How To Determine HRDF Levy

Definition of Employee (PEMBANGUNAN SUMBER MANUSIA BERHAD ACT 2001 Part 1 Interpretation)
Any citizen of Malaysia who is employed for wages under a contract of service with an employer, but does not include any domestic servant

Scope of Coverage

• Citizen Malaysia
• Full-time Employment
• Fixed Term Contract
• Director receiving salary
• Apprentices

Exclusion

• Expatriate / Foreign Worker
• Expatriate / Foreign Worker
• Domestic Servant

Definition of Wages (PEMBANGUNAN SUMBER MANUSIA BERHAD ACT 2001 Part 1 Interpretation)
“wages” means the basic salary and fixed allowances or other emoluments of a like nature paid in cash by or on behalf of an employer to an employee, and includes any leave pay and arrears of wages

Imposition of Levy

Every employer to whom applies a human resources development levy in respect of each of his employees at the rate of one per centum （1% of the monthly wages of the employee

How to determine “Wages”?

Sample Of Levy Computation

Levy Payment Due Date
All payment of the levy shall be made by the employer not later than the 15th date of the month immediately following the month in respect of which those payments fall due

Regulation 8(1) of Pembangunan Sumber Manusia Berhad (Registration of Employers and Payment of Levy) Regulations 2001

This means that, every payment of levy shall be made before or on the 15th of the following month

Penalty of Late Payment (Pembangunan Sumber Manusia Berhad, Act, 2001
Section 18(1))
An employer who fails to pay within such period as may be prescribed, any levy due from him shall be liable to pay interest on the unpaid levy at the rate of ten per centum (10%) per annum in respect of each day of default or delay in payment

Interest : Total Levy Payment * Total Day of Late / 365 days * 10%

Example:-

• For June 2021 levy, employer has to pay levy before or on 15 July 2021
• In the event the employer pays levy on or after 16 July 2021, the interest of 10% will be imposed upon employer.