Employment Act · 2026 Revised Edition · Part · Payment of Salaries
40. Payment on termination by employee
In plain English
Not legal advice
An employee who resigns with the required notice must be paid all salary due on their last day. An employee who resigns without that notice, or before it runs out, must be paid within 7 days of leaving. The employer may deduct any sum the employee owes in place of notice, unless a court or the commissioner orders otherwise.
Summary · Drafted with AI, checked against the official text on 30 Sep 2026.
Official textFrom Attorney General's Chambers, unchanged
Subject to the provisions of this Act, the total salary due to an employee who terminates his contract of service with his employer under section 26, or after giving prior notice to the employer as required under section 22, shall be paid to him on the day on which the contract of service is terminated.
salary
“salary” means all remuneration including allowances payable to an employee in respect of work done under his contract of service, but does not include — (a) the value of any accommodation or the supply of any food, fuel, electricity, water or medical attendance, or of any amenity or service excluded by order of the Minister published in the Gazette; (b) any contribution paid by the employer on his own account to any pension fund or provident fund; (c) any travelling allowance or the value of any travelling concession; (d) any sum paid to the employee to reimburse him for special expenses incurred by him in the course of his employment; (e) any gratuity payable on discharge or retirement; and (f) any retrenchment benefit payable on retrenchment;
Subject to the provisions of this Act, the total salary due to an employee who —
employee
“employee” means a person who has entered into or who works under a contract of service with an employer, and includes a workman and any public officer or employee of the Government included in a category, class or description of such officers or employees declared by the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, to be employees for the purposes of this Act or any Part thereof; but does not include any seaman, domestic worker or any person employed in a managerial, executive or confidential position or any person belonging to any other class of person whom the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, may by notification published in the Gazette, declare not to be employees for the purposes of this Act;
terminates his contract of service without giving prior notice to his employer as required under section 22; or
Employment
has already given prior notice under section 22, but the employee terminates his contract of service without waiting for the expiry of the notice, shall be paid to him not later than 7 days after the day on which the contract of service is terminated.
The employer may, subject to any order made by a court or the
employer
“employer” means any person who employs another person under a contract of service and includes — (a) the Government, in respect of such categories, classes or descriptions of public officers or employees of the Government as are declared by the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, to be employees for the purposes of this Act; (b) any statutory body; (c) the duly authorised agent or manager of the employer; (d) the person who owns or is carrying on or for the time being responsible for the management of the profession, business, trade or work in which the employee is engaged;
Commissioner to the contrary, deduct from the salary due to the employee such sum as the employee is liable to pay in lieu of prior notice under section 23(1).
Commissioner
“Commissioner” means the Commissioner of Labour appointed under section 3(1);
Terms defined in s 2
Commissioner
Defined · s 2“Commissioner” means the Commissioner of Labour appointed under section 3(1);
contract of service
Defined · s 2“contract of service” means, subject to section 10, any agreement, whether in writing or oral and whether express or implied, whereby one person agrees to employ another as an employee and that other agrees to serve him as an employee, and includes a contract of apprenticeship;
employee
Defined · s 2“employee” means a person who has entered into or who works under a contract of service with an employer, and includes a workman and any public officer or employee of the Government included in a category, class or description of such officers or employees declared by the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, to be employees for the purposes of this Act or any Part thereof; but does not include any seaman, domestic worker or any person employed in a managerial, executive or confidential position or any person belonging to any other class of person whom the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, may by notification published in the Gazette, declare not to be employees for the purposes of this Act;
employer
Defined · s 2“employer” means any person who employs another person under a contract of service and includes — (a) the Government, in respect of such categories, classes or descriptions of public officers or employees of the Government as are declared by the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, to be employees for the purposes of this Act; (b) any statutory body; (c) the duly authorised agent or manager of the employer; (d) the person who owns or is carrying on or for the time being responsible for the management of the profession, business, trade or work in which the employee is engaged;
salary
Defined · s 2“salary” means all remuneration including allowances payable to an employee in respect of work done under his contract of service, but does not include — (a) the value of any accommodation or the supply of any food, fuel, electricity, water or medical attendance, or of any amenity or service excluded by order of the Minister published in the Gazette; (b) any contribution paid by the employer on his own account to any pension fund or provident fund; (c) any travelling allowance or the value of any travelling concession; (d) any sum paid to the employee to reimburse him for special expenses incurred by him in the course of his employment; (e) any gratuity payable on discharge or retirement; and (f) any retrenchment benefit payable on retrenchment;
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