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Human Resources Development Fund (HRDF)

What is HRDF?

The Human Resources Development Fund (HRDF) in Malaysia is a dedicated fund aimed at promoting and enhancing human resource development across the country. Managed by Human Resource Development Corporation (HRD Corp), its primary goal is to provide financial assistance to employers, enabling them to invest in training and skill development programs for their employees, thereby bridging performance gaps within the workforce.

 

As of 1 March 2021, HRDF levy has been expanded to include all industries except for the Federal and State Government, statutory bodies, and Non-Governmental Organisations (NGO) with social and welfare activities. The levy contribution rate are as follows:

 

  1. For employers with 10 or more Malaysian employees:

    Compulsory to register – the monthly levy charged at the rate of 1% of the monthly wages of employees.

  2. For employers with 5 to 9 Malaysian employees:

    Optional to register – the monthly levy charged at the rate of 0.5% of the monthly wages of employees.

All levy payments shall be made by the employer no later than the 15th day of the following month. Otherwise, the employer will bear the interest due to late payment at the rate of 10% per annum based on the number of days late.

 

How does the change in headcount affects the HRD levy rate?

For employers with 5 to 9 Malaysian employees and register under optional category, once your workforce reached 10 employees, you are required to continue contributing at the 1% levy rate for the entire year even if your headcount falls below 10 employees during the year.

Similarly, for employers with 10 or more Malaysian employees who are registered under the compulsory category, you must continue contributing at the 1% levy rate, even if your headcount falls to below 10 Malaysian employees.

 

How to make HRD levy payment?

Employers with 10 or more Malaysian employees must register an account with HRD Corp to make HRD levy payment. Once approved, an approval letter will be sent via email along with the user ID and password to log in to the E-Tris system.

HRD levy payment can be made through the E-Tris website with 2 available payment methods are FPX and JomPay.

 

How do HRDF-registered employers utilize their HRD levy?

The employers can utilize HRD levy by applying for financial assistance from the HRDF, for training and development of their local employees. The list of HRD Corp claimable courses can be found on the E-Tris system.

Submission of grant application must be made at least 1 day before training start date and the application will be processed within 2 working days. The training program must commence within 6 months from the date of training grant applications are made.

Upon the completion of the training program, employer must submit the claim application within 6 months. The claim application will be processed within 5 working days.

If the employer does not make any claims within 2 years from the date of its registration or the date of the last financial assistance granted by HRD Corp, the levy paid for those 2 years will be forfeited.

Upon forfeiture of the levy, the system will retain up to RM10,000 from the balance of the fund. However, employers with less than RM10,000 in their HRD levy balance will not be affected by this mechanism.

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