HRDF Levy and Contribution Guide Malaysia 2026
The HRDF levy is a mandatory contribution that funds employee training in Malaysia. Understanding how the levy works, how much your company contributes, exemption rules, and how to maximise your levy utilisation is essential for HR leaders and finance teams. This guide covers everything about HRDF contributions.
- All HRDF-registered employers in Malaysia
- Levy calculated on Malaysian employees only
- Based on gross monthly wages including basic salary and fixed allowances
- Payable by 15th of the following month
- Exemptions available for financial hardship (temporary) or exempt categories (permanent)
- HRDF calculates your monthly levy based on payroll data
- Pay the levy by the 15th of the following month
- Check your levy balance on e-TRIS regularly
- Plan training to utilise your accumulated balance
- Submit grant applications before training commences
- After training, submit claims to recover costs from your levy balance
What Is the HRDF Levy?
The HRDF levy (also called the HRD levy or HRDF contribution) is a mandatory payment by registered employers to the Human Resources Development Fund. The levy funds training and skills development for Malaysian employees.
Think of it as a training investment: your company contributes a percentage of payroll, and that money is available to claim back when you send employees for approved training programmes.
How Much Is the HRDF Levy?
The levy rate is 1% of each Malaysian employee's monthly wages. This is calculated on gross wages including basic salary, fixed allowances, and commissions.
Levy Calculation Examples
| Company Size | Average Salary | Monthly Payroll | Monthly Levy | Annual Levy |
|---|---|---|---|---|
| 10 employees | RM5,000 | RM50,000 | RM500 | RM6,000 |
| 25 employees | RM5,000 | RM125,000 | RM1,250 | RM15,000 |
| 50 employees | RM6,000 | RM300,000 | RM3,000 | RM36,000 |
| 100 employees | RM6,000 | RM600,000 | RM6,000 | RM72,000 |
| 250 employees | RM7,000 | RM1,750,000 | RM17,500 | RM210,000 |
What Counts as Wages for Levy Calculation
- Basic salary
- Fixed allowances (housing, transport, etc.)
- Commissions and incentives
- Overtime pay (regular overtime)
What Does NOT Count
- Employer EPF contributions
- Employer SOCSO contributions
- Retrenchment benefits
- Annual bonuses (in some interpretations — check with HRDF)
How to Pay the HRDF Levy
Payment Method
The levy is deducted alongside your EPF contributions. HRDF sends monthly levy statements through e-TRIS showing the amount due.
Payment Timeline
- Levy is due by the 15th of the following month
- Example: January levy must be paid by 15 February
- Late payments may incur penalties
How to Check Your Levy Balance
- Log in to the e-TRIS portal
- Navigate to "Levy Statement"
- Your current balance shows the accumulated amount available for training claims
HRDF Levy Exemption
Certain employers may qualify for HRDF levy exemption:
Temporary Exemption
Companies facing financial difficulties may apply for temporary exemption. This requires:
- Formal application to PSMB
- Financial documentation proving hardship
- Exemption period typically 6-12 months
- Must resume contributions after exemption period
Permanent Exemption
Some categories of employers are permanently exempt:
- Federal and state government bodies
- Statutory bodies (unless gazetted)
- Companies with fewer employees than the mandatory threshold
Historical Exemptions
During the COVID-19 pandemic, HRDF provided levy exemptions for affected industries. Similar exemptions may be offered during economic downturns.
Maximising Your Levy Utilisation
Many Malaysian companies contribute levy but never claim it back. This is essentially throwing money away. Here is how to maximise your return:
1. Track Your Balance Monthly
Log in to e-TRIS at least monthly to monitor your levy balance. Set a target utilisation rate of at least 80%.
2. Plan Training Annually
Create an annual training plan at the start of each year. Map out which employees need training, what skills are priorities, and schedule programmes throughout the year.
3. Use SBL-Khas for Flexibility
SBL-Khas has shorter lead times (14 days vs 30 days) and is more flexible for SMEs. Use it for ad-hoc training needs.
4. Invest in High-Impact Training
Rather than spreading your levy across many small workshops, consider investing in comprehensive programmes like AI training that deliver measurable productivity improvements.
5. Combine with Industry Programmes
HRDF occasionally offers special programmes (like PROLUS) that provide additional funding beyond your levy balance. Watch for announcements on the HRDF portal.
HRDF Contribution and AI Training
AI and digital skills training is one of the highest-ROI uses of your HRDF levy. A single AI training programme can automate processes worth many times the training cost.
Example ROI calculation:
- 5-day AI training for 10 employees: RM15,000 (fully claimable)
- Each employee automates 2 hours/week of repetitive tasks
- Annual time savings: 10 x 2 x 52 = 1,040 hours
- At RM30/hour average: RM31,200 in annual productivity gains
- ROI: 108% in year one
How Pertama Partners Helps with Levy Utilisation
Pertama Partners works with Malaysian companies to maximise their HRDF levy utilisation through AI and digital skills training. We provide levy utilisation audits, recommend training programmes aligned with your business goals, and handle all HRDF documentation.
Frequently Asked Questions
Frequently Asked Questions
The HRDF levy is 1% of each Malaysian employee's monthly gross wages. For a company with RM200,000 monthly payroll, the levy is RM2,000/month or RM24,000/year.
HRDF contributions fund the training levy balance that your company can claim back when sending employees for approved training programmes. Think of it as a dedicated training savings account.
Temporary exemptions are available for companies in financial difficulty. Permanent exemptions apply to government bodies and companies below the mandatory employee threshold. Apply through PSMB with supporting documentation.
HRDF levy is typically deducted alongside EPF contributions. You can view your levy statements and payment status through the e-TRIS portal. Payment is due by the 15th of the following month.
Your levy balance accumulates over time. However, unused levy is essentially money your company has invested without getting returns. Aim for at least 80% utilisation by planning regular training programmes.
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