Human Resource Development Fund (HRDF)
What is the Human Resource Development Fund (HRDF)?
- HRDF – Human Resource Development Fund, known as Pembangunan Sumber Manusia Berhad Act 2001(PSMB).
- HRDF’s purpose is to promote the training and development of employees, apprentices and trainees.
- Provide training and up-skilling interventions to key industries in Malaysia in keeping up with the fast-evolving business landscape and their individual company aspirations.
Who should register with HDRF?
| Amendment | Imposed rate of HRD Levy |
| Employers with 10 or more Malaysian employees are compulsory to register with HRDF. | 1 percent of the monthly wages(Total wages or basic salaries + fixed allowances) of each of their Malaysian employees |
| Employers with 5 to 9 Malaysian employees are given the option to register with HRDF if they choose to register. | 0.5 percent of the monthly wages (Total wages or basic salaries + fixed allowances) of each of their Malaysian employees |
The Amendment of the First Schedule comes into effect on 1 March 2021.
HRDF – Must-Know Facts
All employers in the following industries are Mandatory to register with HRDF.
- 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
Under section 13(2), any employer
who failed to register with HRDF may be fined not exceeding RM10,000 or imprisonment
not exceeding 1 year or both.
HRDF – deduction
- Salary
- Allowances
- Return allowance/allowance incentive allowance (where the amount per month is fixed)
- Acting allowance
- Entertainment allowance
- Long service allowance
- Machine maintenance allowance
- Temporary exchange allowance
- Skill allowance
- Cost of living allowance •Housing allowance
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