One of the Malaysian government’s initiative to help businesses cope with headcount costs due to the Covid-19 pandemic since April 2020 was the Wage Subsidy Program (“WSP” or “PSU” which stands for Program Subsidi Upah); there was the original PSU and then a PSU 2.0. With the Covid-19 pandemic still at large and the reimplementation of the Movement Control Order in most states in Malaysia, the government has continued with the program, now known as the PSU 3.0.
As the PSU 3.0 is very similar to the PSU 2.0, we are only highlighting key information and new requirements.
What is PSU 3.0?
The PSU is a wage subsidy program whereby employers will receive a cash subsidy for each applicable employee.
The PSU 3.0 was initially only extended under the Budget 2021 for a further 3 months to certain targeted sectors hard-hit by the effects of the Covid-19 pandemic (such as, the tourism and retail sectors).
However, on 18 January 2021, the Prime Minister announced that the PSU 3.0 will also be extended to all employers (all sectors) operating within states under the Movement Control Order reimplemented on 13 January 2021.
How much is the wage subsidy under PSU 3.0 and what are the conditions?
Under the PSU 3.0, employers can receive a subsidy of RM600 per employee per month for up to a maximum of 500 employees.
If the employer is part of the tourism or retail sector, the PSU will be for 6 months for new applicants or another 3 months for existing PSU recipients. If the employer is operating within states (all other sectors) which are under the Movement Control Order, the PSU will only be for one month (based on information available on the PERKESO website).
The conditions are fairly similar to the PSU 2.0, and despite the size of the company, are:
- A 30% or more decline in sales or income in 2020/2021 compared to 2019, year-on-year, since the Recovery Movement Control Order.
- Both employers and employee must be registered or contributing with SOCSO before 1 January 2021.
- The employer must be registered with the Companies Commission of Malaysia or the local authorities before 1 January 2021.
- The employee’s wage is RM4,000 and below.
- Employers receiving the subsidy must maintain all employees earning RM4,000 and below. Employers can however reduce the employee’s working hours or salary after discussion with the employee.
What businesses fall within the tourism and retail sector?
These are businesses whose operations was limited due to the Covid-19 pandemic, such as travel agencies and operators, laundromats, hair and beauty salons, event and wedding planners, sundry and hardware stores, hoteliers, airlines, sports and other entertainment centres and public transportation and vehicle rental operators.
For the full list, please visit
When can I apply for the PSU 3.0?
Applications are open from 1 January 2021 to 30 June 2021.
Who is ineligible for PSU 3.0?
These categories of employers/employees are ineligible:
- Employers not in the tourism or retail sector and also not operating within a state under the Movement Control Order
- Employers and employees who have not registered with or contributed to the Social Security Organisation (SOCSO) before 1 January 2021
- Employers who have not registered with Companies Commission of Malaysia or relevant local authorities before 1 January 2021
- Employers not registered with the Inland Revenue Board of Malaysia
- Employees who earn more than RM4,000 a month
- Foreign workers or expatriates
- Retrenches employees
- Employees hired under the PenjanaKerjaya program
- Civil servants or employees of statutory bodies and those self-employed including freelancers
- Employers who withdrew their successful PSU 3.0 applications after already receiving approval.
Is a new application for PSU 3.0 required for employers already receiving the PSU under the previous programs?
If a prior application for wage subsidy was rejected, can I still apply for PSU 3.0?
Yes, provided the conditions for PSU 3.0 is met.
If a prior PSU application was only partially approved due to employees being registered with SOCSO after 1 April 2020 or 1 September 2020, can I still apply for PSU 3.0 for all my employees including those registered after 1 April 2020 or 1 September 2020?
Yes provided the conditions for PSU 3.0 is met. The wage subsidy for those employees registered after 1 April 2020 or 1 September 2020 will only be for 3 months.
For more information or to apply for PSU 3.0, please visit www.psu.perkeso.gov.my.
This article was written by Donovan Cheah and Yan Nie Th’ng. Donovan has been named as a Recommended Lawyer for Labour and Employment by the Legal 500 Asia Pacific 2017, 2018, 2019, 2020 and 2021, and he has also been recognised by Chambers Asia Pacific and Asialaw Profiles for his employment law and industrial relations work.
Donovan & Ho is a law firm in Malaysia. Our practice areas include employment law, dispute resolution, tax advisory and corporate advisory. Have a question? Please contact us.