If your company has been contributing to HRD Corp, there is an important question you need to ask:
Is your HRD Corp levy being used — or quietly expiring?
Many Malaysian employers diligently pay the required levy every month but later discover that a portion of their levy has expired, been forfeited, or is no longer claimable, simply because it was left unused for too long. Unfortunately, this is a situation happening to more organisations than you might think.
This article explains:
- What happens when your HRD Corp levy goes unused
- Why levy forfeiture happens
- What employers risk losing
- How to protect your levy before it disappears
What Is the HRD Corp Levy?
Under the Pembangunan Sumber Manusia Berhad (PSMB) Act 2001, eligible employers contribute 1% of their employees’ monthly wages to HRD Corp.
In exchange, organisations are entitled to claim training funding to develop their workforce through approved learning and development programmes.
On paper, it sounds simple: You contribute → You train → You claim.
But in reality, many employers unknowingly fall into the “unused levy trap.”
The HRD Corp “Use It or Lose It” Rule
HRD Corp has clearly stated regulations to ensure that levy funds are not left idle. One of the most critical rules is the 24-month utilisation requirement.
💥 The Reality
If levy funds are not utilised within 24 months, they may be subject to:
- Forfeiture
- Deductions
- Reduction of accessible balance
In many cases, organisations discover this too late, especially when levy balances are high but training plans were never properly implemented.
On top of that, certain initiatives and national programmes have also introduced additional deductions on unused levy balances in specific situations, further increasing the risk of employers losing part of their funds.
What Happens If You Don’t Use Your Levy?
Financial Loss
Lost Training Opportunities
Weaker Organisational Readiness
Without continuous development, execution slows, leadership gaps widen, and competitiveness drops and in today’s economy where capability determines survival and growth, losing training resources is not just a technical issue but a serious strategic setback.
