1 · Cost of living
RM16 billion for STR and SARA
SARA of up to RM150 a month for all STR recipients; RM100 twice for non-STR adults aged 18+.
Households
Malaysia Budget 2027 · Explainer
Ask the budget anything.
The fifth Madani Budget, tabled on 9 October 2026, sets out RM459.8 billion in federal spending. Here is what it means for employers, workers and households, in plain English.
AI budget assistant
AI answers are based on reported Budget 2027 announcements and are for general information only.
The headline numbers
Budget 2027 at a glance
RM459.8b
Total federal budget
+3.6% vs revised 2026 (RM444.1b)
RM376.8b
Operating expenditure
82% of total spending
RM83b
Development expenditure
Infrastructure and capital projects
3.3%
Fiscal deficit (of GDP)
Down from revised 3.6% in 2026
RM2,000
New minimum wage
Up from RM1,700, effective June 2027
4.2–5.2%
GDP growth forecast
Inflation seen at 1.8–2.8%
AI & digital initiatives
How Budget 2027 positions Malaysia’s economy for the AI and data-centre boom driving record tech exports.
01
Tax relief for AI subscriptions
AI tool subscriptions join the expanded list of individual lifestyle tax reliefs.
02
High-value tech investment
Government-linked investment companies continue investing in data centres and local startups, part of RM25b GLIC investment.
03
Attracting global firms & talent
Six initiatives to draw global companies and skilled talent into high-value industries.
04
P2P financing stamp duty cut
Stamp duty on peer-to-peer financing reduced to RM10 for 2027–2030, supporting digital financing for MSMEs.
Measures explorer
Find the measures that affect you
Audience
Pillar
72 measures
1 · Cost of living
SARA usable at 216 FAMA markets and tamu
SARA extended to fresh produce; small grocery partners widened to 10,000.
Households · Employers & MSMEs
1 · Cost of living
Jualan Rahmah & Agro MADANI raised to RM750m
35,000 programmes nationwide, with produce up to 30% cheaper.
Households
1 · Cost of living
Individual tax relief raised to RM12,000
Up from RM9,000, the first revision since 2010.
Households · Workers
1 · Cost of living
Income tax cut by one percentage point
18% for RM70,001–100,000 and 24% for RM100,001–150,000 chargeable income.
Households · Workers
1 · Cost of living
Expanded individual tax reliefs
Covers postpartum care, all parent care costs, sports shoes, children’s tuition, AI subscriptions and pet adoption.
Households
1 · Cost of living
30% rate for income above RM1 million
Progressive adjustment for high-income earners.
Households
1 · Cost of living
Minimum wage raised to RM2,000
From RM1,700, effective June 2027 for 8 million workers. MSMEs with sales below RM50m are exempted.
Employers & MSMEs · Workers
1 · Cost of living
RM2,500 minimum for semi-skilled workers and graduates
First step in reforming the workers’ income framework.
Employers & MSMEs · Workers
1 · Cost of living
GLIC/GLC living wage benchmark RM3,400
Up from RM3,100, benefiting 230,000 workers. Private employers urged to follow.
Employers & MSMEs · Workers
1 · Cost of living
Wage deductions only for bank-paid wages
Non-MSME companies may claim tax deductions on wages only if paid through bank accounts under the Employment Act 1955.
Employers & MSMEs
1 · Cost of living
RM160 million gig worker package with Grab
Higher minimum income, vehicle maintenance and insurance help, and SOCSO contributions.
Workers
1 · Cost of living
SOCSO matching incentives
35% for e-hailing and p-hailing workers (50% if platforms contribute); 70% for 200,000 self-employed.
Workers
1 · Cost of living
EPF matching and automatic registration
Up to RM600 a year EPF matching for gig drivers; all citizens auto-registered with EPF at 18.
Workers
2 · Every state
Sabah RM18.7b and Sarawak RM16.2b
The highest federal state allocations, both up from 2026.
Households
2 · Every state
Special Grant interim rate RM1.5 billion
For Sabah and Sarawak, to be paid in full before year-end.
Households
2 · Every state
Sabah electricity: RM204m STATCOM systems
At Dam Road and Segaliud substations; Southern Link line continues.
