To be considered rich in Malaysia, one has to be part of the country’s T20 income group. T20 is the Top 20% of income earners in all of Malaysia, with monthly earnings of RM10,971 and above.
Let’s look at the facts: Malaysia has a population of about 33 million people, with 16.13 million in the labour force as of December 2022. This is a huge increase from 2021 when the country’s labour force was only 15.80 million.
That’s quite a large number of Malaysians who are earning a steady income! This led us to wonder how many Malaysians are part of the T20 group since this is the income class where people can live comfortably on their own or with a family.
But what does it take to be part of the T20 income group? If you’re also wondering the same thing, read on! We’re diving into the different income classification groups, how they are classified, and how much a person earns to be considered rich here in Malaysia.
How is income classified in Malaysia?
The three income classification groups in Malaysia are B40, M40, and T20. In terms of household income, the B40 represents the Bottom 40%, with the M40 representing the Middle 40%, while the T20 is the Top 20% of income earners.
The different income classifications in Malaysia are based on household income. This simply refers to the overall income in one household which is the added income of each member in the said household.
Now, it is important to note that the Department of Statistics Malaysia (DOSM) only conducts a Household Income and Basic Amenities (HIS/BA) survey two times every five years.
The data we will be presenting below are sourced from the DOSM’s 2019 HIS/BA survey. The Department is still in the process of gathering data from its 2022 survey, with results to be released sometime in 2023.
To get a better look at the monthly income per income classification level in Malaysia, we outlined an updated range of figures in the table below.
|Income Classification Level||Monthly Household Income Range in Malaysian Ringgit||Approximate Equivalent in US Dollars|
|B40||Below RM4,850||Below $1,083|
|M40||RM4,851 to RM10,970||$1,083 to $2,450|
|T20||Above RM10,970||Above $2,450|
As you can see, the difference in the income range between the B40 and the T20 is huge. The main sources of income that the DOSM measured were paid employment, self-employment, current transfer received, and investments like properties.
In the DOSM’s 2019 survey, the number of income-earning households increased by about 4.7% from the 2016 figures. So, from 6.5 million households that were earning in 2016, the most updated number is now 7.28 million households.
That’s a lot of income earners but of course, not all Malaysian households earn the same. It’s important to know just how many households earn a certain amount, and if there have been significant changes in the figures.
So let’s get to discussing each individual income group and find out approximately how many Malaysian households are in each group.
B40 (Bottom 40%)
The B40, or the Bottom 40%, is the group with the lowest monthly income in Malaysia. As of 2019, there are approximately 2.91 million Malaysian households in this group, with all households earning a combined total of merely RM4,850 per month.
Let’s compare the 2019 figures to the last time that the DOSM conducted their (HIS/BA) survey in 2016.
|B40 Comparison of 2016 and 2019 Figures|
|Number of Households in B40||2.78 million||2.91 million|
|Income Range of B40 Households||Below RM4,360 ($974)||Below RM4,850 ($1,083)|
We found that the notable increase in the figures could have been caused by the rising cost of living paired with low growth in income.
It makes sense because if everything keeps getting expensive, it gets harder to keep up with if you aren’t getting a sufficient income increase. No wonder why there was a 4.7% increase in Malaysian households in the B40 group from 2016 to 2019.
The good news is that if a Malaysian household is in the B40, it is eligible for government aid. In Malaysia, some of these helpful programs include the Program Perumahan Rakyat (PPR) and the Bantuan Sara Hidup (BSH).
M40 (Middle 40%)
Aside from the B40, there is also what we call the M40 or the Middle 40%. This group has a wide required range of income so any household that earns from RM4,850 to RM10,970 is considered part of the M40.
Surprisingly enough, there are also 2.91 million households in the M40 group. Even if the required range of income is huge, the M40 group has the same number of households as the B40.
Aside from the M40 and B40 groups having the same number of households, the two income classification levels also share another thing. The M40 group also had an increase of 4.7% in the number of households.
We put all that together in the table below:
|M40 Comparison of 2016 and 2019 Figures|
|Number of Households in B40||2.78 million||2.91 million|
|Income Range of B40 Households||RM4,360 ($974) to RM9,619 ($2,145)||RM4,851 ($1,083) to RM10,970 ($2,450)|
M40 households also qualify for some forms of government aid, depending on their income level. These include some COVID-19 packages that were given during the height of the pandemic, and some government housing schemes.
T20 (Top 20%)
The highest income group in Malaysia is the T20 or the top 20%. Malaysian households that are in the T20 have a combined monthly income that is either equal to or above RM10,971.
As of DOSM’s 2019 survey, Malaysia has approximately 1.46 million households in the T20 group. When compared to the 2016 number of 1.39 households, this is about a 5% increase in the number of T20 households.
If you look at the data below, you’ll find that the required income level for T20 households also increased by a few hundred ringgit since 2016.
|T20 Comparison of 2016 and 2019 Figures|
|Number of Households in B40||1.39 million||1.46 million|
|Income Range of B40 Households||Above RM9,619 ($2,145)||Above RM10,970 ($2,450)|
Any household that falls under the T20 group is most likely a household that is full of high-income earners. Many of the individual earners in T20 households either keep their money in private banks or seek out investments that can yield high returns.
Now that you’re all caught up on how the Malaysian government classifies Malaysian households according to income, let’s talk about how much you actually need to live a comfortable life in Malaysia.
How much money should you earn to live comfortably in Malaysia?
A monthly income of about RM2,700 ($609) to RM6,000 ($1,354) is enough for a comfortable life in Malaysia. This amount is for one person that lives alone and only needs to provide for themselves.
Of course, what a “comfortable” life means can vary depending on who you’re asking. A single adult can consider life “comfortable” with a lot less money than, let’s say, a family of five or six.
There are ways to make sure that you live comfortably in Malaysia. The traditional way of graduating with a Bachelor’s Degree from college or even a Masteral Degree from the country’s top universities is one such way.
Traditionally, you’ll get a job so you can earn enough to enjoy life while even getting to save money. If you’ve saved enough money, you can invest some into franchises or start your own small business– something that many of the T20 households do.
Final Thoughts on Being Considered Rich in Malaysia
Even if what is considered “rich” can be relative to some people, we are sure that being considered rich in Malaysia requires you to meet a certain income level.
But being rich in Malaysia is more than just about having a high income. Being rich also means that you can live a comfortable and secure life, whatever your definition of that is.
For some people, being rich can bring problems (more money, more problems?). But for most of us on the team, being rich in Malaysia is definitely something that is very welcome.