The 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.
To know who is eligible to contribute, check this article out.
HRDF contributions are disabled by default. The setting can be modified as follows:
Four types of options are available for you to choose from the drop-down menu: None, Automatic, 0.5% and 1%.
If HRDF is set as Automatic, the app will calculate the contribution based on the following rates:
Please note, as per HRDF regulations, once you reach 10 Malaysian employees you must continue contributing at 1% for the whole calendar year even if your headcount falls to fewer than 10 employees during the year.
The HRDF contribution is calculated based on basic salary plus any fixed allowances EXCEPT:
If a payroll item is added under the Allowance category as a recurring payroll item, it will also be included in the calculation. For more information regarding recurring payroll items, see this help article.
Take note that the following payroll items will affect the HRDF calculation:
Example of HRDF levy calculation:
If you are contributing 1% and your employee earns RM3,000 plus a fixed allowance of RM250, the calculation for the HRDF levy is as follows:
(RM3,000 + RM250) * 1% = RM32.50
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