Is your software development HRDF claimable in Malaysia? Short answer: generally no. You cannot take a RM80,000 custom build quote, submit it to HRD Corp, and expect a refund. The levy funds training, not software construction. (For the build-side numbers this decision sits on top of, see our guide to custom software cost Malaysia.)
But that's not the full picture. There are three real routes where software-adjacent costs are claimable, and if you structure the project right, a Malaysian SME can recover RM5,000 to RM15,000 on a mid-size build. Most employers miss this because their software vendor never flags it, and HRD Corp rules require approval before the work happens.
This guide walks through what's actually claimable, what isn't, and how to plan a software project around HRDF from day one.
The quick answer: software construction is not training
The Human Resources Development Fund (HRDF), administered by HRD Corp since 2021, exists to subsidise employee training and upskilling. The levy is 1 percent of monthly wages for employers with 10 or more Malaysian employees in registrable industries (0.5 percent optional for 5 to 9 employees).
That fund pays for:
- Employees attending approved training courses
- Employers running internal training programmes with accredited trainers
- Specific upskilling initiatives listed under HRD Corp programmes
It does not pay for:
- Writing a custom CRM, POS, or business application
- Building a SaaS product
- Hiring developers to create a new feature
- Any software that isn't directly about training staff
That sentence trips up most first-time founders. "Isn't software development a form of development?" Legally, no. The fund is tied to the Pembangunan Sumber Manusia Berhad Act 2001, which defines development narrowly as human resource training. Code isn't training.
Three real ways to claim HRDF on a software project
Here's where the useful news starts. If you plan the project well, three legitimate claim routes open up.
1. Computer-Based Training (CBT) Scheme, for training software only
This is the one route where HRD Corp actually funds software development, and Malaysian employers consistently misunderstand its scope.
Under the Computer-Based Training (CBT) scheme, employers can develop or purchase computer-based training software with up to 100 percent approval, subject to available funds. The catch: it has to be training software. Think:
- An internal Learning Management System (LMS)
- An onboarding platform for new hires
- A compliance training portal (PDPA, safety, SOPs)
- A skills assessment or certification tool
- Product training software for dealer networks
It does not cover a customer-facing app, a CRM, an inventory system, or a marketing website, even if you frame those as "helping staff learn the business." HRD Corp reviews the proposal for genuine training intent.
The process:
- Submit a proposal to HRD Corp at least one month before development starts
- Include the scope, vendor quote, learning outcomes, and trainee list
- Get written approval before signing the build contract
- Claim after development is complete and the software is in use
The one-month lead time is non-negotiable. Starting the build and applying later is the most common reason CBT claims get rejected.
2. Post-deployment staff training on the new software
Once your custom software is built and deployed, training staff on it is fully claimable. This is the route most software projects should plan for by default.
| Training type | Typical claim range (RM) | Notes |
|---|---|---|
| Vendor-led product training (1-2 days) | 3,000 – 8,000 | Must be run by an HRD Corp-registered trainer |
| Internal train-the-trainer programme | 2,000 – 5,000 | Trainer must be accredited via TTT certification |
| Multi-location rollout training | 8,000 – 20,000 | Travel and allowance components also claimable |
| E-learning module (self-paced) | 1,500 – 4,000 | Registered as a claimable programme beforehand |
Two rules matter:
- Register the programme before training happens. You can't train first, submit later.
- Use an approved trainer. The vendor building your software is not automatically approved. Ask them to either get TTT-certified or partner with an accredited trainer.
In our experience working with Malaysian SMEs, the software vendor-led training fee (RM3,000 to RM10,000) is the easiest HRDF claim on any custom software project. It's also the most routinely forgotten.
3. Upskilling your in-house developers
If you have an internal dev team, sending them on technical courses is one of the most underused HRDF routes. Search the HRD Corp Claimable Courses portal and you'll find hundreds of technical courses with the "HRD Corp Claimable" tag:
- Laravel, Node.js, React, Vue, Flutter, React Native framework courses
- Cloud certifications: AWS, Google Cloud, Azure
- Cybersecurity (CompTIA, CISSP, PDPA-specific)
- DevOps, CI/CD, Kubernetes (course code M1052 from Tertiary Courses runs RM5,000 per participant)
- AI and data engineering
Typical cost per developer per course: RM3,000 to RM8,000. If you have 4 developers and run 2 upskilling courses a year, that's RM24,000 to RM64,000 in annual claims. Most Malaysian software teams we work with don't do this. The levy sits in HRD Corp's account until the end of the year.
