HRD Corp 15% Levy Deduction: What It Is and How to Avoid It
HRD Corp deducted 15% of unused levy balances twice — for the 2023 balance, then for the 2024 balance (collected 1 March 2025) — affecting employers with a balance of RM50,000 or more and low utilisation. No deduction has been announced for the 2026 balance. Here is how it worked, who it hit, and how to keep your utilisation high if it returns.
What is the HRD Corp 15% levy deduction?
It is a 15% deduction from an employer's unused HRD Corp levy balance, redirected into Program Latihan MADANI to fund skills training for micro-SMEs and underserved groups. It has run twice, each authorised separately for one year: Employer Circular 2/2024 took 15% of the unused 2023 balance, and Circular 5/2024 took 15% of the unused 2024 balance after a grace period of 1 January to 28 February 2025, with collection from 1 March 2025. An employer was only affected if both criteria applied — an unused balance of RM50,000 or more, and levy utilisation below the threshold. HRD Corp has not published a circular applying this to the 2025 or 2026 balance, so there is no confirmed 2026 deduction; it ran two years running, so keeping utilisation high remains sensible planning. Check your balance and utilisation in e-TRiS, and watch hrdcorp.gov.my/circulars for any new circular.
Are You Affected by the HRD Corp Levy Deduction?
The deduction applies only when both of the following conditions are met at the same time. If only one condition applies, you are not currently at risk.
Levy balance exceeds RM50,000
Your accumulated unused HRDF levy balance in e-TRiS is above RM50,000. Employers who have been contributing for several years without actively claiming grants are most likely to hit this threshold.
Training utilisation is below 50% of annual contributions
The total value of approved training grants claimed in the assessment year is less than 50% of your annual levy contributions. For example, if you contribute RM120,000 per year, you must claim at least RM60,000 in approved training to stay above the threshold.
If your balance is below RM50,000 OR your utilisation rate is already above 50%, no deduction will be made. Focus on training utilisation only if both conditions apply.
How the 15% Levy Deduction is Calculated — Worked Example
The deduction is not applied to your entire balance. It targets only the unused amount that exceeds the 50% utilisation threshold. Here is a clear example:
| Item | Amount |
|---|---|
| Annual levy contributions | RM120,000 |
| Current unused levy balance | RM80,000 |
| Training claimed this year | RM30,000 (25% utilisation) |
| Required utilisation (50% of RM120,000) | RM60,000 |
| Training shortfall | RM60,000 − RM30,000 = RM30,000 short |
| Unused excess above threshold | RM80,000 − RM60,000 = RM20,000 excess |
| 15% deduction applied to excess | 15% × RM20,000 = RM3,000 deducted |
*This is an illustrative example. The exact deduction amount depends on your annual contributions, current balance, and approved training claims for the assessment period. Refer to the official HRD Corp notice for precise calculation methodology.
How to Avoid the HRD Corp 15% Levy Deduction — 5 Actionable Steps
Monitor your levy balance monthly via e-TRiS
Log in to e-TRiS at etris.hrdcorp.gov.my at least once a month to track your levy balance and utilisation rate. Set a recurring calendar reminder on the first working day of each month. Knowing your numbers in advance gives you time to act before HRD Corp conducts its assessment.
Submit SBL-Khas applications for external training
SBL-Khas is the fastest HRDF grant scheme — applications are auto-approved with no prior approval needed. Submit on e-TRiS before or on the training start date. Enrol your employees in public programmes from registered providers immediately to push your utilisation rate above the 50% threshold.
Run in-house training programmes
In-house programmes allow you to train your entire workforce at once, maximising the total training hours claimed. Contact HRD Corp-registered providers to arrange a customised programme within 2–4 weeks. Popular in-house topics include leadership, communication, safety, and industry-specific technical skills.
Train multiple employee groups simultaneously
Do not limit training to one department. Send staff from HR, operations, sales, and finance to separate programmes at the same time. Parallel training across departments rapidly increases your total claimed hours and accelerates your utilisation rate toward the 50% target.
