Training of Employees

This refers to courses conducted by employees of the business where expenditure is incurred in relation to the provision of the following:

• Workforce Skills Qualification (WSQ) training courses accredited and conducted by a WSQ in-house training provider
• Courses approved by the Institute of Technical Education (ITE) under the ITE Approved Training Centre scheme
• On-the-job training by an On-the-job Training Centre certified by ITE

Spontaneous consultation, day-to-day problem solving or meetings and coaching/ mentoring sessions between supervisors and subordinates do not qualify for PIC.

The qualifying expenditure for PIC benefits is the expenditure amount minus the grant or subsidy by the Government or any statutory boards.

There is no need to deduct the Absentee Payroll funding to arrive at the qualifying expenditure for PIC. This is because the Absentee Payroll funding is given separately to help employers defray the manpower costs incurred on employees attending training.

Accreditation by WSQ/ Certification by ITE

In-house training must, in general, be:

• Accredited* and conducted by a WSQ in-house training provider; or
• Approved/ certified by ITE.

For YAs 2012 to 2018, qualifying training expenditure incurred on in-house training not accredited* and conducted by a WSQ in-house training provider or approved/ certified by ITE also qualify for PIC, subject to a cap of $10,000 for each YA. The claim must still be within the overall expenditure cap on training.

These include:

• Training staff to operate specialised equipment(s) with the help of instruction manuals
• Training staff on business operating processes and functions in a group setting, with prepared materials and handouts
• Training staff on key skill sets such as regular sessions on customer service

For YA 2011, businesses have to ensure that their in-house training is accredited and conducted by a WSQ in-house training provider or ITE-approved/ certified training course before claiming PIC.

Allowable Training Costs for In-House Training

• Salary and other remuneration of in-house trainers for the delivery of the training courses (i.e. based on the hours spent delivering the courses), excluding directors' fees
• Rental of external training premises
• Meal and refreshments provided during the courses
• Training materials and stationery

Costs Not Allowed for In-House Training

• Salary and other remuneration paid to in-house trainers for their other duties, including time spent in the preparation of course contents and training material
• Salary and other remuneration paid to employees who provide administrative support to the training department
• Absentee payroll (i.e. salaries and other remuneration of any employee attending the training courses)
• Accommodation, travelling and transportation expenditure

• Imputed overheads like rental and cost of utilities.

External training is where course fees are paid to an external training service provider. For outsourced training, there is no specific requirement for the external trainer to be a certified trainer.

Allowable Training Costs for External Training

• Training fees paid to the external training provider qualify for PIC benefits, including registration or enrollment fees, examination fees, tuition fees and aptitude test fees. It does not matter whether the course or seminar is held in Singapore or overseas
• Rental expenses for external training premises, costs of meal and refreshments provided during the courses, training materials and stationery separately incurred
• Expenses such as hotel accommodation, travelling (e.g. air fare) and transportation expenditure incurred by your business for the external trainer

Costs Not Allowed for External Training

• Expenses such as accommodation, travelling and transportation expenditure incurred by the employees attending the course. If the service provider includes accommodation and airfare when charging the overseas course fees but has not provided a breakdown for such charges, you may use the market rate for accommodation and airfare to compute the disallowable amount.

You are required to keep proper records and documents of your training expenditure to support your PIC claims. You only need to submit these documents if asked by IRAS to do so.

Documents that you should keep include:

• For In-House Training Not Certified by WDA/ SkillsFuture Singapore Agency or ITE
  • Name of course/ training
  • Exact date(s), duration and venue of course/ training
  • Full name, designation and qualification of trainer(s)
  • Full name, identification number (e.g. NRIC), designation and employment period of trainee(s)
  • Course objectives, course outline and a copy of the course handout or training manual
  • Basis and computation of how the training cost was arrived at
  • Itemised breakdown of qualifying expenditure with supporting documents (e.g. timesheet maintained by the trainer(s))
• For In-House Training Certified by WDA/ SkillsFuture Singapore Agency or ITE
  • Name of course/ training
  • Exact date(s), duration and venue of course/ training
  • Full name, designation and qualification of trainer(s)
  • Full name, identification number (e.g. NRIC), designation and employment period of trainee(s)
  • Course objectives, course outline and a copy of the course handout or training manual
  • Basis and computation of how the training cost was arrived at
  • Itemised breakdown of qualifying expenditure with supporting documents (e.g. timesheet maintained by the trainer(s))
  • A copy of the certification letter issued by the relevant agencies
• For External Training
  • Name of course/ training
  • Exact date(s), duration and venue of course/ training
  • Full name, designation and qualification of trainer(s)
  • Full name, identification number (e.g. NRIC), designation and employment period of trainee(s)
  • Course objectives, course outline and a copy of the course handout or training manual
  • A copy of the invoice(s) issued by the external training provider
  • Evidence of payment (e.g. bank statement)

The qualifying training costs include training costs incurred for training of all employees i.e. both local and foreign employees.

For companies, qualifying expenditure incurred on trainings attended by a director who is also a shareholder qualify for PIC enhanced deductions/ cash payout if this person is an employee of the company. However, a director who is also a shareholder is not considered as a local employee for the purpose of meeting the 3-local-employee condition to qualify for PIC cash payout.

No. There is no requirement that the employees have to pass the examination after the course.

Yes, from YAs 2014 to 2018, examination fees with no training involved will qualify for PIC as long as there is an element of self-study on the employees' part and the fees are incurred for the claimant's trade or business.

However, pure examination fees alone do not qualify for PIC. For example, the test fees paid for a Skills Evaluation Test to assess the skill competency of workers who do not possess any formal skills qualifications do not qualify for PIC as no training is involved.

From YAs 2014 to 2018, individuals deployed under a centralised hiring arrangement are regarded as employees of the business where they are deployed, subject to the following qualifying conditions:

1. The claimant (Business B) is able to produce supporting documents on the recharging of employment costs by a related entity (Business A), in respect of employees working solely in the claimant entity;
2. The corporate structure and centralised hiring practices are adopted for bona fide commercial reasons; and
3. The related entity (Business A) does not claim deductions on the training expenses recharged to the claimant entity (Business B).

If the above qualifying conditions are met, Mr X can be treated as an employee of Business B and the qualifying training costs incurred by Business B on Mr X qualify for PIC.

* Some examples of centralised hiring arrangements include deployments where the Human Resources function of a group of companies is centralised in a single entity, with the staff costs (including training expenditure) allocated to the respective entities, or secondments, where employees are seconded to work for a related company. Once seconded, the staff costs are fully recharged to the related company.

Yes, there is no restriction on where the training is conducted.

No, staff accommodation and travelling do not qualify for enhanced deduction. If there is no breakdown of the fees incurred, you may use the market rate for accommodation and airfare to compute the disallowable amount.

There is no requirement for external courses or training providers to be approved for the PIC scheme. However, to qualify for PIC, the training expenses must meet the general deduction rules in that they must be wholly and exclusively incurred to produce the company's income.