Why Malaysian Businesses Need HR Software

Managing employees in Malaysia isn’t just about hiring the right talent and offering competitive compensation. It also requires ensuring compliance with complex labor laws while optimizing human resources. For HR managers and business owners, this can be challenging, as Malaysia’s employment laws differ across the country. To enhance efficiency and stay compliant with crucial regulations like the Employment Act 1955, choosing reliable HR software Malaysia is imperative.

Choosing the right HR software Malaysia directly impacts your team’s productivity and business growth. In this guide, we break down the leading HR software options in the market, comparing features, pricing, and benefits, so you can make an informed decision. Whether you need payroll automation, compliance tools, or an all-in-one HR platform, you’ll find the best HR software Malaysia for your organization here.

Read next: The Global HRIS Software Guide for 2025

What is HR software?

HR software refers to technology designed to manage all HR-related activities efficiently, from recruitment to offboarding. These tools automate repetitive tasks such as onboarding, employee relations, payroll processing, data management, time tracking, leave management, and performance reviews. These tools help startups and large enterprises in Malaysia increase productivity, minimize administrative burden, and ensure compliance with labor laws. 

Why is it important for Malaysian businesses?

HR software adoption in Malaysia is growing rapidly. According to Research and Markets, Malaysia's core HR software market is expected to grow by 9.7% annually from 2024 to 2030. The need for efficiency and compliance fuels this growth, as automation helps save time and cut compliance errors by 45%, as PwC reports.

HR systems like Omni help businesses automate routine tasks such as payroll, attendance tracking, and employee data management. They replace time-consuming processes like spreadsheets and manual data entry, leading to faster processing, fewer errors, and increased productivity. As your business grows, you can scale operations without expanding your HR team, saving time and reducing operational costs. With more efficiency, HR professionals can shift focus from tedious administrative tasks to strategic initiatives that drive business growth.

“Payroll calculations that used to take three to five working days can now be done in half the time with Omni.”
— Tengku Mohaizad, Group Head of HR Asia, Inspire Brands Asia

See how: Inspire Brands Asia saves up to USD$60,000 annually with Omni! 

Beyond automation, HR tools help ensure compliance with Malaysian labor laws by accurately handling salary calculations, tax deductions, and statutory contributions like the Employees Provident Fund (EPF), Employment Insurance System (EIS), and the Social Security Organization (SOCSO). Once configured, the system tracks changes in employee status, such as promotions or transitions from probation to full-time employment, and updates payroll accordingly.

Additionally, these tools support proper worker classification, helping you avoid misclassification penalties. They protect sensitive employee data, including contact details, salaries, and tax information, in line with the Personal Data Protection Act (PDPA). Also, they improve employee experience with self-service features, enabling workers to manage their leave requests and benefits independently without HR intervention.

Ultimately, HR system Malaysia provide real-time insights into employee performance, payroll, and workforce trends, empowering business leaders to make informed, data-driven decisions.

Additional reading: HR Software Pricing and Cost: Factors to Consider

Types of HR Software Malaysia

Below, we explore the different types of HR software Malaysia:

Cloud based

Cloud-based HR software Malaysia is usually hosted on the internet or an external server rather than local servers. Unlike traditional HR software installed on a local computer, a cloud-based HR system Malaysia can be accessed via the Internet from any device or location. This makes them ideal for remote teams in multiple jurisdictions, allowing HR teams to hire, onboard, pay employees, and manage tax deductions compliantly from any region with an internet-connected device.

This type of HR software offers various features with a monthly or annual subscription fee, so you can choose which fits your company’s budget. It also provides self-service portals for employees to access their personal information, view company policies, and manage leave requests and benefits, boosting engagement and satisfaction. 

Additionally, it has robust security measures, such as access controls, encryption, and regular updates, to safeguard sensitive information from unauthorized access. HR software Malaysia like Omni, offers advanced security measures like encryption and multi-factor authentication to keep your data safe; this is a better option than traditional methods. 

Omni implements an AES-256 encryption standard (the same as what banks use) to protect the transmission of data to our site. Our servers are located in physically secure, ISO 27001-certified data centers, and we apply end-to-end encryption to ensure maximum protection of your employee data.

Relevant reading: Cloud Payroll Software: A Complete Guide for Singapore Businesses

On-premise

On-premise HR software Malaysia is installed physically on a company's internal servers and computer systems. Your organization's in-house technical team is usually responsible for installing, maintaining, troubleshooting, and updating the software. This system often works without an internet connection, ensuring uninterrupted access and productivity. To enhance privacy, it offers businesses complete control and security over sensitive company data. 

Additionally, on-premise HR tools can be tailored to suit various organizational needs, workflows, and team sizes. The system suits businesses with strict data privacy policies or limited internet access. However, it can involve hefty upfront fees for licenses and hardware and may not have recurring subscription fees.

