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The HRDF or Human Resource Development Fund is an organization in Malaysia that raises fund from the employers of manufacturing and service sectors under recommended categories. The aim for raising this fud is to provide skill training and certifies workforce in Malaysia. It was established in 1993, under the Human Resources Development Act 1992. It is currently known as PSMB ACT 2001, or Pembangunan Sumber Manusia Berhad ACT 2001. This particular organization lies under the Ministry of Human Resource in Malaysia.
This HRDF exclusively put their focus on skilling up human workforce and provides qualified training courses to upgrade skilled workforce in this nation. The ultimate goal is to enforce workers and getting them ready for future industrial needs. Human resource development fund (HRDF) in Malaysia is made compulsory by the government. It is therefore mandatory to be under this program when the company falls under the category set by the government.
By now we must have an idea about HRDF fund. However, through this article we will gather in-depth knowledge idea about HRDF levy, advantages of HRDF, eligibility criteria for this particular fund program, various training schemes this HRDF program includes and finally the application process for HRDF fund program.
The HRDF accommodates a mandatory levy called HRD levy according to Section 14(1), of PSBM Act, 2001. The levy for all employers is implacable under PSBM Act 2001. The defines that employers are liable to pay a 0.5% to 1% levy behalf of each employee working in the company, on a monthly basis. From the wages of each employee.
The HRD fund scheme has been introduced to ensure welfare and skill building of employees. The fund eventually bears costs of their skill development by introducing them with various professional skill development trainings. Wherever applicable, an employer of the company has to pay an amount at a rate of 0.5% to 1% foreach employee working in the company. This will eventually be used as grants for various training courses and workshops for their employees. In summary, this particular fund covers an employee's training expanses.
Under HRDF many skill programs are also included for the benefit of employees. The aim of HRDF or locally called PSMB is to provide resource rich knowledge sharing and thereafter create a skill development environment for employees to build skilled and resourceful employee database in Malaysia. Human Resource Development fund has two separate criteria
Both categories grant allowances for company employers to pursue HRDF schemes to encourage building skilled workforce in Malaysia.
According to the Section 13(1) of PSBM Act 2001, every employer under HRDM enlisted companies are eligible for this this levy program. Every employer has to register with PSMB. If an employer of a company in Malaysia try to Skip it or ignore the monthly grant submission, he/she will be entitled to pay a fine of RM 10,000. Disobeying this levy can also lead an employer to an imprisonment of up to a year under Section 13 (2).
The HRDF levy however is not the same for all company employers. The rate of levy depends on the work heads a company consist of. Following are the two eligibility criteria for HRDF levy in Malaysia:
Here are the step by step application process for HRDF application for the convenience of company employers in Malaysia:
Step 1: Apply online through e-TRIS system or Electronic Transformed Information System. This online service is relatively new from HRDF which makes the registration and monthly fund transection process with PSMB more convenient.
For this process following documents are required:
Step 2: Once applied successfully online, the applicant has to wait for the approval.
Step 3: Once approved, company employer has to claim for the grant. An employer has to come up with following documents for successful claim:
How to claim HRDF?
To check the current status and report of the claim, an applicant has to go through following steps:
Or, Select ‘Daily Claim Listing for Employers’ for getting claim report.
We have come up with service sectors which have been enlisted for the Human Resource Development fund program in Malaysia. Following are the business sectors under this particular scheme:
PSBM grants various professional skill buildup schemes that employer of an enlisted company can undertake for his/her company employees’ skill buildup. Following are several recommended initiative schemes offered to the employer:
PSBM scheme of Malaysia or HRDF in Malaysia also grants multiple schemes devised for employers: Some of those schemes are:
All these training programs under HRDF in Malaysia demands their own respective application requisitions. Each individual training possesses different objectives and training contexts. Therefore, to keep things clean and understandable, it is wise to be connected to a business consultant or business expert. It will provide an in-depth advice about various schemes and programs under the concern of Human resource development fund or PSBM grant in Malaysia.
What is HRDF?
HRDF also called Human Resource Development Fund is an organization governed under the ministry of Human Resource in Malaysia that was established in 1993 under Pembangunan Sumber Manusia Berhad Act 2001 (PSMB ACT 2001).
What are the steps of HRDF claim in Malaysia?
Following are the HRDF claiming steps in Malaysia:
Is HRDF Mandatory in Malaysia?
Yes, as long as you have 10 or more than 10 employees working in your company you have to pay 1% levy. However, if the employee number is less than 10, the levy rate is 0.5%.
How can I calculate HRDF rate?
We use following formula for calculating the HRDF rate:
HRDF levy = HRDF Levy% x (Basic Salary + Fixed Allowances).