HRDF HRD Corp Levy Calculation

Section 2 of the PSMB Act 2001

Employee
Any Malaysian citizen who is employed for remuneration under a contract of service (full-time contract or permanent staff) with an employer, excluding domestic servants. If the company director, owner, or partner is given a salary, he or she is considered an employee, but a director who just receives director fees is not considered an employee.

Wages
Basic salary and fixed allowance or other similar emoluments of a similar nature paid in cash by or on behalf of an employer to an employee, and includes any leave pay and arrears of wages, but DOES NOT INCLUDE:

• Any pension fund or redundancy.
• Any travel allowance or the monetary amount of any travel concession.
• Any allowances paid under the terms of an apprentice contract.

Example of wages Exempted from Levy Calculation:

• Bonus and commission payments
• Gratuity on discharge or retirements
• Fund or plan contribution to employee welfare or perks.
• Travel expenses, including gasoline and transportation allowances
• Apprenticeship
• Special expenditures

Example of non-fixed allowance Exempted from Levy Calculation:

• Overtime payment
• Night work compensation
• Shift compensation
• Attendance allowance (whose amount fluctuates month-to-month)
• Production motivation
• Other similar forms of subsidies

Example : Current Levy

Levy month = Salary month
01/2022 = January 2022

• -Payment prior to or on February 15, 2022, and payment within 15 days of the next month.
• -A payment paid after the 15th day of the next month is considered to be in arrears as a result of exceeding the specified time.

LEVY = [(BASIC SALARY – UNPAID LEAVE) + FIXED ALLOWANCE] x 1%

Section 14 of the PSMB Act 2001

Human resources development levy of 1% of the employee’s monthly wage must be paid by all employers who are subject to this act.

Section 15 of the PSMB Act 2001

Employers with fewer than the required minimum number of employees may choose to be registered in the class listed in Part II of the First Schedule and pay a 0.5% levy on each employee’s monthly salary.

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