Malaysians are categorised into three different income groups: Top 20% (T20), Middle 40% (M40), and Bottom 40% (B40). Over the years, the bar for each group’s income level has increased and this is one of the indicators of economic growth. Here’s the latest definition for T20, M40 and B40 based on the findings from the Department of Statistics Malaysia in October 2017.
To be in the T20 group, a household needs to earn at least RM13,148 while M40 and B40 groups have moved their bars up to RM6,275 and RM3,000 respectively.
To recap, the Department of Statistics Malaysia has released a report named Household Income And Basic Amenities Survey 2016. In the report, it stated that the median household income for T20, M40 and B40 has shown a compound annual growth rate (CAGR) of more than 6%.
On top of that, Malaysia’s household median monthly income crossed the RM5,000 mark for the first time last year, with M40 households registering the highest growth in median income, according to the Department.
New Median Income of T20, M40, And B40
|Median Monthly Income By Household Group|
|Household Group||Median Income 2016 (RM)||Median Income 2014 (RM)||CAGR (%)|
Though the income levels for each group has improved over the past three years, we should not ignore the escalating costs of living resulting from inflation and slower wage growth. To be exact, if we include inflation into the picture (3.15%, 2.1%, 2.09%, and 4.1% respectively in 2014, 2015, 2016, and first half of 2017), the ringgit’s value is diminishing.
It was reported that the average monthly income of employees, based on the 2016 Salaries and Wages Survey Report by the Department of Statistics, increased 6.5% to RM2,463. In 2015, it rose 5.4% to RM2,312.
Despite so, this optimistic income growth seems to be only applicable to those who are working in the Kuala Lumpur or at least nearby whereas other states are still struggling to stay on track to achieve similar income levels.
To explain this situation better, here’s the median income level for each state and you can see if you and your family are above or below the median standard.
|Median income for a household in different states in Malaysia|
|State||Median Income 2016 (RM)||Median Income 2014 (RM)|
|W.P. Kuala Lumpur||9,073||7,620|
Interestingly, you can see that Pulau Pinang’s median income level is placed in the middle among its peers despite being the second highest performing state in the country with GDP per capita of RM47,322 after Kuala Lumpur at RM101,420.
It was reported that factories have been closing down in this particular state and employment opportunities are still relatively lower compared with Selangor and Putrajaya given the latter’s closer proximity to the city filled with better job opportunities.
Apart from Kuala Lumpur, Selangor, and Putrajaya, Pulau Pinang and the remaining 12 states’ median income level did not exceed the median income level for the M40 group in Malaysia. This means the rest still have a gap to close in order to improve the income gap between urban and rural areas.
Nonetheless, it is satisfying to see the huge jump in both Terengganu and Perak state’s median income level from 2014, most likely thanks to a boost in the tourism sector.
To give you a clearer picture, we also found out the top 20 districts in the country with the highest median household income in 2016. However, this does not mean you can get the same for moving into any of these areas. You might if you work hard and be smart about it!
Districts With The Highest Median Household Income in 2016
|Top 20 Districts With The Highest Median Household Income|
|District||Median Income 2016 (RM)|
|Timur Laut (Pulau Pinang)||5,964|
|Barat Daya (Pulau Pinang)||5,844|
|Sungai Petani Tengah||5,172|
Now that you know about the median income in different states and some districts, you should find out if your financial position is better or worse than the average Malaysians here. Making financial decisions are not easy, so remember to check out our blog for the latest insights and make your life better!
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