A worked example: RM80,000 custom build
Let's make this concrete. Say you're a Malaysian SME (25 employees, around RM120,000 in annual payroll for the team the software will support) commissioning an RM80,000 custom CRM. Here's the claim footprint if you plan properly:
| Component | Amount (RM) | HRDF claimable? | How to claim |
|---|---|---|---|
| Custom CRM build (scoping, design, dev) | 80,000 | No | — |
| 2-day vendor training for 15 staff | 6,000 | Yes | Register programme 1 month before training |
| Train-the-trainer cert for 2 internal champions | 4,000 | Yes | Registered HRD Corp TTT programme |
| 3 developers attend Laravel advanced course | 15,000 | Yes | HRD Corp Claimable Course (M-series code) |
| Annual PDPA compliance training for all staff | 3,500 | Yes | Registered programme, accredited trainer |
| Total claim potential | 28,500 |
On an RM80,000 project, a well-planned employer recovers roughly RM25,000 to RM30,000 back through training claims. That's not the software cost itself. It's the adjacent training cost that was going to happen anyway. Structuring it through HRDF converts an expense you were already paying into a reclaimable line item.
Our take: if you're spending more than RM50,000 on custom software and you pay the HRDF levy, you're probably leaving RM5,000 to RM15,000 on the table by not planning the training claims into the contract.
What about buying off-the-shelf software (SBL-Khas)?
The SBL-Khas scheme covers training provided by external parties, including training bundled into commercial software purchases. If you buy a software package that includes a bundled training component, the training portion is usually claimable. The licence itself is not.
Example: you buy a Microsoft Dynamics implementation for RM200,000, of which RM30,000 is training delivered by a certified Microsoft partner in Malaysia. The RM30,000 training portion is often claimable, the RM170,000 licence and implementation is not. Always ask the vendor to itemise training separately on the invoice.
Common mistakes Malaysian employers make
From conversations with Malaysian founders who've tried to claim after the fact, five patterns come up:
- Applying too late. Submitting a CBT proposal after the software is already being built. HRD Corp rules require approval at least one month before work starts.
- Mislabelling business software as training software. A CRM with a "help section" is still a CRM. CBT proposals get rejected if the primary purpose isn't training delivery.
- Using an unregistered trainer. Your software vendor's project manager isn't an accredited trainer unless they've done TTT certification. Partner with an accredited provider instead.
- Forgetting the levy balance rule. You can only claim up to the levy balance in your account. If your annual levy is RM12,000 and you've already claimed RM10,000, you have RM2,000 left until the next year.
- Not budgeting training into the contract. Most software vendors in Malaysia quote you a number for "the build" and treat training as an optional extra. Ask for training to be scoped in from the start so you can register it with HRD Corp early.
How this fits with the rest of your software budget
HRDF claims don't change the build cost. They just recover some of the training and upskilling cost that sits around the build. Combined with LHDN's capital allowance treatment on custom software (covered in our LHDN e-invoice integration cost guide) and the 8 percent MySST line on ongoing maintenance (covered in our software maintenance cost Malaysia post), the real net cost of a Malaysian software project can land 15 to 25 percent lower than the headline quote.
That's only true if you plan these routes in from the start. Bolt them on afterwards and you'll recover maybe half of what was available.
What Malaysian business owners should actually do
- Check your HRDF levy balance. Log into the HRD Corp portal and see how much is sitting unused. Most SMEs are shocked.
- Ask your software vendor to itemise training in the quote. Not "included in project." A separate line with trainer credentials so you can register it.
- For training software (LMS, onboarding platforms), apply for CBT before the build starts. One month lead time is the legal requirement, not a suggestion.
- Budget one technical course per developer per year. This alone usually claims back more than most SMEs realise is possible.
- Keep the documents. HRD Corp audits. Retain invoices, attendance records, trainer certifications, and course materials for at least 7 years.
Want a software quote that has the HRDF-claimable training components scoped in from the start? WhatsApp us and tell us what you're planning. We'll structure the build so the training line items are ready for HRD Corp registration, not bolted on after deployment.
This article is for informational purposes and does not constitute legal, tax, or grant advisory. HRD Corp rules, scheme availability, and claim limits change periodically. Verify current eligibility and submit proposals directly through the HRD Corp portal before acting.
