The Wage Credit Scheme (WCS) is part of the 3-Year Transition Support Package introduced in Budget 2013. Under the WCS, the Government will co-fund 40% of wage increases given to Singaporean employees earning a gross monthly wage of up to $4,000. WCS covers wage increases that are given in 2013 to 2015.
You may wish to refer to the WCS Slides with voiceover for more information.
Illustration of WCS benefits
- If an employer increases the gross monthly wage of his employee by $200 in 2013, the Government will co-fund 40% of the $200 wage increase and for the subsequent two years if the increase is sustained.
- If further $200 increases are given in 2014 and 2015, the Government will co-fund 40% of the further wage increases, i.e. total wage increase of $400 and $600 in 2014 and 2015 respectively.
- At the end of three years, the employer has paid a total of $14,400 more in wages to the employee and the Government has co-funded $5,760.
Gross monthly wage is the total wages paid by the employer to the employee in the calendar year, divided by the number of months in which CPF contributions were made. Total wages paid to an employee is derived from the CPF contributions that the employer makes for the employee per month based on the allowance and payments for which contributions to CPF is required. Total wages include basic salary and additional wages such as overtime pay and bonuses, and exclude employer's CPF contributions.
Please see four Worked Scenarios (330 KB) on the computation of WCS.
How to qualify for co-funding in calendar year 2013
|Employees must be
- Singapore Citizen;
- Earns a gross monthly wage less than $4,000;
- Was employed for at least three months in 2012;
- Is on employer's payroll for at least 3 months in 2013 (i.e. employer must have paid employee CPF contributions for at least three months in 2013).
- Employers need not submit any application to IRAS.
- All employers will automatically be covered under WCS except government-related entities and entities not registered in Singapore.
|Qualifying wage increases
- WCS aims to support productivity gain sharing between employers and employees through meaningful wage increases, especially for lower wage workers.
- Once an employee's gross monthly wage exceeds $4,000, the portion of the wage increase that brings the gross monthly wage above $4,000 will not be eligible for co-funding under WCS.
Payment of WCS payout
Eligible employers will receive a payout automatically annually. The first payout will be in the second quarter of 2014, and the last payout will be in 2016.
The Wage Credit co-funds businesses giving wage increases to their employees and is taxable.
Compute your Wage Credit using the WCS calculator . New!
Frequently Asked Questions (FAQs)
For more details, please refer to the FAQs on WCS.
You may also contact us for assistance or clarification on WCS.
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