What is HRDF (Human Resource Development Fund)

Overview 

Human Resource Development (HRD) Corp is established under the Pembangunan Sumber Manusia Berhad Act 2001 (PSMB Act 2001) and under the purview of the Ministry of Human Resources (MOHR). HRD Corp is responsible for driving Malaysia’s talent development aspirations through the collection of levy from employers and the funding of training and development programmes for the Malaysian workforce. 

HRDF is established with the aim to promote the training and development of employees, apprentices, and trainee by collecting human resources levy. They are also providing up-skilling and training to main industries in Malaysia in line with their vision to create a competitive and skillful human resources.

Who is liable to register with HRDF

The expansion of the PSMB Act 2021 was mandated by the Government of Malaysia in its 11th Malaysia Plan (11MP), the scope of HRDF levy contribution expanded to a much wider range of industries and private sectors.  The list of industries covered is listed under the First Schedule of PSMB Act 2001.  The Federal Government, State Government, local council, and Statutory Body are excluded from the scope of HRD registration.


To determine whether your business is required to register and contribute for HRDF levy:

  1. To check whether your business fall under the list of industries covered under First Schedule of PSMB Act 2001
  2. To check if you employ ten (10) or more Malaysian employees

If yes, you are required to register as an eligible employer and contribute HRDF levy to HRDF. 

The HRD Corp also allows optional registration (subject to approval):

  • Employer within the industries of First Schedule and employing 5- 9 Malayisan employees
  • Employer (non-governmental organisation) employing 5 or more but less than 500,000 Malaysian employee such as labour union, religious organisation, political organisation and etc

Employers under the newly-included industries were originally given an exemption from HRDF levy for 3 months from 1 March to 31 May 2021. The exemption was then extended until Jan 2022 (no levy due for June to Dec 2021 payrolls).

How to Register for HRD

Step by step

The eligible employers can submit the registration with HRD Corp by the few following simple steps. The employer is required to submit registration within 30 days from the day it become liable to register (e.g. employing 10 or more Malaysian employees)

Step 1. Prepare relevant documents

Prepare and scan all supporting documents:

  • Registration form with ROC/ROB (e.g. Form B, Sec 14, Sec 17 and etc)
  • Latest EPF and SOCSO statement
  • Company profile/Audited accounts/Annual accounts

Step 3: Fill up and Submit Form 1
Register an account on the website and select and fill up Form 1 to register as an employer with HRD Corp. Make sure you attach all supporting documents as required and click Submit.

You will receive an email for approval and login to HRD E-tris if all are in order

Step 2. Visit HRD Corp website

Visit HRD Corp website- www.hrdcorp.gov.my and select Employer and click Registration


 

Imposed rate of HRDF levy

The following are the rates imposed for employees that registered with HRDF.

Company with 10 or more employees

Imposed rate : 1% of monthly salary (basic salary + allowances)

*compulsory to register with HRDF

COMPANY OF BELOW 10 EMPLOYEES

IMPOSED RATE : 1% OF MONTHLY SALARY (BASIC SALARY + ALLOWANCES)

*Not compulsory to register with HRDF (can optionally register)

Example to calculate HRDF levy and submit the contribution of levy

If you have 10 or more employees, your HRD levy calculation will be as follows:

You will be contributing 1%,  your employee's salary is RM2000 with a fixed allowances of RM200, then 

(RM2000+RM200) * 1%= RM 22 (HRDF levy)

***The HRD levy contribution MUST BE pay by the employers (cannot deduct from employee salary)

Every month, the employer shall submit Form 2 via E-Tris system and make levy payment before 15th of the following month.

The payment method for HRD levy can be FPX, JOMPAY or manual payment via bank counter

What are the benefits as HRD registered Employers?

With the additional levy contribution by the employers, it definitely increase the cost of running business. Here we find out more the benefits being HRD registered employers

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