Effective Jan 1, the 222 MPs will have a rise in allowance.
The salaries and allowances of the Dewan Rakyat Speaker and Dewan Negara Speaker will also be increased.
Allowances of MPs would be increased from the equivalent grade 54 to equivalent grade Jusa C, while those of Dewan Negara would go up from the equivalent of grade 48 to equivalent between grade 54 and Jusa C.
"MPs play an increasingly important role for the community. In other words, their services are needed at all hours to reflect their responsibility. I propose that their allowances be raised," Prime Minister Datuk Seri Najib Tun Razak said.
Najib said the Government had also decided to review the salary of members of the administration and a decision on the matter would be made at the appropriate time.
"This includes the Prime Minister, Deputy Prime Minister, ministers and deputy ministers."
Premier Grades are supergrades in the civil service, consisting of Jusa C, Jusa B and the highest grade in this band which is Premier Grade A (Jawatan Utama A or Jusa A).
Those in Jusa C are department heads as well as those holding grades above 54.
MPs salaries have been revised five times - in 1992, 1997, 2001, 2002 and 2005.
In the 2005 review, their basic pay was increased from RM5,916.90 (S$358.80) (in 2002) to RM6,508.59 now, which is not inclusive of other benefits such as a RM1,200 driver's allowance.
The basic salary for Jusa C for 2013 starts at RM7,189.