HRDF Levy Calculation & Setup Guide

This article explains how Worksy calculates the Human Resources Development Fund (HRDF) levy, so you can ensure accurate deductions and stay compliant with HRDCorp requirements.

Follow these important steps:

1. Set the HRDF levy percentage in Company Settings.

2. Mark relevant earnings as subject to HRDF in Payroll Items.

3. Enable HRDF for applicable employees in their Employee Profile.

1. Company Settings

Before the system can calculate HRDF, you’ll need to set the correct levy percentage.

Step 1

From the left menu, go to Setting (a) > General (b) > Company (c). Select your company from the listing. 

Step 2

Click on the Statutory tab to view all statutory bodies. Go to HRDF section (d).

Fill in the Levy Calculation (e) field. 

According to HRDCorp:

• Section 14 of the PSMB Act 2001
  Every employer to whom this act applies shall be subject to a HRDF levy at 1% of the employee’s monthly wages.

• Section 15 of the PSMB Act 2001
  An employer with fewer than the required minimum number of employees may opt to register under Part II of the First Schedule, and shall pay a levy of 0.5% of the employee’s monthly wages.

Once filled in, click Save.

2. Payroll Items

The HRDF formula used is:

LEVY = [(Basic Salary – Unpaid Leave) + Fixed Allowances] × Levy %

This means all fixed allowances must be marked as subject to HRDF. You can configure this through Payroll Items in the system.

Step 1

On the left menu bar, go to Settings (a) > Payroll (b) > Payroll Items (c).

Step 2

From the Earning tab, choose any payroll item that should be included in HRDF, or click Add New to create a new one.

Step 3

Fill in the details and tick the HRDF checkbox to ensure this earning is included in the levy calculation.

Once done, click Save.

3. Employee Profile

Finally, check the HRDF setting in each employee’s profile under the Bank & Statutory tab. The system will capture the employee’s basic salary as the base amount for HRDF.

Step 1

On the left menu, go to Employee (a) > Directory (b) > Choose employee.

Step 2

In the Bank & Statutory tab, scroll to the Other Statutory section, tick the HRDF checkbox.

Click Save when done.

Once all three settings above are configured, Worksy will automatically calculate the HRDF amount during payroll processing. You can view the calculated levy in Payroll Review, under the Statutory Information column.

Facing error? This might help you:

• What Does EPF / SOCSO / EIS / TAX Base in Payroll Review Mean?
• The Income Tax, EPF, SOCSO, EIS, HRDF amounts are not tally with my existing payroll records
• Statutory Deductions and Employer Contributions List

We hope this explanation clarifies the matter. If you require additional assistance, do not hesitate to contact our support team.