Engage multiple registered providers urgently
If your balance is approaching the RM50,000 threshold and your utilisation is low, contact 3–5 HRD Corp-registered providers simultaneously. Ask about immediate public programme slots or fast-track in-house arrangements. Providers experienced with urgent utilisation cases can often mobilise within 1–2 weeks.
Fastest Training Types to Claim Under HRDF
If you need to raise your utilisation rate quickly, these training types offer the fastest path from enrolment to approved claim.
| Training Type | Typical Approval Time | SBL-Khas Claimable | Notes |
|---|---|---|---|
| Public programmes (SBL-Khas) | 3–5 working days | Yes | Widest availability; immediate enrolment at most providers |
| Soft skills workshops | 3–5 working days | Yes | Communication, leadership, time management — run weekly in KL, PJ, Penang |
| Digital skills training | 3–5 working days | Yes | Excel, data analytics, digital marketing — many public slots available |
| Safety & compliance training | 3–5 working days | Yes | OSH, HIRARC, fire safety — mandatory training that counts toward utilisation |
| In-house workshops | 2–4 weeks (SBL) | Yes (if via registered provider) | Customised to your team; can train all employees at once for maximum utilisation |
Frequently Asked Questions
What is the HRD Corp 15% levy deduction?
HRD Corp has twice deducted 15% of employers' unused levy balance to fund Program Latihan MADANI, and each round was authorised separately for one specific year. Employer Circular 2/2024 covered the unused balance for 2023; Circular 5/2024 covered the unused balance for 2024, with a grace period of 1 January to 28 February 2025 and the deduction taking effect 1 March 2025. In both rounds an employer was affected only if two criteria were met together: an unused levy balance of RM50,000 or more, and a levy utilisation rate below the threshold. IMPORTANT: HRD Corp has not published a circular applying this deduction to the 2025 or 2026 balance. It ran two years consecutively so it may well recur, but there is currently no announced 2026 deduction — treat high utilisation as prudent planning rather than a confirmed 2026 obligation, and check hrdcorp.gov.my/circulars for a new circular. The deducted funds are pooled into HRD Corp's industry training fund for sector-wide programmes. The policy was introduced to encourage employers to actively use their accumulated levy rather than letting it sit idle.
How do I know if I'm affected by the 15% levy deduction?
In the two rounds that have run, an employer was affected only if both criteria applied together: an unused levy balance of RM50,000 or more, and levy utilisation below the threshold for that year. Meeting just one was not enough. Since no deduction has been announced for the 2025 or 2026 balance, nobody is currently "at risk" of a confirmed deduction — but the same two criteria are the ones to watch if a new circular is issued. Log in to e-TRiS to see your balance and utilisation rate, and note that HRD Corp gave a grace period and advance notice in both previous rounds rather than deducting without warning.
How can I avoid the HRD Corp 15% levy deduction?
To avoid the deduction: (1) Monitor your levy balance monthly via e-TRiS. (2) Submit training grant applications to bring utilisation above 50% of annual contributions. (3) Use the SBL-Khas scheme for quick-approval external training — approval takes 3–5 working days. (4) Consider in-house training programmes which can be registered and claimed quickly. (5) Train multiple employee groups simultaneously to maximise utilisation. HRDF-registered providers can often fast-track programme registration for employers needing to utilise their balance urgently.
What training can I claim quickly to avoid the HRDF levy deduction?
The fastest types of training to claim are public programmes from registered providers under SBL-Khas — approval is typically 3–5 working days. Soft skills, digital skills, and safety programmes are widely available as public programmes with immediate enrolment. In-house workshops can also be arranged within 2–4 weeks. Contact multiple registered providers simultaneously to compare availability and pricing if you need to utilise your balance urgently.
Find HRDF-Registered Providers to Utilise Your Levy
Browse our directory of HRD Corp-registered training providers across Malaysia. All offer SBL-Khas eligible programmes — many can mobilise within 1–2 weeks for urgent utilisation needs.
Related Resources
Last deduction: 1 March 2025, against the unused 2024 balance (Employer Circular 5/2024). No circular published for the 2025 or 2026 balance as at August 2026. Verified August 2026 against hrdcorp.gov.my/circulars.