Malaysian resident & holidays

It doesnt matter because the rule is actually she has to be in Malaysia for a total of 182 days in tax year 2018 to qualify as tax resident.

The 14 day rule (7 days according to HR) is only relevant if needing to link 2 tax years, one of which the person was not tax resident through lack of days in Malaysia i.e. couldnt fulfill the 182 total out of 365.

Your wife could go to HASIL/LHDN to get a Certificate of Residence (COR) once she can produce her passport and show the required number of days (182) in Malaysia. HR should accept that and change her tax to the resident rates. She would need to take her passport and a full photocopy of it plus a list of absences to fill out the form. She would also need her income tax number.

Failing common sense, then a refund of any overpayment (i.e. difference between resident and non-resident rates) will be made when she files her tax return in April 2019 for tax year 2018.

Its important to understand the 14 day rule when leaving the country after employment finishes if in that year less than 182 days are accumulated. I post this link as it has examples based on the 14 day rule (until otherwise proven to have been superseded.  http://lampiran1.hasil.gov.my/pdf/pdfam/PR_11_2017.pdf

Certificate of Residence (COR)

The Certificate of Residence is issued by the LHDN to confirm your residence status for Malaysian tax purposes. With the COR, you can start claiming tax benefits and avoid being taxed twice on the same income due to the Double Taxation Agreement that Malaysia has with multiple countries.