HRDF Levy Extended to New Industries


With the amendment to The Pembangunan Sumber Manusia Berhad Act 2001 (“PSMB Act”), Human Resources Development Fund (HRDF) Levy would be extended to more industries with effect from 1 March 2021.


In a nutshell, the changes in HRDF levy include:

1. Employers in the following industries (under First Schedule1) with a minimum 10 Malaysian employees must register the Human Resource Development Corporation (HRD Corp) and pay the levy in respect of each employee:

  • Agriculture and farming

  • Livestock and fisheries

  • Forestry and logging

  • Mining and quarrying

  • Manufacturing and production

  • Trading, business and wholesale

  • Construction

  • Supply

  • Property

  • Culture, arts and entertainment

  • Fashion and clothes

  • Cosmetic

  • Tourism and recreation

  • Service

  • Franchise

  • Electricity

  • Oil

  • Gas and steam

  • Water Sewerage

  • Management of solid waste, liquid and gaseous and remedial

  • Automotive

  • Transportation

  • Repair and maintenance

  • Storage

  • Delivery

  • Food and beverages

  • Information system

  • Communication and multimedia

  • Broadcasting and films

  • Insurance and takaful

  • Investment

  • Co-operative societies

  • Professional

  • Science and technology

  • Research and development

  • Science and technicality

  • Administration and support service

  • Education

  • Medical and health facilities

  • Social welfare

  • Administration of organisation membership

  • Small and medium enterprises

  • Household goods and services

  • Sports

  • Energy and natural resources

  • Personal services


The levy is 1.0% of the monthly wages (fixed allowances + salaries) of its Malaysian employees.

2. Employers with 5 to 9 employees may voluntarily opt to register with the HRD Corp. Under this category, the HRDF Levy is 0.5% of the monthly wages (fixed allowances + salaries) of its Malaysian employees.


3. Employers with 5 or more or but less than 500,000 Malaysian employees which is a non-governmental organisation carrying out activities in respect of a labour union, religious organisation, political organisation, nursing care facilities (including home for elderly person, person with disabilities, orphanage, chemical abuser or any welfare services) or social work without lodging may also opt to register with the Corporation. Under this category, the HRDF Levy is 0.5% of the monthly wages (fixed allowances + salaries) of its Malaysian employees.


Penalties

An employer who has failed to register itself with the HRD Corp and/or pay any levy under the PSMB Act commits an offence and may face up to RM20,000 in fine and/or up to 2 years of imprisonment.


1 First schedule of Pembangunan Sumber Manusia (Amendment of First Schedule) Order 2021


For more information, please log in to HRD Corp’s website: https://hrdcorp.gov.my/ If you require payroll advice and services, please do not hesitate to contact us.