Malaysia’s informal employment declined to 3.28 million people in 2025, bringing its share of total employment below 20%, according to the Department of Statistics Malaysia (DOSM).
DOSM’s Informal Sector and Informal Employment Survey Report, Malaysia, 2025 showed that informal employment fell from 3.45 million in 2023, even as overall employment expanded.
Malaysia’s total employment increased to 16.58 million people in 2025, from 15.81 million in 2023.
As a result, the informal employment rate fell to 19.8% from 21.8% over the period, indicating that roughly one in five employed persons remained in informal employment.
The report is based on the Informal Sector Survey, a module of the Labour Force Survey conducted between January and December 2025, and is aimed at estimating the size of informal employment and employment in the informal sector.
While overall informal employment declined, the number of people employed specifically in the informal sector increased moderately to 1.90 million in 2025, compared with 1.83 million in 2023.
However, its share of Malaysia’s total employment edged down to 11.4% from 11.6%, as overall employment grew at a faster pace.
The figures distinguish between informal employment and employment in the informal sector, with the former representing the broader measure.
Men continued to account for the majority of informal employment, with 2.03 million, or 61.8%, in 2025. Women accounted for 1.25 million, or 38.2%.
Compared with 2023, the number of men and women in informal employment recorded compound annual declines of 1.9% and 3.6%, respectively.
A similar gender composition was recorded for employment in the informal sector.
Men accounted for 1.18 million people, or 62.2%, compared with 1.15 million and 62.5% in 2023.
The number of women employed in the informal sector increased to 717,100, or 37.8%, from 687,300, or 37.5%, two years earlier.
Overall, the DOSM data indicate that Malaysia’s labour market continued to expand between 2023 and 2025 while the prevalence of informal employment declined, although nearly 3.3 million workers remained in informal employment in 2025.
