The HRD Corp levy is 1% of monthly wages for employers with 10 or more Malaysian employees (mandatory), or 0.5% for those with 5 to 9 Malaysian employees who register voluntarily. The rate is set under the PSMB Act 2001 and confirmed on hrdcorp.gov.my.
Watch: How Much Is the HRD Corp Levy, and How Is It Calculated?
The HRD Corp levy is 1% of monthly wages (basic salary plus fixed allowances) for employers with 10 or more Malaysian employees, and 0.5% for employers with 5 to 9 who register voluntarily. Multiply your monthly wage bill by your rate: 10 staff on RM3,000 pay RM300 a month. It is due by the 15th of the following month, and the balance it builds can be claimed back against HRD Corp approved training.
Read the video transcript
How much is the HRD Corp levy?
How much is the HRD Corp levy, and how do you work out what your company owes each month? Here is the short answer, with real numbers.
It is one percent of monthly wages if you have ten or more Malaysian employees, and that is compulsory. With five to nine, you can opt in at half a percent.
Fewer than five Malaysian staff? There is no levy to pay.
What counts as wages for the levy?
So what counts as wages?
The levy is charged on basic salary plus fixed allowances, like a fixed transport, housing or shift allowance. Overtime, bonuses, commissions and other one-off payments are generally left out.
Payroll structures differ, so check how your own allowances are treated against HRD Corp's FAQ before you settle on a figure.
How do you calculate the levy each month?
Now, the calculation.
Take your total monthly wage bill, basic salary plus fixed allowances, and multiply it by your rate.
Ten staff on three thousand ringgit each is a thirty thousand ringgit wage bill, so three hundred ringgit a month. Twenty-five staff on four thousand pay a thousand. Fifty staff on five thousand pay two thousand five hundred.
And a seven-person company that opts in at half a percent pays about a hundred and twenty-two ringgit fifty.
A quick rule of thumb: at one percent, every ten thousand ringgit of monthly wages means a hundred ringgit of levy.
When is the HRD Corp levy due?
When do you pay it?
The levy is due by the fifteenth of the following month, so June's wages mean a payment by the fifteenth of July. Pay late, and HRD Corp can charge interest of ten percent a year on what is outstanding.
The simplest fix is to build it into your payroll run, every month.
How do you get your levy back?
And here is the part most employers miss.
The levy is not just a cost. Every month you pay it, it builds a balance in your employer account, and you can claim that balance against HRD Corp approved training.
Fifty staff on five thousand ringgit pay about thirty thousand a year in levy. That is a training budget you have already funded.
And a balance you never use does not sit there forever.
What should you do next?
So, what should you do next?
Count your Malaysian staff. If you have ten or more, register with HRD Corp using Form 1 on the employer e-system. Pay by the fifteenth every month. And plan training that lets you claim it back.
Carriera, in Setia Alam, is an HRD Corp approved training provider, and our programmes are claimable under SBL-Khas.
The full guide and a levy calculator are at carrieragroup.com.my. Rates can change, so always check hrdcorp.gov.my before you file.
If you are asking how much is the HRD Corp levy, the figure depends on a single thing: how many Malaysian employees you have. Carriera is an HRD Corp Approved Training Provider, and this guide explains the rate, what counts as wages, who must register, and how the monthly amount is actually calculated — with worked examples and the primary government source cited at each step. (For the first technical term, see our glossary.)
What is the HRD Corp levy rate in 2026?
How much is the HRD Corp levy as a percentage?
The HRD Corp levy is charged at 1% of monthly wages for employers with 10 or more Malaysian employees, and 0.5% for employers with 5 to 9 Malaysian employees who opt in. Both rates are set out word for word in HRD Corp's own terms and conditions for new registration, on its Registered Employers page:
For employers with 10 or more Malaysian employees, it is COMPULSORY to register with HRD Corp. The monthly levy is charged at the rate of 1% of the monthly wages of employees.
According to the same page, the smaller tier is an option rather than a duty: employers with 5 to 9 Malaysian employees "are given the OPTION to register with HRD Corp and if they choose to register, the monthly levy is charged at the rate of 0.5% of the monthly wages of employees". The choice is whether to register at all — once you have, the 0.5% is payable every month like any other levy.
| Malaysian employees | Registration | Levy rate | Applies to |
|---|---|---|---|
| 10 or more | Mandatory | 1% | Monthly wages (basic salary + fixed allowances) |
| 5 to 9 | Optional / voluntary | 0.5% | Monthly wages (basic salary + fixed allowances) |
| Fewer than 5 | Not required | — | No levy obligation |
Source: HRD Corp, Registered Employers and Employers FAQ, hrdcorp.gov.my (checked 17 June 2026).
What wages does the levy apply to?
What counts as wages for the HRD Corp levy?
