One of the items that companies usually forget (or don't know) that they need to contribute is the HRDF Fund Contribution, which is 1% from the employee's salary. However, this is not a deduction. This is additional payment by the company to be paid to HRDF.
The following is more information on the HRDF Fund contribution levy:
Section 15(2) of PSMB Act, 2001 stipulates that there shall be paid by employer a HRD levy in respect of each of his employees at the rate of 0.5 per centum of the monthly wages of the employee (applicable to employer who opts to be registered).
An employer who is liable to pay the HRD levy shall pay those levies for the first and subsequent months' wages commencing from the date the employer becomes liable as stated under the Regulation 7 of the Pembangunan Sumber Manusia Berhad (Registration of Employers and Payment of Levy) Regulations 2001. The payment of the HRD levy is the responsibility of employers. Employers are not permitted to deduct the wages of employees under any circumstances for the payment of the levy.
In OfficeCentral payroll, HRDF levy contribution is automatically calculated when you select that you contribute to HRDF. This make it easy for you to calculate the monthly levy to remit payment to HRDF in timely manner.
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The following is more information on the HRDF Fund contribution levy:
Section 14(1) of PSMB Act, 2001 stipulates that there shall be paid by every employer to whom the PSMB Act, 2001 applies, a HRD levy in respect of each of his employees at the rate of one per centum (1%) of the monthly wages of the employee.
Section 15(2) of PSMB Act, 2001 stipulates that there shall be paid by employer a HRD levy in respect of each of his employees at the rate of 0.5 per centum of the monthly wages of the employee (applicable to employer who opts to be registered).
An employer who is liable to pay the HRD levy shall pay those levies for the first and subsequent months' wages commencing from the date the employer becomes liable as stated under the Regulation 7 of the Pembangunan Sumber Manusia Berhad (Registration of Employers and Payment of Levy) Regulations 2001. The payment of the HRD levy is the responsibility of employers. Employers are not permitted to deduct the wages of employees under any circumstances for the payment of the levy.
Which company need to register with HRDF? (Or also known as PSMB in Bahasa Melayu)
Section 13(1) of the PSMB Act 2001 stipulates that every employer who is covered under the Act is required to register with PSMB within such time and manner as may be prescribed.
Any employer who is convicted for not registering with PSMB may be fined up to an amount not exceeding RM10,000 or face imprisonment up to a year, or both (Section 13 (2)).
According to the First Schedule of PSMB Act, 2001, definitions of industries covered are as follows:
SUB-SECTOR / INDUSTRY | ELIGIBILITY CRITERIA | RATE OF LEVY PAYMENT |
---|---|---|
SERVICES SECTOR | ||
|
≥ 10 Malaysian Employees (mandatory to register)
5 - 9 Malaysian Employees (given option to register) |
1%
0.5% |
MANUFACTURING SECTOR | ||
Making or processing of an article by labour or machine or both, including the transformation of parts or components into another article of a different nature or character by way of altering, blending, ornamenting, finishing or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal, including the building of a ship or the assembly of parts of a ship. |
≥ 10 Malaysian Employees (mandatory to register)
5 - 9 Malaysian Employees (given option to register) |
1%
0.5% |
MINING & QUARRYING SECTOR | ||
| ≥ 10 Malaysian Employees (mandatory to register) 5 - 9 Malaysian Employees (given option to register) | 0.5% 1% |
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