HR

Eligible employers must register for HRDF by 30 April 2021 to avoid RM10,000 fine

John Cheong

April 13, 2021

[UPDATED: 14 May 2021]

Malaysia's HRDF has re-branded to become HRD Corp.

On 1 March 2021, Malaysia’s Human Resources Development Fund (HRD Corp) has expanded the coverage of the Pembangunan Sumber Manusia Berhad Act 2001 (PSMB Act 2001) to include all industries.

The expansion is a crucial step towards the overall development of Malaysia’s human capital; assisting towards increasing the number of skilled local workers that are responsive to business needs with the Ministry spearheading the mission. In other words, all industries are required to contribute HRD levy and will be covered under the HRD’s training except for Federal and State Government.


Employers of the new sectors are given an exemption of HRD levy for three (3) months under Pembangunan Sumber Manusia Berhad Act 2001 from 1 March to 31 May 2021. Employers under the new industries are required to register to HRD Corp before 30 April 2021.


What is HRD Corp (formerly known as HRDF)?


Human Resources Development Fund (HRD Corp)
is a government agency under the Ministry of Human Resources which is currently known as Pembangunan Sumber Manusia Berhad Act 2001 (PSMB).

The PSMB Act 2001 aims to provide for the imposition and collection of a human resources development levy for the purpose of promoting the training and development of employees, apprentices and trainees, the establishment and the administration of the Fund by the Corporation and for matters connected therewith.

In line with their vision, HRD Corp provides training and up-skilling interventions to key industries in Malaysia to keep up with the fast-evolving business landscape and their individual company aspirations.



What is HRD levy?


If your company falls under the act are obligated to register with HRD Corp and requires to contribute HRD levy every month. The levy fee for registered employers is 1% of the monthly salary of each employee. In comparison, employers under the optional category who choose to register will be 0.5% of each employee's monthly salary.



Should your company register with HRD Corp?


Based on PSMB Act 2001, an employer will be convicted for not registering with HRD Corp may be fined up to an amount not exceeding RM10,000 or face imprisonment up to a year, or both.

Companies with 10 or more Malaysian employees are mandatory to register, while a company with 5 to 9 Malaysian employees are optional. According to the First Schedule of PSMB Act, 2001, definitions of industries covered are as follows:

The Amendment of the First Schedule comes into effect on 1 March 2021
Section 13(1) of the PSMB Act 2001 stipulates that every employer who is covered under the Act is required to register with PSMB within such time and manner as may be prescribed. Any employer who is convicted for not registering with PSMB may be fined up to an amount not exceeding RM10,000 or face imprisonment up to a year, or both (Section 13 (2)).


List of industries required to register with HRD (PSMB):

  • Agriculture and farming
  • Livestock and fisheries
  • Forestry
  • Construction
  • Trading and business
  • Real estate
  • Cultural, arts and entertainment
  • Fashion and clothing
  • Cosmetic
  • Recreation
  • Services
  • Automotive
  • Banking and finance
  • Insurance and takaful
  • Investment
  • Professional
  • Science and technology
  • Administration and support service
  • Education
  • Social welfare
  • Administration of organization membership
  • Wholesale
  • Household goods and services
  • Sports
  • Personal Services



How is the HRD levy calculated?

HRD levy = HRD levy % x ( Basic Salary + Fixed Allowances)


To find out more details on how the percentage is imposed on employee salary, visit page 3 of this PDF file prepared by HRDF. Additionally, the employer shall make all HRD levy payments no later than the 15th day of the following month. For example, the levy for March 2021 must be paid on or before 15th April 2021.

How to register for HRD?

Below is the step-by-step guide to register with HRD Corp (previously known as HRDF):

  • Step 1: Ensure you have scanned required documents (form ROC/ROB, form 8, form 9, form B; latest EPF/SOCSO; company's profile/annual report)
  • Step 2: Visit HRD Corp website to download checklist
  • Step 3: Once you have go through the checklist, submit your registration via Form 1 here


How can I add the HRD levy in Swingvy Payroll Software?

Swingvy payroll software is approved by LHDN / IRB will calculate your HRD contribution automatically - you will need to check off the box for "contribute to HRDF". Read more here.


Add HRDF levy contribution in Swingvy Payroll Software



How can I make use of the HRD contribution?

Skim Bantuan Latihan (SBL) is the main scheme provided by HRD Corp to encourage employers to retrain and upgrade their employees' skills according to their operational and business requirements. Under Skim Bantuan Latihan (SBL), employers are free to identify their own training needs and implement the training programme in stages.

For more detailed information on Skim Bantuan Latihan (SBL) type of training, visit here.



How can I claim HRD?

Claims application can be made online via eTRiS portal under Skim Bantuan Latihan (SBL). Read the guide here on how to make your HRD claims.

Your application should include the required document as below:


Application Required Document:

  • Online application through eTRiS system
  • Invoice / Quotation
  • Training Schedule / Course Content
  • Trainer's Profile


Claim Required Document:

  • Itinerary (airfare) - if any
  • Receipt & Invoice (transportation) - if any


Notable training programmes must commence within six (6) months from the date of training grant applications are made, and training claim submissions must be made not more than six (6) months from the date the training programmes are completed.



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