HR & payroll integrated solutions

ADP’s 2024 Global Payroll Survey highlights that 35% of payroll managers plan to enhance integrating payroll with other critical business systems. If your company shares this goal, choosing HR software Malaysia that combines payroll and HR functions can be instrumental to business growth.

An integrated HR system combines payroll with HR functions, such as recruitment, attendance tracking, shift scheduling, employee records, and benefits management in one platform. This centralization eliminates the need for manual data reconciliation across multiple systems. It also ensures that HR changes, like new hires or terminations, are instantly reflected in payroll, minimizing duplicate entries or miscalculations that can lead to noncompliance.

Integrated systems are particularly valuable to businesses seeking a centralized employee data system. They simplify human capital management, from hiring to payments, reducing manual effort and increasing efficiency.

Omni seamlessly integrates with your favorite workplace productivity tools, creating a digital ecosystem that enhances HR efficiency. By connecting with platforms like Slack, Microsoft Teams, and Google Calendar, Omni eliminates the need to switch between applications, allowing information to flow naturally within the tools. 

Employees can request leave, check their benefits, or receive important information directly on Slack or Teams, while managers can access team schedules through Google Calendar. This interconnectedness streamlines workflows and improves productivity by creating minimal disruption to established work routines.

Payroll software with outsourcing services

This type of HR software Malaysia involves outsourcing some or all aspects of payroll management, including salaries, taxes, and benefits administration, to an external company. This alternative is beneficial to companies that are newly hiring in Malaysia. It gives companies access to local experts well-versed in Malaysian labor laws and tax requirements.

Furthermore, outsourcing payroll relieves the burden on your HR team, saving them from spending time studying and understanding diverse local employment laws. It also ensures compliance, reduces costs, and eliminates the need to set up multiple in-house payroll systems.

Enterprise HR software

Enterprise HR tools offer comprehensive solutions for large corporations with complex workforce needs. They automate tedious paperwork, centralize data, simplify HR workflows, and provide tools for managing payroll, benefits, compliance, and payments. 

These tools provide real-time insights into workforce trends and integrate with HR, accounting, and Enterprise Resource Planning (ERP) systems. Additionally, they provide high-level security to protect sensitive multi-country payroll data.

Benefits of HR Software Malaysia

Automate payroll processing

The HR system Malaysia calculates wages and deducts taxes and contributions to ensure employees are paid correctly and on time. Additionally, it automatically updates payroll to reflect organizational changes, such as new hires, terminations, or promotions. It also generates payslips and reports to ensure compliance with tax regulations. This efficiency saves time, reduces manual input, and provides accurate payroll data.

Ensure compliance with Malaysian labor laws

Keeping up with employment regulations in Malaysia can be challenging, especially when laws vary between Peninsular Malaysia, Sabah, and Sarawak. HR teams often find themselves juggling industry workshops, reading government newsletters, and manually updating systems just to stay compliant. This workload can drain time and increase the risk of mistakes, especially as each region has its own rules for statutory contributions and employment terms.

HR software Malaysia eases this burden by automating salary calculations, tax withholdings, and workplace contributions based on the latest regional requirements. Additionally, these systems automatically update to reflect regulatory changes, reducing the risk of errors and noncompliance penalties.

At Omni, we have dedicated support and payroll specialists in Malaysia to help you navigate compliance laws and regulations, ensuring assistance is always readily available within your time zone.

Read more: Comprehensive Guide to Global HR Compliance

Saves time and reduce workload

HR software Malaysia helps HR teams save time by automating time-consuming administrative tasks. For example, these tools eliminate paperwork and speed up onboarding by allowing new hires to read and sign contracts digitally within minutes. They also auto-generate and file tax reports, saving hours of manual work. By handling repetitive tasks, HR systems reduce team workload and free up time for more strategic responsibilities, like improving employee development and achieving company goals.

Simplify tax and statutory contributions

HR software Malaysia applies the correct tax rates according to Potongan Cukai Bulanan (PCB), Malaysia’s monthly tax deduction. It also deducts statutory contributions based on the EIS, SOCSO, and EPF’s specified rates. Additionally, these tools stay up-to-date with any changes in tax laws or contribution rates, eliminating the need for manual updates. This automation simplifies payroll processing, ensuring companies stay compliant and avoid costly penalties due to outdated practices or calculation errors.

Secure and reliable data management

Employee data management is an essential HR task, as improper recordkeeping can lead to payroll errors and compliance penalties such as costly fines, lawsuits, and reputational damage.

“Omni’s automated workflows and streamlined data management have made our HR procedures seamless, and we can manage employee records with just a few clicks. What I love most about Omni is how customizable the platform is to meet our unique needs.” 
- Wiji Mulyati, Engagement & Experience Lead at Ajaib

Discover the story: Ajaib Achieves 30% Increase in Time Savings with Omni

HR software Malaysia mitigates these risks by seamlessly integrating employee data, time off, performance, and compensation details into a unified system. This integration enables HR teams to monitor, access, and analyze payslips, tax reports, and other vital information in real-time without juggling multiple tabs and paperwork. With everything in one secure place, businesses enhance efficiency and strengthen data protection, reducing the risk of fraud and data breaches.