Employers & MSMEs · Households
2 · Every state
RM3.3 billion for Sabah and Sarawak roads
Pan Borneo and Trans Borneo works; RM350m maintenance for G1–G4 contractors.
Employers & MSMEs
2 · Every state
Automotive relocation tax deduction
Up to RM5m for Malaysian vendors relocating to Tanjong Malim, 2027–2030.
Employers & MSMEs
2 · Every state
Stamp duty exemption for first homes
Full up to RM500,000; partial up to RM750,000, for SPAs signed 2027–2030.
Households
2 · Every state
RM20 billion SJKP housing guarantees
For 80,000 first-time buyers, especially the self-employed.
Households
2 · Every state
50% DBKL rental discount for small traders
For more than 10,000 traders throughout 2027.
Employers & MSMEs
3 · Welfare
RM7.5b procurement for G1–G4 Bumiputera contractors
Up from RM4 billion this year.
Employers & MSMEs
3 · Welfare
Higher direct award and quotation thresholds
Up to RM200,000 direct award and RM3m by quotation for maintenance works.
Employers & MSMEs
3 · Welfare
TERAJU financing of up to RM1 billion
Plus stronger monitoring of Bumiputera projects.
Employers & MSMEs
3 · Welfare
Halal certification matching grant
Up to RM5,000 for MSMEs certifying for the first time.
Employers & MSMEs
3 · Welfare
Islamic fund management tax exemption
40% income tax exemption for YA 2028–2030.
Employers & MSMEs
3 · Welfare
Lower service tax for elderly care
Cut from 8% to 6%; exemption for annual fees up to RM96,000.
Households · Employers & MSMEs
3 · Welfare
RM40m HRD Corp elderly care training
Train and place 8,000 people in the care sector.
Workers · Employers & MSMEs
3 · Welfare
PWD assistance raised to RM1.5 billion
Disabled Workers Allowance income threshold raised to RM2,000.
Workers · Households
3 · Welfare
Bankruptcy threshold raised to RM150,000
From RM100,000, beginning 2027.
Households
4 · Public services
9,000 contract doctors made permanent
MOH allocation rises to RM47.7 billion.
Civil servants
4 · Public services
MediAsas launches January 2027
SMEs under 75 staff get RM200 per employee first-year premium subsidy, capped at 50 staff.
Employers & MSMEs · Workers
4 · Public services
Transparent private hospital billing
Standardised fee categories from 2027.
Households
4 · Public services
School repair allocation doubled to RM2b
MOE receives nearly RM69 billion.
Households
4 · Public services
Early Schooling Aid raised to RM200
For 5.3 million pupils, distributed at schools.
Households
4 · Public services
Form Six living allowance RM2,500
Benefiting 90,000 students.
Households
4 · Public services
PTPTN concessions and employer deduction
Deferment for borrowers earning up to RM2,500; tax deduction for employers repaying staff loans, 2027–2028.
Employers & MSMEs · Workers
4 · Public services
Tax deduction for university contributions
Up to 10% of aggregate income.
Employers & MSMEs
4 · Public services
MyKomuter50 introduced, My50 continued
Commuters save up to RM160 a month.
Workers
4 · Public services
VOP clause and commercial vehicle telematics
Price variation for diesel and bitumen; telematics on commercial vehicles (voluntary in 2027).
Employers & MSMEs
5 · Supplies & preparedness
TNB invests RM15 billion in the grid
To meet continuous electricity demand.
Employers & MSMEs
5 · Supplies & preparedness
Green technology ITA of up to 100%
Extended to 31 December 2030, including EV charging.
Employers & MSMEs
5 · Supplies & preparedness
NUR MADANI appliance rebates
Up to RM200 for energy-efficient air conditioners and fridges.
Households
5 · Supplies & preparedness
RM2.62 billion for paddy farmers
Harvesting incentive doubled to RM100/ha; RM300 ploughing incentive extended to Sabah and Sarawak.
Farmers
5 · Supplies & preparedness
Support for fishermen
Special sampan licences raised to 20,000; living allowance up to RM300 a month.
