HRD Corp Levy: Who Pays, How Much, and How to Claim Training Funds

The Human Resources Development Corporation (HRD Corp) levy is one of the most misunderstood employer obligations in Malaysia. Thousands of businesses pay the monthly levy but never claim the training funds they are entitled to. According to HRD Corp's 2025 Annual Report, only 47% of registered employers made at least one training claim during the year, meaning more than half of contributing businesses left money on the table. That is money your business already paid, sitting unclaimed while your competitors use theirs to upskill their teams.

This guide covers who must pay the levy, how much it costs, what training you can claim for, and the step-by-step process to get your money back.

What Is the HRD Corp Levy?

The HRD Corp levy is a mandatory contribution that certain Malaysian employers must make to fund employee training and development. Established under the Pembangunan Sumber Manusia Berhad Act 2001 (PSMB Act), the levy creates a pooled fund that employers can draw from to subsidise approved training programmes for their workers.

The concept is straightforward: employers contribute a small percentage of payroll each month, and in return, they can claim reimbursement for employee training costs from the fund. The system is designed to encourage continuous workforce development across Malaysian industries.

HRD Corp (formerly known as HRDF, rebranded in 2021) administers the fund, approves training providers, and processes claims.

Who Must Pay the HRD Corp Levy?

Mandatory Registration

Employers in the following categories must register with HRD Corp and pay the levy:

Manufacturing sector: All employers with 10 or more Malaysian employees

Service sector (61 sub-sectors): All employers with 10 or more Malaysian employees in designated service sub-sectors, including:

• Hotels and restaurants
• Telecommunications
• IT and computer services
• Private healthcare
• Retail and wholesale trade
• Professional services (accounting, legal, engineering, architecture)
• Education and training
• Logistics and transport
• Beauty and wellness services
• Property management and real estate

Mining and quarrying: All employers with 10 or more Malaysian employees

The full list of 61 designated service sub-sectors is published on the HRD Corp website and was last expanded in 2023.

Voluntary Registration

Employers with 5-9 Malaysian employees in the designated sectors may register voluntarily. Once registered, the levy becomes mandatory and cannot be reversed.

Exemptions

Government agencies, statutory bodies, and local authorities are exempt. Employers with fewer than 5 Malaysian employees are not eligible to register.

Dr. Sayuti Ab Karim, Group Chief Executive of HRD Corp, stated in the organisation's 2025 annual report: "The expansion of registered employers to over 90,000 in 2025 reflects growing recognition that workforce development is an investment, not a cost. Our challenge now is ensuring every ringgit contributed translates into actual training delivered."

How Much Is the Levy?

The levy rate depends on the number of Malaysian employees:

Employee Count	Levy Rate	Calculation
10 or more employees	1% of monthly payroll	Total monthly wages of all Malaysian employees x 0.01
5-9 employees (voluntary)	0.5% of monthly payroll	Total monthly wages of all Malaysian employees x 0.005

Important clarifications:

• "Monthly payroll" includes basic salary, fixed allowances, and commissions. It excludes overtime, bonuses, and employer EPF/SOCSO contributions.
• Only Malaysian employees count toward the headcount threshold and payroll calculation. Foreign workers are excluded.
• The levy is calculated on the total payroll of all Malaysian employees, not just those earning above a certain threshold.

Example calculation:

A beauty salon with 12 Malaysian employees and a total monthly payroll of RM36,000:

• Levy = RM36,000 x 1% = RM360 per month
• Annual levy = RM4,320

This RM4,320 can be claimed back through approved training programmes, effectively making employee training free or heavily subsidised.

What Training Can You Claim For?

HRD Corp funds a wide range of training schemes:

Training Schemes Available

SBL-Khas (Skim Bantuan Latihan Khas): The most commonly used scheme. Employers send employees to training programmes conducted by HRD Corp-registered training providers. Covers course fees, allowances, and related expenses.

SBL (Skim Bantuan Latihan): For customised in-house training programmes where the employer engages a trainer to conduct training at their premises.

PLB (Pelan Latihan Berkembar): Structured on-the-job training combined with classroom instruction, suitable for technical skills development.

PROLUS (Programme for Upskilling and Reskilling): Specifically designed for workers affected by economic disruption, covering longer-duration reskilling programmes.

Industrial Training (IT): Placement of polytechnic and university students at employer premises, with the employer receiving a training grant.

