HRD Corp Levy and Training: A Practical Guide for Malaysian SMEs
What the HRD Corp levy is, who must register, and how SMEs can turn levy contributions into useful, well-planned staff training.
Many Malaysian employers pay the HRD Corp levy every month yet never use it. Training is one of the most practical ways to build capability, so it is worth understanding how the scheme works.
What is the levy?
HRD Corp (formerly PSMB) collects a monthly levy from eligible employers under the Pembangunan Sumber Manusia Berhad Act 2001. The money goes into a fund that employers can draw on to train their Malaysian employees through approved programmes.
Who needs to register?
Registration depends on your sector and the number of Malaysian employees. In general, larger employers in covered sectors must register and pay a levy as a percentage of monthly wages, while some smaller employers may register voluntarily at a lower rate. Eligibility is decided by HRD Corp, not by the employer, so confirm your status with them directly.
How can training be claimed?
The usual flow is:
- Register as an employer and keep your levy account in good standing.
- Choose a training programme and provider that fit a real business need.
- Apply for approval before the training starts, within HRD Corp's required timeline.
- Attend the training and keep attendance and evidence.
- Submit your claim within the allowed period after completion.
Missing the application or claim deadline is the most common reason claims fail, so build these dates into your HR calendar.
Make training worthwhile, not just claimable
- Start from a skills gap, such as customer handling, supervisory skills or payroll systems, rather than from what is on offer.
- Link training to KPIs so you can see whether it changed performance.
- Plan the year's training in advance and spread it across teams.
- Follow up after training: ask the employee to apply it and have the manager check.
Where TEM can help
We help SMEs review their training needs, link them to competency and performance frameworks, and organise the HR processes behind them.
This article is general information, not legal advice. Check the latest official guidance (HRD Corp, Ministry of Human Resources, Labour Department) for your situation.
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