70% of Malaysians Earn RM5,000 or Below With Minimal Savings

By Danial Martinus • 10 Jun 2026 in News

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(source: Kelvin Zyteng / Unsplash & Benson Low / Unsplash)

It’s no secret that wages have not kept up with the ever-increasing cost of living. That sentiment is especially relevant now that the world is dealing with the consequences of the West Asia conflict.

But what you probably weren’t aware of is the percentage of Malaysians currently earning RM5,000 or less as of December 2025.

That’s a staggeringly large number of people earning just barely enough to make ends meet.

Those in urban areas particularly vulnerable to rising costs

According to Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid, Malaysians earning RM5,000 a month or below form the largest segment of the formal workforce.

But those who live in urban areas are the most vulnerable to the rising cost of living, since basic goods and services are generally more expensive in these areas to begin with.

According to the Basic Expenditure for Decent Living (PAKW) indicator, a married couple between 18 and 29 years old with two kids aged between one and three should ideally be earning a minimum of RM6,183 to meet basic needs.

This becomes harder to achieve when individuals in each household earn much less than RM5,000 each. Even meeting the bare minimum leaves very little to put towards savings or an emergency fund. Luxuries in this case are simply out of the question.

“An urban household earning under RM10,000 a month may struggle to meet basic expenses and other commitments, including emergency or long-term savings,” says Afzanizam.

“By comparison, a similar household in Kuala Terengganu requires RM3,845. This shows how geographical differences directly affect purchasing power and disposable income.”

Afzanizam argues that financial resilience isn’t solely determined by income, but also financial management. Personal loans are reportedly the main cause of bankruptcy in Malaysia, followed by business loans, vehicle hire purchase, housing loans, and credit card debt.

(source: Aiman Hariz Azhar / New Straits Times)

An even more sobering reality is the fact that roughly 80% of Malaysians live paycheck to paycheck, according to Universiti Sains Islam Malaysia Faculty of Economics and Muamalat lecturer Prof Dr Nuradli Ridzwan Shah Mohd Dali.

And this takes into account that most of the household income is being spent on basic daily expenses, with little to no savings leftover.

“The majority are financially constrained. Some have minimal savings, while others have none at all,” he says.

He also urged Malaysians to avoid going to loan sharks in times of desperation. Instead, those facing financial difficulties should reach out to zakat institutions, social welfare agencies, as well as trusted family members.