Eligible Training Areas

Covered training spans virtually every business function:

• Technical skills specific to your industry
• Management and leadership development
• IT and digital skills
• Safety and health training (OSHA compliance)
• Quality management and process improvement
• Customer service and communication skills
• Financial management and accounting
• Marketing and sales skills
• Language proficiency
• Soft skills and team development

What Is Not Covered

• Academic qualifications (degrees, diplomas) from universities
• Training for foreign workers
• Conferences and seminars where the primary purpose is networking rather than skill development
• Team-building activities without structured learning outcomes
• Training by providers not registered with HRD Corp

Step-by-Step: How to Make a Training Claim

Step 1: Check Your Levy Balance

Log in to the HRD Corp eTRiS (electronic Training Information System) portal at etris.hrdcorp.gov.my. Your dashboard shows your current levy balance, claim history, and available funds.

Your claimable amount depends on your levy category and contribution history. Employers with consistent contributions typically have 100% of their cumulative levy available for claims.

Step 2: Select an Approved Training Programme

Browse HRD Corp's directory of registered training providers and approved programmes. You can search by topic, location, duration, and price.

Alternatively, you can propose a training programme with a non-registered provider through the SBL scheme, though approval takes longer.

Step 3: Submit a Grant Application

For SBL-Khas claims (the simplest route):

1. Log in to eTRiS
2. Select "Grant Application"
3. Choose the scheme (SBL-Khas for external training)
4. Fill in the training details: course name, provider, dates, employee names, cost
5. Submit at least 5 working days before the training start date

For SBL claims (in-house training), submit at least 10 working days before.

Step 4: Attend the Training

Employees attend the approved training. The training provider will record attendance, which is required for claim processing.

Step 5: Submit the Claim

After training completion:

1. Log in to eTRiS
2. Submit the claim with supporting documents: training provider invoice, attendance records, and programme completion certificate
3. Submit within 6 months of training completion

Step 6: Receive Reimbursement

HRD Corp processes approved claims within 14-21 working days. Reimbursement is paid directly to the employer's bank account.

Maximising Your HRD Corp Claims

Track Your Levy Balance

Many businesses lose track of their accumulated levy balance. Set a quarterly reminder to check your eTRiS balance and plan training accordingly.

Plan Training Annually

Create a simple training calendar at the start of each year. Map each employee's development needs to available HRD Corp-approved programmes. This prevents the year-end scramble that many businesses face.

Use Claimable Conferences and Workshops

Industry conferences with structured learning components can qualify for HRD Corp claims if conducted by registered providers. This turns an existing business expense into a claimable cost.

Pool Claims for Team Training

Sending multiple employees to the same programme is more efficient for claims processing and often qualifies for group discounts from training providers.

Businesses running on platforms like EzFlow can use staff scheduling features to plan training days without disrupting operations, ensuring that training attendance does not create staffing gaps during busy periods.

Common Mistakes to Avoid

Submitting late applications: Grant applications must be submitted before training starts. Retrospective applications are not accepted.

Missing the 6-month claim deadline: Claims must be submitted within 6 months of training completion. HRD Corp does not accept late claims.

Using non-registered providers without prior approval: If your chosen trainer is not in HRD Corp's registry, you need SBL scheme approval in advance.

Forgetting to include all eligible costs: Beyond course fees, you can claim daily allowances, accommodation (for outstation training), and meal allowances within HRD Corp's approved rates.

Not keeping attendance records: Missing or incomplete attendance records are the most common reason for claim rejection.

Frequently Asked Questions

Can I claim back more than I contributed?

No. Your claims are limited to your accumulated levy balance. However, unused levy balances carry forward, so consistent contributors build a larger pool over time.

What happens to my levy if I never make a claim?

Your levy contributions remain in the fund. HRD Corp does not refund unclaimed levies. If you deregister (e.g., your headcount drops below the threshold), the accumulated balance is forfeited.

Can I use HRD Corp funds for online training?

Yes, since 2020. HRD Corp approved online and blended learning programmes as claimable. The training provider must be registered, and attendance verification must still be documented.

How long does it take to get reimbursed?

Approved claims are typically processed within 14-21 working days. Incomplete documentation extends this timeline. The most common delay is missing attendance records.

Does the levy apply to part-time employees?

Part-time employees count toward your headcount if they are Malaysian citizens. Their wages are included in the payroll calculation for levy purposes.

Key Takeaways

• Only 47% of registered HRD Corp employers claimed training funds in 2025, meaning over half of contributing businesses left their money unclaimed
• The levy is 1% of monthly payroll for businesses with 10 or more Malaysian employees, and 0.5% for voluntary registrants with 5-9 employees
• Claims must be submitted through the eTRiS portal, with grant applications lodged before training begins and claims filed within 6 months of completion
• Eligible training covers technical skills, management, IT, customer service, safety, and virtually every business function
• Over 90,000 Malaysian employers are now registered with HRD Corp, contributing to a fund designed to subsidise workforce development across the economy