Expansion of HRDF Act 2001

PSMB Act 2001 stipulates that all employers with nature of business covered under the First Schedule of the Act will need to register as HRDF employers and are responsible to pay a monthly Human Resource Development (HRD) levy from the company’s monthly wages plus fixed allowances to HRDF.

Mandated by the Malaysian Government in 11th Malaysia Plan (11MP), the access to Human Resource Development Fund (HRDF) is now expanded to all industries, effective 1st March 2021.

If your company employs a minimum of ten (10) Malaysian employees, it is compulsory for your company to register. If your company only employs five (5) to nine (9) Malaysians, you are given an option to register with HRDF. Registration can be performed online.

Regulation 4(1) of the Pembangunan Sumber Manusia Berhad (Registration of Employers and Payment of Levy) Regulations 2001 states that an employer to whom the Act applies on the date of coming into operation of these regulations shall submit Form 1 to HRDF not later than 30 days.

Based on our understanding of this regulation and our correspondence with HRDF, this means that employers are required to submit Form 1 to register as a HRDF employer by 31st March 2021.

The monthly levy will be calculated as 1% of the employee’s basic salary plus fixed allowances for mandatory contributions or 0.5% for optional contributions.

New employers that are now eligible to contribute are given an exemption of HRD levy for three (3) months from 1 March to 31 May 2021. Therefore there is still time for employers to prepare for the monthly contribution. However we advise to complete the employer registration by 31 March 2021 to avoid any possible penalties.

Link: HRDF announcement on the expansion

Visit HRDF website to find out more about the benefits and value proposition of becoming a HRDF registered employer.

Contact us to enquire about payroll outsourcing services to ensure your payroll process is compliant to the changing Malaysia regulations. Focus your time on running the business.

Link to our Facebook post: https://www.facebook.com/rockacc/posts/3939392209458207



Lunar New Year Promo: 50% off Xero Subscription for 3 Months

Thinking of moving to Xero? Celebrate the “niu” year by getting 50% off your monthly subscription fee for 3 months if you sign up for …

HR & Payroll

Enhanced Program Subsidi Upah (PSU) 3.0 Under Permai Scheme

Effective 19 January 2021, PSU 3.0 has been enhanced as part of the Permai Assistance Package (Permai) to be open to all employers operating within …

HR & Payroll

Employers: Employee Related Notifications to IRB Malaysia

Employers in Malaysia have to take note of the notifications that have to be submitted to IRB Malaysia (LHDN) when new joiners are employed by …

HR & Payroll

New 2021 PCB/TP3 Form

LHDN has released an amended version of the PCB TP3 form starting from 1 January 2021. Find the new TP3 form here. Or download the …

HR & Payroll

Program Subsidi Upah (PSU) 3.0

PSU 3.0 has been launched to help tourism/retail industries and businesses who have been badly affected by Covid-19. You may start to apply from 1 …

Are you preparing your company accounts for the right reasons?

Are you preparing your company accounts for the right reasons?

Business compliance vs business performance “How often do you prepare your company accounts?” If you ask this question, many Malaysian businesses today will say they …

HR & Payroll

EPF: Voluntary Excess Khas 2021 Application

For employees who wish to contribute 2% above the statutory rate of 9% (i.e. at 11%) for EPF, employers will need to submit the data …

Cloud Apps

EPF: Employee Contribution (9% or 11%)

Beginning 14 December 2020, employers can start submitting their employees’ applications to maintain the statutory contribution rate for employees at 11 per cent. All submissions …

Cloud Apps

Xero Awards 2020 Asia: We’re A Finalist!

In what has been a turbulent year for many business around the region and in the world, we’re so excited to announce that RockAcc Solutions …

Scroll to Top