LABOUR COST IN MALAYSIA 2016 Final Report - National Labour Cost Survey 2016 (F | Page 40

3.3.7 Total Labour Cost
As outlined in Figure 3-10: Definition of Labour Cost, the computation of total labour cost
factored in the wage cost and non-wage cost. Wage cost includes the basic wage, cash allowance,
commission, OT payment, EPF, SOCSO, other pension fund and bonus. Meanwhile, non-wage
cost covers the HRDF, facilities and benefits, SPPA, severance payment and recruitment cost. The
computation of total labour cost reported here factored in all of these cost components except
for severance payment and recruitment cost under non-wage cost because:
i.
ii.
Less than 3% of establishments profiled in this survey made severance payment in 2015
Average recruitment cost per employee could not be accurately estimated due to
insufficient data
It is important to note that a key assumption made in the computation of average total labour
cost per employee is that all employees in the establishments profiled were entitled to the cash
allowance, commission, OT payment, other pension fund, bonus and facilities / benefits
provided. Please refer to Appendix 1 for detailed explanation on other assumptions made and
limitations in the computation of total labour cost.
The wage cost represents a large percentage (80% – 95%) of total labour cost. Within wage cost,
basic wage constitutes the highest cost. Total labour cost per full-time Malaysian employee per
month in 2016 (at the national level across all job categories, industries, regions and
establishment sizes) was estimated to be RM6,834. The breakdown of the average total labour
cost per full-time employee by each component is shown in Table 3-3.
National Labour Cost Survey 2016: Final Report
37