There are many construction projects ongoing in Malaysia. Naturally, the demand for project engineers is high. But, how much can a project engineer earn? Today, I'll be exposing the salary of project engineers working in Malaysian construction companies.
A fresh graduate project engineer typically earns a basic salary of around RM 2500 per month working in a small-medium construction company in Malaysia. The total monthly salary of the project engineer including allowances is usually around RM 3200 excluding employee provident fund (EPF) contributed by the company.
Many fresh graduates often get confused by the average salary found on many jobs recruiting websites including myself more than 7 years ago. Hence, a salary structure breakdown will help them to understand it better.
Table of Contents
Basic salary is the amount of money a company pays you every month not later than the 7th day of the month in accordance with the Employment Act 1955 of Malaysia.
In Malaysia, basic salary is governed by labor law. A company must pay you the basic salary of at least RM 1200 according to the minimum wages set by the government.
When I first graduated back in the year 2013, my basic salary was RM 2200 before probation working in a small-medium air conditioning company. After 3 months, I passed my probation period and my basic salary was raised to RM 2400.
Most companies post their preferred basic salary slightly lower than the market average because they need to evaluate interviewees before they decided how much they should pay them. Usually, you'll get around RM 200 raise of your basic salary after you passed your probation period.
Generally, the amount of the basic salary of a fresh graduate project engineer is evaluated by companies based on the following criteria:
- Does he/she has a positive attitude and mindset?
- Does he/she well-dressed and have a good behavior?
- Does he/she speaks clearly and answer questions precisely?
- Does he/she shows a sign of willing to learn?
- What's his/her qualification?
The biggest concern of companies who are hiring a fresh graduate project engineer is that they are worried that the fresh graduate project engineer can't adapt to the harsh working environment, is unable to follow the pace of others and on top of all, is unwilling to learn and improve.
Eventually, the fresh graduate project engineer will either being unproductive or decided to quit which both also causing harm to the growth of the company.
In Malaysia, firing an employee is difficult. Hence, companies are being extra careful when hiring new employees.
I've talked about the 9 skills of a good project engineer in one of my blog posts. Basically, project engineers need to be tough because there are all kinds of people at the construction site.
If you are a strong person and you're sharp in speaking and answering questions, the chances of you getting a higher basic salary are greater.
As a fresh graduate, your qualification often doesn't carry much weight to the opinion of the interviewer. Many interviewers use extras like co-curriculum to find signs of good attitude, mindset and behavior.
Being a project engineer, you'll be assigned to work on one or more construction projects concurrently. Usually, a fresh graduate is assigned to one project only but it may differ depending on the scale of the project.
Hence, you'll need to travel around using your own vehicle (car, motor or public transports). Besides, you'll be using your phone more often to communicate with people at the site and back in the office.
Generally, your monthly expenses will go up once you become a project engineer. So, your company will cover the extra expenses for you by means of allowances.
Below is the typical allowances included in the compensation of a fresh graduate project engineer:
|Car Allowance||RM 500|
|Petrol Allowance||RM 300|
|Toll & Parking||RM 150|
|Phone Allowance||RM 150|
|Meal Allowance (for OT)||RM 30 per meal|
Depending on the project, you may not need to be full-time on the construction site. Hence, most companies don't provide a site allowance to project engineers unless they are assigned full-time on the site. Most of the time, a site engineer is the one who has a site allowance because he/she is based full-time on-site.
Project engineers don't have overtime because they are considered professionals and professionals don't pay by the hour like general workers do. Only supervisors, technicians and general workers have overtime claims.
However, many companies do allow you to claim for meal expenses if you had to work overtime reasonably. Toll, parking and phone allowances are pretty much standards in your compensation package unless a company phone is provided, then phone allowance is excluded.
Allowances are not the same as basic salary. Companies are less legally required to provide you with allowances. In another word, your company can deduct or retract your allowances at any time at any amount they deem appropriate.
Therefore, many fresh graduates demand a higher basic salary but the reality is that Malaysian construction companies don't go by high basic salaries. However, the total salary is pretty attractive.
Total Monthly Salary
The sum of your basic salary and allowances is your total salary. However, it is not the net salary you'll receive in your bank account every month. Many fresh graduates don't know how to calculate their total salary and net salary.
Back to my story. I was getting a basic salary of RM 2400 after probation and my total allowances remain at RM 1100 inclusive of car, petrol, toll, parking and phone allowances.
So, my total monthly salary is RM 3500 which is pretty decent compared to other fresh graduate jobs like accountants and executives.
However, the actual total money given to me by the company was RM 3812 including a 13% of EPF contribution (RM 312) to my EPF account by the company. This 13% EPF contribution is by the company, not deducted from my total salary.
The EPF contribution by companies is reflected in monthly salary payslips but usually not in the calculation of the total salary. Hence, many people are missing out on it.
The amount of money contributed to your EPF account is based on your basic salary. In Malaysia, companies must contribute 13% for employees who have a basic salary below RM 5000. You can find out more about EPF details from their website.
That's why most companies don't pay a high basic salary. The higher your basic salary, the higher the amount of money the company must contribute to your EPF account.
