In Malaysia, employers are obligated to register with Human Resources Development (HRD Corporation) to make their HRDF levy payment. Any employer that is not registered will be either fined (not more than RM10,000) or imprisoned (up to one year).
In order to avoid being penalised, continue reading to learn more about HRDF levy payments in Malaysia.
What is an HRDF Levy Payment?
An HRDF levy payment is a mandatory fee collected and managed by Pembangunan Sumber Manusia Berhad (PSMB).
Companies with ten or more Malaysian employees are required to register with PSMB. Employers are subject to pay 1% of each of their Malaysian employee’s monthly wages (including basic salary and fixed allowances).
On the other hand, HRDF registration is optional for companies with five to nine Malaysian employees. Employers will have to pay 0.5% of their Malaysian employee’s monthly wages (including basic salary and fixed allowances).
Step-by-Step Guide to HRDF Levy Payments
Submitting your HRDF levy payment in Malaysia is a simple process. Here are the steps you should follow:
1. Obtain your user ID and password for the e-TRiS system
2. Wait for an email that states your liability date for the levy payment
3. Login to the e-TRiS system through the HRDF Portal
4. Enter your username (MyCoID) and password
5. Select ‘Application’> ‘Levy’ > ‘Form 2 E-Slip’
6. Select ‘Levy’ as your payment type
7. Add the information needed in the ‘Levy Payment Information’ screen:
· Payment type
· Levy payment for the month
· Number of employees
· Total wages
· Total levy to be paid
8. Check your data on the ‘Payment Information’ screen
9. Check your payment detail and fill in your ‘Declaration’ information:
· Name of the officer in charge
· Identity card number
· Email Address
10. Make your payment on the e-TRiS website with either FPX, JomPAY or by manual payment
HRDF Levy Payment Exemptions in Malaysia
1. Two-Month HRDF Levy Exemption for July & August 2021 Salaries
This exemption is automatically granted to businesses that were affected by the Movement Control Order (MCO) in Malaysia.
Examples of industries eligible for this exemption include manufacturing, services, mining and quarrying, oil and gas, construction, trading and wholesale.
2. PEMULIH (or the ‘National Well-Being and Economic Recovery Package’)
In June 2021, the Malaysian government launched the ‘National Well-Being and Economic Recovery Package’ (also known as PEMULIH).
An economic recovery programme under the National Recovery Plan, PEMULIH was developed to assist with the recovery and conservation of the financial welfare of Malaysians affected by the COVID-19 pandemic.
A part of the PEMULIH recovery movement is reflected in the changes in the payroll process.
3. HRDF Payment Extension
The exemption of the HRDF levy payment has been extended until December 2021. The six months HRDF Levy exemption period (from July to December 2021) is for new employers in new sectors.
It is covered by the expansion of the Pembangunan Sumber Manusia Berhad Act 2001.