The Sustainable Development Goal 3.8.2 is an indicator to track a country's progress toward universal health coverage on the financial protection against catastrophic health expenditure (CHE). The purpose of this study is to determine the proportion of households with catastrophic health expenditure, and its associated factors among Malaysian households. A secondary data analysis was performed using the Household Expenditure Survey 2015/2016. The inclusion criterion was Malaysian households with some health spending in the past 12 months before the date of the survey. Catastrophic health expenditure was defined as out-of-pocket health expenditures exceeding 10% of the total household consumption. The study included a total of 13015 households. The proportion of households with CHE in the sample was 2.8%. Female-led households (AdjOR 1.6; CI 1.25, 2.03; p-value <0.001), households in rural areas (AdjOR 1.29; 95% CI 1.04, 1.61; p-value = 0.022), small household size (AdjOR 2.4; 95% CI 1.81, 3.18; p-value <0.001) and heads of household under 60 years old (AdjOR2.34; 95% CI 1.81, 3.18; p-value <0.001) were significantly associated with CHE. Although the proportion of Malaysian households affected by CHE is small, it is increasing in comparison to previous findings. This is concerning because it may jeopardise efforts to achieve universal health coverage by 2030. To ensure financial protection and access to care, a health financing policy that includes safety net measures for households at risk of CHE is required.