Abstract Unlike the common stress, higher level of strains is a more serious issue since it can strongly affect one’s psychological state and behavioural actions. Among these stressors include the workplace stressors which were constantly associated with job dissatisfaction, mental stress and cardiovascular health. The P-E fit theory alluded that the mismatch between the individual and the environment may result in psychological strains, consequently affecting the individual’s wellbeing physically and mentally. Hence, psychological strain is regarded as an influential factor on the state of employees’ wellbeing. This study aims to investigate the mediating effect of psychological strain on the relationship between Person-Job Fit (PJF) and employees’ wellbeing (WB). This cross-sectional study was conducted among employees of participating banks in Kuala Lumpur, Malaysia. Self-reported questionnaires were distributed via an online survey in the first few months of 2020 as part of data collection. The SEM analysis involving the measurement model, structural model and mediation analysis was conducted through PLS-SEM. The finding reveals that the psychological strain has a full, indirect mediating effect on the relationship between the PJF and WB, implying that it is an appropriate mechanism in explaining this relationship. This study sets a new direction for future studies by highlighting the role of psychological strain in predicting health outcomes besides providing the theoretical groundwork for occupational stress research using the P-E fit theory.