LABOUR COST IN MALAYSIA 2016 Final Report - National Labour Cost Survey 2016 (F | Page 19

2.3
Total Labour Cost
Labour cost refers to the total cost incurred by the employer in the employment of labour. Total
labour cost includes wage and non-wage cost components.
Figure 2-1: Labour cost components
The computation of total labour cost reported here factored in all the above components except
for severance payment and recruitment cost under non-wage cost because:
i. Less than 3% of establishments profiled in this survey made severance payment in 2015
ii. Average recruitment cost per employee could not be accurately estimated due to
insufficient data
It is also important to note that a key assumption made in the computation of average labour
cost per employee is that all employees in the establishments profiled were entitled to the cash
allowances, commission, overtime payment, other pension funds, bonus and facilities / benefits
provided.
National Labour Cost Survey 2016: Final Report
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