Hence, many companies pump up allowances to increase the total monthly salary in order to attract talents. But, as I mentioned earlier, companies can deduct or retract allowances anytime at any amount they deem appropriate.
Therefore, if you are offered an exceptionally low basic salary and high allowances, you should re-evaluate the stability of your monthly income.
Net Monthly Salary
The total monthly salary is not the amount of money you are getting in your bank account every month. Hence, you need to calculate the net monthly salary you're going to receive in order to do plans for your personal finance.
As a fresh graduate project engineer, you are most likely not going to hit any income tax bracket. Hence, your total salary is not deducted for income tax.
However, you'll need to contribute to your own EPF account which is 9% of your basic salary as of writing. Normally, you must contribute 11% of your basic salary to your own EPF account every month. So, if you check your EPF statements, you'll see two contributions; one from yourself and one from the company you're working in.
Furthermore, you'll need to pay RM 12.75 plus RM 5.10 if your basic salary is RM 2500 for work insurances which are known as SOCSO and EIS respectively in accordance with the law of Malaysia. You can find out more about SOCSO, EIS and other insurance rates here.
Considering everything included and deducted, a typical fresh graduate project engineer monthly salary could be as below:
|Basic Salary: RM 2,500.00||Employee EPF (9%): RM 225.00|
|Car Allowance: RM 500.00||Employee SOCSO: RM 12.75|
|Petrol Allowance: RM 300.00||Employee EIS: RM 5.10|
|Toll & Parking Allowance: RM 150.00||Income Tax: N/A|
|Phone Allowance: RM 150.00|
|Total Earnings: RM 3,600.00||Total Deductions: RM 242.85|
|Employer EPF (13%): RM 325.00||Net Earnings: RM 3,357.15|
So, typical fresh graduate project engineers receive a net earning of around RM 3350 every month in their bank account. At the same time, their EPF account increased by RM 550 every month.
Apart from basics such as medical leaves and annual leaves, some companies allow their employees to claim for medical, dental and optical expenses. However, fresh graduates may not have access to these benefits until they've worked in the company for 1-2 years.
Besides, some companies provide insurances to their employees but again, only applicable to loyal employees most of the time. Meanwhile, a company car is out of reach for fresh graduates.
Some companies provide accommodation for project engineers near the construction site they are assigned to especially if the construction site is far away from cities and towns.
Bonus is extra money companies pay to their employees usually on a yearly basis. Most companies issue bonuses in January or February.
Getting a yearly bonus is a norm in Malaysia. However, it depends on whether the company is generating good profit or not. Companies can cancel bonuses at any time at any amount they deem appropriate because bonuses is not a legal requirement.
Generally, large companies can provide a better bonus to their employees because they are more established and usually have a stable profit every year.
However, small and medium companies are also capable of providing 4 months and above bonuses to their employees. The amount of money you can receive as a bonus varies greatly depending on the company.
Therefore, I would advise you not to rely on bonuses too much.
As a fresh graduate, your salary increment is usually greater than people who have been working for several years. Your basic salary will increase greatly when you get promoted to a higher position.
Typically, companies only provide a salary increment of around 3-5% every year to match the average inflation rate in Malaysia. Salary increment is based on basic salary. If you earn a basic salary of RM 2500, your yearly increment is around RM 100, making your basic salary RM 2600 next year.
However, when a fresh graduate project engineer worked for about 2-3 years, he/she can be promoted to become a senior project engineer which he/she may have a salary increment of around RM 500 due to position change.
So, if you're starting out with RM 2500, you'll be getting RM 2600 next year and RM 2700 the year after. Let's say you get promoted to become a senior project engineer in the third year of your work, you may be getting a basic salary of around RM 3300.
Given that your monthly allowances maintain at RM 1100, your total salary is around RM 4400 and your net salary is around RM 3950, deducting EPF, SOCSO, EIS and income tax.
If you get promoted to become an assistant project manager after another 2 years of working, you may be getting a total salary of around RM 5200 and your net salary may be around RM 4600. See project engineer vs project manager.
|Year||Basic Salary||Net Income|
|Fresh||RM 2,500||RM 3350|
|2nd||RM 2,600||RM 3450|
|3rd||RM 3,200||RM 3550|
|4th||RM 3,300||RM 3950|
|5th||RM 3,950||RM 4600|
So, after working for a total of 5 years, your monthly net income grows from RM 3350 to RM 4600.
As you can see, having a higher basic salary will get you deducted more for EPF and income tax. At the same time, getting high allowances will not give you a stable income.
Most banks will include your fixed allowances when evaluating your house and car loan applications. So, having high fixed allowances is not necessarily a bad thing. But, certain banks may require your fixed allowances to be stated in your offer letter just to be sure.
So, being a fresh graduate project engineer, you should expect a lower basic salary than your friends but you can expect to have a higher total salary and net salary due to allowances.
If you are interested to know more about the different kinds of jobs available for mechanical engineers in high-rise buildings, do check out my post as it can give you some insights.
Otherwise, you can check out my post on project engineer career path where I outlined what's after become a project engineer and how much salary you can expect. It'll help to make a better decision.
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