Farmers
5 · Supplies & preparedness
Oil palm replanting financing
RM100m hybrid financing (repay half) and RM200m soft loans at 2%.
Farmers
5 · Supplies & preparedness
Rubber Production Incentive RM3.30/kg
Benefiting more than 300,000 smallholders.
Farmers
5 · Supplies & preparedness
Disaster home repair aid doubled to RM10,000
NADMA allocated RM260 million.
Households
6 · Economic potential
MSME income tax cut
14% on the first RM150,000; 16% on RM150,000–600,000. Up to RM6,000 for 300,000 MSMEs.
Employers & MSMEs
6 · Economic potential
Low-value asset limit raised to RM3,000
Non-MSME overall claim limit rises to RM30,000.
Employers & MSMEs
6 · Economic potential
Sales tax reclaim on machinery
Manufacturers can reclaim sales tax on machinery and parts bought locally.
Employers & MSMEs
6 · Economic potential
Accelerated Capital Allowances extended
For local machinery, ICT equipment and software, to end-2030.
Employers & MSMEs
6 · Economic potential
RM10 stamp duty for P2P and excess credit
For agreements executed 2027–2030.
Employers & MSMEs
6 · Economic potential
RM200m Sejahtera MADANI Grants
Equipment and training for 40,000 recipients, particularly women.
Employers & MSMEs
6 · Economic potential
Microfinancing raised to RM6.6 billion
AIM RM3b, TEKUN RM1.3b, BSN RM1.7b.
Employers & MSMEs
6 · Economic potential
Extra RM5b BNM financing for SMEs
For SMEs affected by the West Asia conflict.
Employers & MSMEs
6 · Economic potential
RM32 billion SJPP and CGC guarantees
SJPP extended to mid-tier firms, limit raised to RM50m.
Employers & MSMEs
6 · Economic potential
Export support: MATRADE RM60m, BPMB RM1b
Helping MSMEs enter new overseas markets.
Employers & MSMEs
6 · Economic potential
E-Commerce Bill to be tabled
Protecting local MSMEs from unfair foreign competition.
Employers & MSMEs
6 · Economic potential
Global Services Hub 5% tax rate
Improved GSH incentives from 1 January 2027.
Employers & MSMEs
6 · Economic potential
Dependant Pass spouses allowed to work
For spouses of Category I Employment Pass holders, from 2027.
Employers & MSMEs · Workers
6 · Economic potential
Bakat MADANI tax deduction
Target 30,000 job opportunities; deduction for companies running programmes to 2030.
Employers & MSMEs · Workers
6 · Economic potential
HRD Corp RM3b for 3 million training places
Part of RM8 billion in total TVET allocations.
Employers & MSMEs · Workers
6 · Economic potential
MDEC RM30m to help 4,000 MSMEs adopt AI
Also trains and certifies 5,000 AI professionals.
Employers & MSMEs
6 · Economic potential
100,000 more free AI subscriptions
Extended to new apps such as ChatGPT.
Workers
7 · National identity
RM130m+ for film, music and creative content
Entertainment duty exemption for local films and theatre in the Federal Territories.
Employers & MSMEs
7 · National identity
RM935 million for tourism and culture
Visit Malaysia Year extended to 2027.
Employers & MSMEs
7 · National identity
RM240m for the 2027 SEA Games
Plus RM460 million for national sports development.
Households
8 · Integrity & finances
Public disclosure of government contracts
Contractors and contract values published once the Procurement Act takes effect in 2027.
Employers & MSMEs
8 · Integrity & finances
RM1,500 special aid for civil servants
For 1.3 million civil servants; RM750 for over one million retirees.
Civil servants
8 · Integrity & finances
Minimum pension RM1,350; longer maternity leave
Lifetime maternity leave up from 360 to 490 days, max 98 per birth.
Civil servants
Fiscal breakdown
Where the money goes
Federal spending, RM459.8b
Operating expenditure: RM376.8bDevelopment expenditure: RM83b
Fiscal deficit, % of GDP
Overall national resources, RM510b (RM billion)
Sources: Budget 2027 speech and fiscal outlook as reported by NST, Reuters and Malay Mail (9 Oct 2026). Verify details against official Ministry of Finance documents.