The HRD Corp levy applies to monthly wages, which HRD Corp's calculation formula defines as basic salary plus fixed allowances. Its FAQ states the levy is (total wages or basic salaries + fixed allowances) × 1%, per hrdcorp.gov.my/faq. Fixed transport, housing or shift allowances are typically included; variable pay is generally not.
- Included: basic salary and fixed allowances (e.g. fixed transport, housing, shift allowances).
- Generally excluded: overtime, bonuses, commissions, and other variable or one-off payments.
Because individual payroll structures differ, you should confirm how your specific allowances are treated against the HRD Corp Employers FAQ before finalising a levy figure. Carriera does not advise on payroll classification — for that, refer to the source directly.
How do you calculate the levy?
How do you calculate the HRD Corp levy each month?
To calculate the HRD Corp levy, multiply your total monthly wages (basic salary + fixed allowances for all employees) by your applicable rate — 1% if you have 10 or more Malaysian employees, or 0.5% if you have 5 to 9 and registered voluntarily. The formula HRD Corp publishes is Levy = (basic salary + fixed allowances) × rate. If you would rather not work it out by hand, our HRD Corp levy calculator runs the same formula on your own headcount and monthly wage bill.
| Scenario | Malaysian staff | Avg. monthly wage | Total wage bill | Rate | Monthly levy | Annual levy |
|---|---|---|---|---|---|---|
| Small mandatory employer | 10 | RM3,000 | RM30,000 | 1% | RM300 | RM3,600 |
| Growing SME | 25 | RM4,000 | RM100,000 | 1% | RM1,000 | RM12,000 |
| Mid-size employer | 50 | RM5,000 | RM250,000 | 1% | RM2,500 | RM30,000 |
| Voluntary micro-employer | 7 | RM3,500 | RM24,500 | 0.5% | RM122.50 | RM1,470 |
Figures are illustrative calculations using the published rates only (HRD Corp, hrdcorp.gov.my). Your actual levy depends on your real wage bill and allowance structure.
These examples show the practical point most employers miss: the levy is a recurring, calculable cost — and every ringgit of it can be returned to you as funded training. A mid-size employer paying RM30,000 a year in levy has, in effect, a RM30,000 annual training budget already collected. Whether that budget is used or left idle is the difference our HRD Corp claim guide exists to address.
Who must register?
Who must register and pay the HRD Corp levy?
Any employer with 10 or more Malaysian employees must register with HRD Corp and pay the 1% levy; employers with 5 to 9 Malaysian employees may register voluntarily at 0.5%. Coverage was expanded to all industries effective 1 March 2021 under the PSMB Act 2001, per hrdcorp.gov.my.
Registration is a legal duty, not an option, once you cross the threshold. Under the PSMB Act 2001, an eligible employer must register with HRD Corp (by submitting Form 1 through the employer e-system) within the timeframe HRD Corp prescribes. Sectors that were once outside the Act — including services, retail and professional firms — now fall within its scope after the 2021 expansion, so an employer that grew past nine staff in the last few years may have an obligation it has not yet acted on.
Count Malaysian staff
If you employ 10 or more Malaysian employees, registration and the 1% levy are mandatory.
Register with HRD Corp
Submit Form 1 via the employer e-system on hrdcorp.gov.my under the PSMB Act 2001.
Pay monthly, then claim
Pay the levy each month, then claim it back against HRD Corp-approved training such as SBL-Khas programmes.
When is the levy due?
When is the HRD Corp levy due each month?
Registered employers must pay the HRD Corp levy by the 15th of the following month — for example, June wages generate a levy due by 15 July. HRD Corp's FAQ states that failing to pay by the stipulated 15th can attract penalties, including interest of 10% per year on outstanding amounts, per hrdcorp.gov.my/faq. Building the levy into your payroll run avoids both.
How is the levy different from the training claim?
The HRD Corp levy is the money you pay in; the claim is how you get it back by spending it on approved training. Paying the levy builds a balance in your employer account; claiming draws on that balance to fund courses. Carriera's programmes are delivered under the SBL-Khas scheme so that registered employers can apply their accumulated levy toward them — turning a statutory cost into upskilling. See our corporate training page for programme themes and our claim guide for the step-by-step. A balance you never draw on does not sit there indefinitely — see what happens to unused HRD Corp levy.
Primary sources, all checked 17 June 2026: HRD Corp — Registered Employers, Employers FAQ, Expansion of PSMB Act 2001, PSMB Act 2001. Rates and rules can change — always confirm the current figures on hrdcorp.gov.my for your own filing.
Turn your HRD Corp levy into trained people
If you are already paying the levy, you have a training budget waiting to be used. Carriera is an HRD Corp Approved Training Provider running SBL-Khas claimable programmes. Tell us your team and goals — we will map the courses to your levy. You can also reach us via our contact page.
WhatsApp Carriera →