Best HR Software Malaysia

Ready to choose the right HR software for your business? Below, we review the best HR software Malaysia to help you make a confident, final decision.

Omni

Omni is a comprehensive, all-in-one HR platform built specifically for APAC, transforming HR operations with automated workflows while maintaining compliance and efficiency. Its versatile features and easy-to-use, customizable interface make it one of the best HR software Malaysia to improve overall team efficiency and engagement.

Talent acquisition and retention

As one of the best HR software Malaysia, Omni helps businesses address talent challenges through a comprehensive approach that focuses on both attraction and retention. Omni equips you with automated workflows that accelerate the hiring process, allowing you to reach and track qualified talent through multi-channel posting and a centralized platform; digital document management for faster offer processing; and structured onboarding programs that can be customized based on roles. 

Our intuitive integration with technical assessment tools and background verification services equips your team with real-time collaboration for critical hiring decisions. And multi-language support for 10+ languages means you can expand the available talent pool into your target markets across Malaysia and more.

Employee directory and document management

Further, with Omni’s document management, you can simplify HR information management by centralizing policies, procedures, employee handbooks, and FAQs in one accessible database. This helps promote transparency and facilitate consistent communication throughout the organization.

Similarly, Omni’s employee database helps you easily manage all employee details, including contact information, roles, and departments. This further simplifies internal communication and ensures quick access to essential information.

Employee performance monitoring

Omni’s customizable performance review feature allows managers to design performance review templates to apply to various employee performance assessments, track employee submissions, and derive critical insights to drive business decisions all on one centralized platform. Pre-set performance review templates further guide teams on how to write a performance review. 

Our automated system helps managers schedule reviews, track submissions, and send reminders to ensure a complete review cycle without the administrative burden. 

Payroll management

‍Omni offers a global solution tailored for Malaysian businesses. Our expert support and multi-country payroll features help you manage your distributed workforce efficiently, ensuring compliance with local laws and regulations in 190+ countries and 10+ languages.

With dedicated payroll experts across the region and built-in calculators for country-specific requirements such as Malaysia’s EPF, Omni helps support multi-country payroll operations with proactive updates on regulatory changes.

Best features

• Streamline processes with automated workflows and customizable HR templates.
• Speed up hiring by moving candidates through recruitment pipelines with Omni’s ATS.
• Access necessary data easily with centralized document management and employee database.
• Integrate seamlessly with favorite tools like Slack and Google Calendar.

Find a pricing plan that fits your budget!

Kakitangan

Kakitangan is a payroll system in Malaysia that provides a seamless employee management experience for businesses. It offers a range of features designed to enhance payroll management, including:

• Keeps track of payslips and distributions with security.
• Automates tax calculations, pensions, EPF, SOCSO, and other statutory deductions in every payslip.
• Supports various payment frequencies, including monthly, daily, and hourly wages, to accommodate diverse business needs.
• Automatically updates changes to regulatory requirements and policies to ensure compliance.
• Seamlessly integrates with accounting and finance software for smooth operations and easy data reconciliation.

BrioHR

BrioHR is a user-friendly HRMS platform that relieves HR teams from routine tasks and drives company performance. The company also provides in-house local payroll managers who handle payroll complexities for businesses looking to outsource the task. Its features include:

• Tracks and analyzes time spent on projects to improve efficiency.
• Streamline employee leave requests and approvals.
• Automates payroll processing for accurate calculations and compliance with employment regulations.
• Simplifies submission and approval of employee expense claims.
• Provides data-driven insights through comprehensive real-time reports and analytics.
• Applicant Tracking System (ATS) for faster candidate search and reviewing applications within an integrated dashboard.​

Streamline Your Malaysian HR and Payroll with Omni

Choosing the best HR software Malaysia is crucial for maintaining compliance, increasing efficiency, and driving business growth.

With Omni’s award-winning modules, you’ll eliminate the inefficiencies of manual processes that plague many Malaysian businesses. Omni frees HR teams from administrative cycles by automating the entire end-to-end employee lifecycle—from recruitment and onboarding to employee engagement and payroll—allowing you to redirect your time to strategic work that directly impacts your bottom line.

Designed specifically to support every aspect of your business, Omni ensures you meet all requirements under Malaysia’s Employment Act, PDPA, and EPF regulations. Our comprehensive platform offers an intuitive and fully customizable experience that integrates with your team’s favorite tools, such as Slack and Google Calendar, for a seamless and timely adoption.

If you’d like to learn more about how Omni’s best HR software Malaysia automates the entire end-to-end employee lifecycle, saving People leaders from administrative tasks and increasing organizational innovation, book your product tour with our team today.

Start your 7-day free trial!