Maximizing Your HRD Corp Levy...
Maximizing Your HRD Corp Levy: Avoid the 15% Deduction Starting 1 March 2025
- OTC Training Centre
- 17 January 2025
- News & Event

Are you aware of the HRD Corp update? If your company contributes to HRD Corp and hasn’t fully utilised its levy, take note of this critical update. Starting 1 March 2025, 15% of your unused levy balance could be deducted if your organisation meets the following conditions:
Who Will Be Affected?
Companies fulfilling both criteria below will be subject to the 15% deduction:
1️⃣ Levy Balance: RM50,000 and above (for the year 2024 only).
2️⃣ Levy Utilization Rate: Less than 50% of the employer’s total contribution between 1 January 2024 and 31 December 2024.
Understanding HRD Corp and Its Levy System
What is HRD Corp?
The Human Resource Development Corporation (HRD Corp), under Malaysia’s Ministry of Human Resources, is responsible for driving the nation’s talent development agenda. It collects levies from registered employers and provides financial support for employee training and upskilling programs.
What is the HRD Corp Levy?
The HRD Corp levy is a mandatory monthly contribution from registered employers to fund skill enhancement initiatives for local employees, apprentices, and trainees. This ensures businesses are equipped with skilled talent to remain competitive in an evolving economy.
Why is the HRD Corp Levy Important?
Utilizing the levy not only helps to upskill employees but also ensures businesses maximize their allocated training funds. Failing to utilize the levy can result in a loss of unused funds, especially with the upcoming 15% deduction policy for unused balances.
How is the HRD Corp Levy Calculated?
The levy is calculated as 1% of an employee’s monthly wages. The formula is:
Levy = [(Basic Salary - Unpaid Leave) + Fixed Allowances] x 1%
For detailed explanations, refer to the official HRD Corp support page.
Grace Period: 1 January to 28 February 2025
To give companies an opportunity to avoid the 15% deduction, HRD Corp has introduced a two-month grace period from 1 January to 28 February 2025. Employers are encouraged to utilize more than 50% of their levy for training purposes during this period.
Tips to Avoid the 15% Levy Deduction
Here are some proactive steps your company can take:
- Maximize Levy Utilization: Schedule and complete training programs before 28 February 2025.
- Plan Ahead: Identify skill gaps and allocate resources for training programs early.
- Leverage HRD Corp Training Programs: Enroll your employees in certified HRD Corp training courses to meet levy utilization requirements.
Why Utilize the Levy?
Failing to use your HRD Corp levy funds means missing out on the opportunity to invest in employee development, which can enhance productivity, retention, and organizational growth. The levy is a valuable tool for building a skilled workforce without putting a strain on your company’s finances.
HRD Corp Programs You Should Consider
Explore HRD Corp’s wide range of certified training programs, such as:
- Industry-relevant workshops
- Upskilling programs for emerging technologies
- Soft skills training tailored for leadership and communication
Conclusion
The HRD Corp levy is a vital investment in your company’s growth and workforce development. With the new policy in place, it’s crucial for employers to act swiftly and make the most of their levy funds to avoid unnecessary deductions.
Start planning your training programs today and take full advantage of this resource to drive business success.
For more details, visit the HRD Corp website
or consult their FAQ page.
Need Assistance?
If you’re unsure where to start, reach out to our team OTC Training Centre Sdn Bhd. We can help you select training programs that align with your organization’s goals while maximizing your levy usage.
Don’t wait—start planning now and avoid unnecessary deductions!
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