Why Need to Comply with HRDF Pay Corp Levy in Malaysia?
AI Overview:
- HRDF Pay – Levy Obligation: All Malaysian employers with 10 or more local employees are legally required to contribute to the HRDF Corp levy, while those with 5-9 employees can do so optionally.
- Expanded Coverage: Following the expansion of the PSMB Act in 2001, HRD Corp’s coverage grew from 63 to 238 subsectors, leading to a significant increase in registered employers.
- Consequences of Non-Compliance: Failure to register or pay the HRD Corp levy can result in legal penalties, including fines or imprisonment. The levy is a mandatory contribution for eligible companies.
Understanding the obligation to HRDF pay, now officially managed by HRD Corp, is crucial for employers in Malaysia. The rule is simple: if you are a Malaysian employer with 10 or more local employees, you are legally required to register with HRD Corp and contribute a monthly levy.
However, employers with a workforce of 5 to 9 Malaysian employees have the option to register and contribute at a lower rate. This compulsory or optional registration applies to businesses across a wide range of industries, as specified under the PSMB Act 2001, to ensure a broad base for national workforce development.
Expansion of HRDF Pay
Looking at data from recent years, the number of employers who HRDF pay has expanded significantly. For example, following the expansion of the PSMB Act in March 2021, HRD Corp’s coverage grew from 63 to 238 subsectors. Consequently, Who Needs to Pay HRD Corp Levy in Malaysia? skyrocketed from 33,000 in 2020 to over 67,000 in 2021, according to the official HRD Corp Industry Training Participation Report.
Fines and Penalties of HRDF Pay
Failing to register or to HRDF pay when required can lead to serious consequences, including fines and penalties. The levy, which is calculated based on each employee’s monthly wages, is a statutory obligation rather than an option.
Join us at SH IMPACT!
Ready to empower your team while fully utilizing your HRD Corp levy? As a certified HRD Corp Training Provider, SH IMPACT is your trusted partner. Contact us today to learn how our claimable training sessions can help you meet your compliance requirements and boost your company’s growth.
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