typical: RM 5K-40K depending on role and company performance.

Paid Time Off

Minimum: 18 days annual leave (Malaysia legal minimum)
Standard: 20 days annual leave + public holidays
Competitive: 22-24 days + flexible
Excellent: 25+ days + flexible work, parental leave

Typical: 18-20 days annual leave. Parental leave varies.

Professional Development

None: No budget
Basic: RM 500-1000/year per employee
Standard: RM 2000-3000/year per employee
Competitive: RM 3000-5000/year per employee
Excellent: RM 5000+/year + conference sponsorship + training time

Typical: Tech companies offer RM 2K-3K. Others: RM 500-1500.

Remote/Flexible Work

None: Full office, fixed hours
Some: 1-2 days/week remote, fixed hours
Flexible: 3+ days/week remote, flexible hours
Full remote: 100% remote, flexible hours

Trend: Post-COVID, 60% of companies offer hybrid. 30% full remote. 10% office-only.

Impact on salary: Remote roles 10-15% lower (lower cost of living justification). Flexible commands premium 5-10%.

None: No equity offered
Startups: 0.05-2.0% for senior hires
Growth companies: 0.01-0.5% for senior hires
Established: Rarely offered; if offered: phantom equity or ESOP

Typical: Only startups/growth companies offer. RM 100K salary + 0.1-0.5% equity is compelling.

Salary Negotiation Framework

When candidate says “I want RM 120K” and you budgeted RM 100K:

Step 1: Understand Their Logic

Ask: “Help me understand. What’s the basis for RM 120K?”
Listen: Previous salary? Market research? Expat expectations?

Step 2: Assess Flexibility

Range: Is RM 120K a bottom line or starting point?
Ask: “What would work for you? What’s your range?”

Step 3: Know Your Constraints

Budget: RM 100K max. Is there flexibility?
Precedent: Are other engineers at this level at RM 100K? Can you compress salary?
Market: Is RM 100K below market (then you need to increase budget) or above?

Step 4: Find Middle Ground

Option A: Meet in middle

Their ask: RM 120K
Your budget: RM 100K
Compromise: RM 110K
Both slightly unhappy, but livable

Option B: Adjust compensation structure

Base: RM 100K (your budget)
Bonus: 20% = RM 20K (total RM 120K if achieved)
Equity: 0.2% (potential upside)
Total potential: RM 120K+ if they perform

Option C: Other benefits

Base: RM 100K
Cash: Add RM 5K/year ($250K every 6 months instead of annual)
Benefits: Extra parental leave, education budget, home office setup
Flexibility: Extra remote days
Total compensation improvement: RM 100K + benefits = competitive

Option D: Professional development

Base: RM 100K (your budget)
Professional development: RM 5K/year (leadership program, certification)
Conference: Annual conference budget
Mentorship: Direct mentorship from VP/CEO
Path to RM 120K: In year 2 after demonstrating value

Step 5: Set Clear Expectations

If they accept RM 100K: “We believe you’re worth more. Let’s revisit in 6 months after you’ve proven impact.”
Communicate: Performance milestones that unlock raises
Be honest: “We can’t go to RM 120K right now, but here’s what we can do…”

Step 6: Close

Best case: They accept your offer (RM 110K or RM 100K + benefits).

Okay case: They ask for time to think. Give 24-48 hours.

Worst case: They decline and take other offer. Don’t get into bidding war. Let them go professionally.

Salary Compression Problem: How to Avoid It

Scenario: You hire new engineer at RM 110K. Your existing senior engineer at same level is at RM 100K (hired 2 years ago).

New hire makes more. Senior person finds out. Team resentment builds.

How to Avoid:

Option 1: Adjust existing salary

Raise senior engineer to RM 110K
Costs: RM 10K
Benefit: Team trust maintained
Worth it

Option 2: Explain logic

“Market rates increased. New hire is at market rate.”
“Senior engineer has skills beyond market (internal knowledge)”
Doesn’t work. People resent it anyway.

Option 3: Create structured pay bands

Define salary band for each level (e.g., Senior Engineer: RM 95K-130K)
New hires go in at lower band (RM 95K-110K)
Existing employee stays where they are (within band)
Raises based on performance, not new hire comparison

Best practice: Build pay bands upfront. Avoid compression issues.

Salary Transparency: To Post or Not?

Question: Should you post salary ranges in job postings?

Answer: Yes, increasingly. Here’s why:

Benefits of Salary Transparency

For candidates:

Self-selection (don’t apply if range below expectations)
Faster negotiation (both sides know constraints)
Reduced bias (women, minorities apply more when salary posted)

For companies:

50% more applications (when salary posted)
40% faster hiring (less negotiation back-and-forth)
Attracts confident candidates (weaker candidates self-select out)
Builds trust (transparency shows confidence)

How to Post Salary Ranges

Format:

“Salary: RM 180K-250K based on experience”

“Compensation: RM 200K base + 20% bonus + 0.1-0.2% equity (for startup)”

Best practice:

Post ranges (not single number)
Show bonus/equity if relevant
Note: “Based on experience and qualifications”
Update annually (market changes)

2025 Salary Trends in Malaysia

Trend 1: Tech Salaries Rising Faster

Tech roles: +8-12% annually
Non-tech: +3-5% annually
Reason: Talent shortage, competition from Singapore/India

Trend 2: Bonus Becoming Standard

Pre-2020: Bonus was perk (20-30% of companies)
2025: Bonus is standard (70%+ of companies)
Typical: 15-20% for non-sales roles

Trend 3: Equity Expectations Increasing

Startups: Equity expected; candidates demand it
Growth companies: Equity becoming expected (ESOP programs)
Trend: Equity as retention tool; moving beyond startups

Trend 4: Benefits Differentiation

Salary convergence (hard to differentiate on salary)
Companies differentiating on benefits (remote, flexibility, wellness)
Winning: RM 100K + flexibility + learning budget > RM 120K office-only

Trend 5: Singapore Talent Returning

Singapore salaries plateauing; cost of living rising
Malaysia (Kuala Lumpur) becoming attractive alternative
Impact: More supply of quality talent; less competitive salary pressure

Trend 6: Skill-Based Pay Emerging

Pay for skills/certification (cloud certifications, data science)
Less based on years of experience
Future: “Senior” title less relevant than skills

Salary Benchmarking Checklist

Before you make a hiring offer:

Key Takeaways

Market rates matter. Underpay = turnover. Overpay = waste. Market-rate = stable.
Slight overpay is better. RM 5K-10K overpay saves RM 290K+ in turnover costs.
Total compensation matters. Salary + bonus + equity + benefits = total package.
Transparency builds trust. Post salary ranges. Be honest in negotiations.
Location matters. KL salaries highest; other cities 10-20% lower.
Stage matters. Startups: equity compensates for lower salary. Enterprise: stability compensates.
Negotiation is normal. Have bottom-line, but be flexible (bonus, equity, benefits).
Avoid salary compression. New hire earning more than senior person = resentment.
Benefits are part of comp. RM 100K + flexibility + learning > RM 120K office-only.
Update annually. Market changes. Review salaries every year.

Ready to Benchmark Your Salaries?

Competitive compensation attracts and retains top talent. Get it right, and you’ll build a stronger team.

Book a Free Consultation — We’ll help you benchmark salaries for your roles and build competitive compensation packages.

Or explore our Talent Acquisition Services — We partner with you on sourcing, screening, and salary negotiation. Your budget + our market knowledge = better hiring outcomes.