What is HRDF (Human Resources Development Fund)
HRDF - Human Resources Development Fund

The Human Resources Development Fund (HRDF) was established under the legal requirements of the Human Resources Development Act 1992 (currently known as the Pembangunan Sumber Manusia Berhad Act 2001). The HRDF is a pool of funds that consists of Human Resources Development levies collected from employers of the manufacturing and service sectors as listed in the First Schedule of the Pembangunan Sumber Manusia Berhad Act 2001 (liable registrants) as well as optional registrants.

In a simpler way to say, the HRDF was established with the aim of developing quality human capital and world-class workforce in order for Malaysia to achieve a high income economy based on knowledge and innovation.

What is HRDL (Human Resources Development levy)?

According to Section 14(1) of PSMB Act, 2001 a HRD levy, mandatory levy payment imposed by the Government on specified groups of employers for the purpose of employee training and skills upgrading  shall be paid by every employer to whom the PSMB Act, 2001 applies. Employers are liable to pay a Human Resource Development levy for each working employee at the rate of 1.0% of the monthly wages of the employee. Read more about HRDL.

What is the Benefits of HRDF?

Training grants are open to all employers registered and/or incorporated in Malaysia who have registered with PSMB and pay the HRD levy as to defray all or a major portion of the costs incurred in employee training. Financial assistance is given to employers that conduct training that is in line with their business operations.

Who should register with PSMB?

All employers in the following sectors (please refer to this table) are mandatory to register with PSMB. Under section 13(2), any employer who failed to register with PSMB may be fines up to RM10,000 or face one-year imprisonment or both.

The Amendment of the First Schedule is came into effect on 1 April 2017. The summary of the amendment of the First Schedule is as follows:

AmendmentImposed rate of HRD Levy
To standardise the minimum number of local employees to register with PSMB to ten (10) for all employers under the existing coverage and to delete the requirement for paid up capital for the Manufacturing, Mining and Quarrying sectors.1 per cent of the monthly wages of each of their Malaysian employees
To allow for voluntary registration to all employers under the existing 63 sub-sectors that employ five (5) to nine (9) local employees0.5 per cent of the monthly wages of each of their Malaysian employees

Here are 63 sub-sectors included

Manufacturing Sector
1. Electrical and Electronic
2. Metal Product
3. Mineral Product
4. Food and Beverages
5. Transport Equipment
6. Plastic
7. Wood & Wood based and Cork
8. Machinery
9. Industrial Chemicals
10. Paper and Pulp
11. Iron and Steel
12. Rubber Product
14. Furniture and Fixtures
15. Printing and Publishing
16. Textile and Apparel
17. Petroleum and Coal
18. Optical and Photography
19. Glass and Glass Product
20. Petroleum Refinery
21. Footwear
22. Ceramic
23. Tobacco
24. Leather

Mining and Quarrying Sector
1. Petroleum and gas extraction
2. Mineral and stone quarrying

Service Sector
1. Energy
2. Hypermarket/Supermarket/Departmental Store
3. Direct Selling
4. Commercial Land Transport and Railway Transport Services
5. Warehousing Services
6. Port Services
7. Hotel Industry
8. Freight Forwarding
9. Shipping
10. Air Transport
11. Tour Operating Business (In-bound only)
12. Postal or Courier
13. Telecommunication
14. Research & Development
15. Engineering Support & Maintenance Services
16. Security Services
17. Computer Services
18. Advertising
19. Private Hospital Services
20. Higher Education
21. Training
22. Gas, steam and air-conditioning supply
23. Water treatment and supply
24. Sewerage
25. Waste management and material recovery services
26. Food and beverage services
27. Production of motion picture, video and television programme, sound recording and music publishing
28. Information service
29. Tourism enterprise
30. Building and landscape services
31. Event management services
32. Early childhood education
33. Health support services
34. Franchise
35. Sale and repair of motor vehicles
36. Private broadcasting services
37. Driving school
38. Veterinary services

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