How to enable HRDF levy in PayrollPanda?

HRDF levy is a mandatory levy payment imposed by the Government on specified groups of employers for the purpose of employee training and skills upgrading. See this help article for a detailed explanation of who is eligible to contribute.

By default HRDF is disabled in PayrollPanda; to enable it, you have to go to Settings > Payment Details.

Once enabled the PayrollPanda app will auto-calculate HRDF for local employees based on the following:

  • 5 to 9 Malaysian employees: HRDF contribution of 0.5%

  • 10 and more Malaysian employees: HRDF contribution of 1%

The HRDF contribution is calculated based on basic salary plus any fixed allowances. If a payroll item is considered an allowance and was added as a recurring payroll item then it’s included in the calculation. For more information regarding recurring payroll items, see this help article.

Furthermore, the following payroll items affect the HRDF calculation:

  • Salary Back Pay: called Advance Payment and/or Salary Deduction in the PayrollPanda app
  • Leave Pay: called Holiday in Lieu in the PayrollPanda app
  • Unpaid Leave: If an employee took unpaid leave the amount will be deducted from the basic salary and the fixed allowance for the HRDF levy calculation. In PayrollPanda you have to enable auto-unpaid leave calculations in Settings > Payment Settings. For recurring allowances you can enable prorating in case of unpaid leave under Employee Settings > Employment Details.


Example HRDF Levy calculation:

For example if you’re contributing 1% and your employee earns RM 3,000.00 plus a fixed allowance of RM 250.00, the calculation for the HRDF levy is as follows: (MYR 3,000.00 + MYR 250.00) * 1% = MYR 32.50


This help article was compiled for version 0.48.1 of app.payrollpanda.my

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