RM2,000 minimum wage from June 2027: how much rent can an F&B afford?

The minimum wage rises from RM1,700 to RM2,000 from June 2027, but MSMEs with annual sales below RM50m are exempt from the new rate (The Star, 9 Oct 2026). Most single-outlet F&B shops are below that line. Whether or not you are exempt, a safe rule is to keep rent plus charges near 10% to 15% of monthly sales, and test the number before you sign.

Budget 2027, tabled on 9 October 2026, made three wage announcements (The Star, 9 Oct 2026):

• The minimum wage rises from RM1,700 to RM2,000 a month from June 2027.
• A new RM2,500 minimum applies to semi-skilled workers and graduates.
• MSMEs with annual sales below RM50m are exempt from the new rate.

The changes cover more than 4 million workers. The RM50m exemption is the part most owners misread. A café or restaurant with one or two outlets rarely reaches RM50m a year, so the new rate may not bind it. A fast-growing chain may cross the line, and so may a franchisee group with many outlets under one company. Check your own company's sales with your accountant before you budget.

Because you hire from the same pool as the chains that are not exempt. If the big brands on your street pay RM2,000, your cooks and servers will compare. In practice many small operators will move closer to the new rate to keep staff. Costs were already rising: Retail Group Malaysia reported café and restaurant sales down 4.6% year on year in 1Q2026, and operators blamed higher raw material, rental, utilities, fuel, labour and packaging costs (Malay Mail, 12 Jun 2026). FamilyMart named the same pressure on its margins: wages, rental, transport and SST-related costs (The Edge, 27 Aug 2026).

When wages go up and sales do not, something else must give. Rent is the one cost you fix for two or three years at signing, so it is the one to get right.

The best Malaysian anchor we have is Pavilion REIT. At its 10th AGM it put F&B occupancy cost (rent and charges divided by sales) at 10% to 15% before the pandemic, rising to 18% to 25% during it. These are mall figures, but they give a fair range for a street shop as well. Use them as a rule of thumb, not a law.

The wage column is simple arithmetic: moving six staff from RM1,700 to RM2,000 costs RM1,800 a month before statutory contributions. On RM60,000 of sales that is 3% of turnover, and it has to come from margin, menu prices or rent.

• Start from sales, not the asking rent. Estimate monthly sales from seats, turns and average bill, then apply 10% to 15%.
• Add all charges. Service tax on rent where the landlord is registered, utilities, and any service charge belong in occupancy cost.
• Stress-test wages. Rerun the numbers with every staff member at RM2,000, even if you are exempt.
• Compare with the market. Check our shop rent index and how much rent to ask for a shop lot to see whether the asking figure is in line.
• Price per sq ft. Use the psf calculator to compare two units of different sizes.
• Check the kitchen. A cheap unit without exhaust, 3-phase power or water points can cost more to fit out. See why exhaust, 3-phase power and water matter.

Sometimes. A front-row ground floor pays for itself in walk-in trade and visibility. A delivery-led kitchen may not need it. The key is that every ringgit of rent should bring sales. Our tenant guide explains how we shortlist units against a sales target, and you can compare areas such as Puchong and Petaling Jaya.

Leases signed in late 2026 will run through the June 2027 change. Ask for a fixed rent for the first term, a capped increase at renewal, and a rent-free fit-out period. Keep a written record of every agreed point.

This is general information, not legal, tax or payroll advice. Check your wage obligations with an accountant.

Written by Tok Ginstee (REN 37505), CID Realtors Sdn Bhd (E (1) 1855). Updated November 2026.