Malaysians in different states earn different levels of income. But does a higher salary necessarily mean employees are happier?

Here are the top 10 states and territories in the country that have the highest levels of happiness when it comes to their income, using data obtained from the Malaysian Happiness Index published by the Department of Statistics Malaysia.

The index surveys Malaysians from different states on their happiness with regard to family, religion, health, use of their time, social participation, housing and environment, work life, education, public safety, culture, emotional experiences, communication facilities, and – pertinent for this article – income.

Happiness levels were graded on a scale of 0 to 10, with the following criteria:

• 0-2: Not very happy
• 2-4: Not happy
• 4-6: Moderately happy
• 6-8: Happy
• 8-10: Very happy

1. Labuan

Surprisingly, Labuan tops the list with a score of 9.0, making it the happiest territory in Malaysia when it comes to income. Residents earned about RM6,726 a month in 2019, making them the fourth-highest earning in the country.

Expenses came up to RM3,550 per month, translating to about only 52.8% of income – the lowest spending-to-salary ratio in Malaysia.

It does help that Labuan is a small island with duty-free products, which makes things relatively cheaper compared with other areas, and also boasts one of the best tourism spots in Malaysia.

2. Terengganu

With a score of 7.2, Terengganu residents earned about RM5,545 a month in 2019, placing them in the eighth position by state but second in terms of happiness. Monthly expenses came up to RM3,835, translating to a high spending-to-income percentage of 69.2%.

Terengganu is the central location for oil and gas activities, where its offshore rigs are a major contributor to the economy. Tourism also plays a big part, given the state’s sandy white beaches and beautiful snorkelling and diving spots.

3. Kuala Lumpur

Kuala Lumpur had the highest monthly median income of RM10,549, with spending of about RM5,692 per month. This translates to a percentage of 54%, one of the lowest after Labuan and Sabah.

KL scored 7.1 in the happiness index. Being the central territory for most jobs, especially in finance, banking, and the services sector, those who work here have a good reason to be happy about their income.

4. Putrajaya

The administrative capital comes in at fourth place with a happiness index of 6.6. Those who work here earned the second-highest income in Malaysia at RM9,983 a month, and spent approximately RM6,478.

Putrajaya’s ranking on this list shouldn’t be surprising since most, if not all, government ministries are located here. It also helps that many technology and multinational companies make their home in neighbouring Cyberjaya.

5. Kedah

The average Kedahan household earned RM4,325 a month in 2019, one of the lowest in Malaysia. They spent RM2,759 a month, translating to about 63.8% of their income.

With a score of 6.5, this is a good example of how earning less money doesn’t necessarily equate to less happiness. Kedah is one of the most important agricultural states, providing rice supplies throughout the country.

6. Sarawak

The land of the hornbill, Sarawak tied Kedah with a happiness index of 6.5. The average Sarawakian household earned RM4,544 per month and spent RM2,945.

Home to the largest natural resources such as oil and gas, and forestry products, Sarawakians can find job opportunities in these industries. The cities of Kuching, Miri, and Bintulu are the primary focal points for the state’s economy.

7. Perlis

Perlis, too, tied Kedah and Sarawak with a score of 6.5. Those working here earned RM4,594 a month while spending RM3,161 – a spending-to-income ratio of 68.8%, the fifth-highest in the country after Kelantan, Negeri Sembilan, Pahang, and Terengganu.

Being near the Thai border, trading activities are major contributors to the Perlis economy. Similar to Kedah, it is also a major hub for agricultural activity.

8. Penang

Penang’s position on this list is a surprise. It scored 6.4 on the happiness level for income, with the average Penangite earning RM6,169 and spending RM3,793 monthly.

Penang is home to many of the best electrical and electronics firms in Malaysia and the world that are integral to the global supply chain. Penangites might not be altogether happy with their income as the lack of affordable housing remains an issue in the state, particularly on the island.

9. Johor

Similarly, Johor comes as another surprise, with its score of 6.2. Johoreans earned RM6,427 a month and spent RM4,025 – some 62.6% of total income.

With its proximity to Singapore, many Johoreans make their living there, commuting back and forth for work. The state also boasts one of the key manufacturing and agricultural hubs in the country, especially for the oil and gas, and palm industries.

10. Kelantan

Kelantan comes in last on this list, scoring 6.2 on the happiness index. The average Kelantanese household earned about RM3,563 a month – the lowest in Malaysia – and spent RM2,650 a month.

With its close proximity to Thailand, much of Kelantan’s economy revolves around trade through land and sea borders. At 74.4%, the percentage of spending to income here is the highest in the country.

This article was written by Su-Wei Ho for MyPF. To simplify and grow your personal finances, follow MyPF on Facebook and Instagram.