What is the HRD Corp (HRDF) levy and is it mandatory for my company?
The HRD Corp levy is a monthly payroll-based contribution that funds training. According to HRD Corp's FAQ, employers in covered sectors with 10 or more Malaysian employees must register and pay 1% of monthly wages; employers with 5 to 9 may register voluntarily and pay 0.5%.
HRD Corp (formerly PSMB) collects a levy under the Pembangunan Sumber Manusia Berhad Act 2001.
Position as at October 2026, according to HRD Corp's FAQ
- Employers with 10 or more Malaysian employees in covered sectors must register, and pay 1% of monthly wages
- Employers with 5 to 9 Malaysian employees may register voluntarily and pay 0.5%
- The levy is calculated on monthly wages plus fixed allowances
- Some sectors and bodies are outside the Act, such as labour unions, religious organisations and government bodies
- A registered company with fewer than 10 Malaysian employees for three consecutive months, and no levy or interest arrears, can apply to deregister
Accounting
- Expense the levy as a payroll cost
- Hold a payable until you pay
- Training claims you later receive reduce the cost or are recorded as income, depending on the nature
Practical
- Register on the HRD Corp portal and pay the levy by the monthly due date shown there
- Keep the evidence of claims for approved training
Because it depends on sector, headcount and nationality, ask your accountant to confirm applicability before you register or skip it, and check HRD Corp's site for any change to the tiers.
Legal basis
- Pembangunan Sumber Manusia Berhad Act 2001
Sources
Applies to 2026 · Last reviewed 29 October 2026
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
Related questions
- What should I look for when choosing accounting software?Choose software that handles Malaysian needs: SST, e-Invoicing through MyInvois, payroll statutory contributions, ringgit and foreign currency, bank feeds and a clear audit trail. Check data export, support, user permissions and total cost. Cloud versions make it easier to share access with your accountant.
- Should I do bookkeeping myself, hire a bookkeeper or outsource it?Do it yourself when transactions are few and you have the time and discipline. Hire in-house when volume justifies a regular role. Outsource when you want expertise without a full salary. Whichever you choose, the directors stay legally responsible for the records.
- What is the difference between bookkeeping and accounting in Malaysia?Bookkeeping is the day-to-day recording of transactions: sales, purchases, payments and receipts. Accounting uses those records to prepare financial statements, interpret results and support decisions and tax filing. Good bookkeeping comes first, because accounts can only be as reliable as the entries beneath them.
- Is a Sdn Bhd legally required to keep accounting records?Yes. Section 245 of the Companies Act 2016 requires every company, including its directors and managers, to keep accounting and other records that explain its transactions and financial position. This applies even to a new, dormant or loss-making company.
- How long must a Malaysian company keep its accounting records?A company must keep accounting records for seven years after the transactions they record were completed. For tax, documents must be kept for seven years from the end of the relevant year of assessment. Use whichever period ends later.