HRDF is a Malaysian government initiative aimed at encouraging the development of a highly skilled workforce. Employers in Malaysia are required to contribute to HRDF based on the wages they pay their employees, ensuring that employees have access to training opportunities that help boost their skills.
In this article, we’ll explain how HRDF contributions are calculated and provide guidance on effectively managing these calculations. Most of the system-generated Pay Elements in the Payroll module are already pre-configured to align with HRDF policies, ensuring accurate HRDF calculations.
Employer HRDF Contribution Rate
It's important to set the correct employer HRDF contribution rate in your payroll module. To do this, you can input the contribution rate directly on the configuration page:
Step 1: Log in to your payroll admin account, then navigate to Navigate to
Step 2: Click on
Step 3: Go to General Tab ➜ Company Details ➜ Scroll to Regional Section.
Step 4: From the dropdown menu, select the appropriate HRDF contribution rate for your company’s sector. This ensures the system uses the correct rate when calculating contributions.
By setting this configuration, your payroll system will automatically apply the correct contribution rate.
How to Include Additional Pay Elements in HRDF Calculation:
If your company has created additional Pay Elements and you would like the system to include these for HRDF calculation, please follow the steps below:
Step 1: Log in to the account.
Step 2: Go to .
Step 3: Click on .
Step 4: Select tab at the top.
Step 5: Click on sub-tab. You will see the list of Pay Elements available on the account.
Step 6: Look for the Pay Element that you’d like to include in the HRDF calculation and click on the under the Actions column.
Step 7: Put a tick on the HRDF box in the Criteria section.
Step 8: Click to save your settings.
HRDF Contribution Report
You can view the total HRDF amount in Payroll Report #14. This report provides the total HRDF contribution for employer reference.
Please note, that you may submit your HRDF contributions directly to HRD Corp Malaysia based on the figures reflected in Payroll Report #14.