Wage Credit Scheme (WCS)

Who qualifies for WCS

All employers giving wage increases in 2013 – 2020 to Singapore Citizen employees who:

1. Received CPF contributions from a single employer for at least 3 calendar months* in the preceding year^₂;
2. Have been on the employer's payroll for at least 3 calendar months* in the qualifying year^₃ (i.e. employer must have paid employee CPF contributions for at least three calendar months* in qualifying year); and
3. Have at least $50 gross monthly wage increase (up to the Gross Monthly Wage ceiling^₄)
4. Must not also be the business owner of the same entity (i.e. sole proprietor of the sole proprietorship, or a partner of the partnership, or both a shareholder and director of a company)

*The three months minimum employment duration need not be continuous.

²Preceding year refers to the year before the Qualifying Year in the relevant year of payout.

³Qualifying year refers to the year for which Wage Credit is computed, based on the wage increases given in that year. There are eight qualifying years, i.e. 2013, 2014, 2015, 2016, 2017, 2018, 2019 and 2020.

⁴As announced in Budget 2020, the qualifying gross wage ceiling was raised from $4,000 to $5,000 for 2019 and 2020.

Local government agencies, international organisations and businesses not registered in Singapore do not qualify for WCS. 

See the full employer exclusion list.

Additional Eligibility Conditions

An employer is not eligible for a payout under any of the circumstances below:

   a. The employer is an entity that has no substantial trade or business;

   b. The employer had given, in IRAS' opinion, false or misleading information to IRAS in order to obtain a payout or a higher amount of payout;

   c. The employer (either singly or with another person) had used, in IRAS' opinion, one or more artificial, contrived or fraudulent steps in order to obtain a payout or a higher amount of payout;

   d. The employer was convicted in the qualifying or preceding year for making CPF contributions to Singaporeans who were not actively employed by the firm

An employer is not eligible for a payout for a wage increase given to a particular employee who:

   a. Did not carry out any substantive work for the employer;

   b. Effectively controls the employer (i.e. controls decision making power and management of the business or company)

   c. If the total wages paid by an employer for a period is not commensurate with the volume or nature of activity carried out by the employer in that period, then the employer is only eligible for an amount of payout that, in IRAS' opinion, corresponds to the increase in the total wages that is commensurate with such volume or nature of activity.

   d. If the total wages paid by an employer to a particular employee for a period is not commensurate with the volume or nature of work carried out by the employee in that period for the employer, then the employer is only eligible, in respect of that employee, for an amount of payout that, in IRAS' opinion, corresponds to the increase in the total wages paid to that employee for that period that is commensurate with such volume or nature of work.

   e. If an employer fails to give to IRAS, by the time specified by IRAS, any information requested by IRAS for the purpose of determining the employer's eligibility for a payout or the amount of payout the employer is eligible for, with respect to one or more employees, then the employer will not be given the payout for these employees.

Wage Credits on each qualifying employee will be computed as follows:

An illustration can be found below.

Assume a new employee was hired since 2012 until Sep 2020; and was given gross monthly wage increases of $200 in 2013, $300 in 2014, $100 in 2015, $200 in 2016 and $500 in 2017, $100 in 2018, $200 in 2019 and $100 in 2020.

NEW!

Example

Application is not required. IRAS will notify eligible employers by post of the Wage Credit payable to them by end Mar of the payout year.

When is the payout

Payouts will be given to employers by 31 Mar of the payout year.

Qualifying employers benefitting from Budget 2020 enhancements for the 2019 wage increases will receive a supplementary payout by end Jun 2020.

How do employers receive the payout

In line with Singapore’s Smart Nation efforts, all WCS payouts will be disbursed through GIRO or PayNow Corporate. No cheques will be issued for the payouts.

Payouts will automatically be credited to employers' GIRO bank account for Income Tax/GST. For those without GIRO accounts, the payout will be credited to their bank account that is registered with PayNow Corporate⁵. Employers who are not already on these direct crediting modes have to sign up for these modes to receive their payouts.

⁵Organisations can sign up for PayNow Corporate by linking their organisation’s UEN (without suffix) [e.g. ROC (2019XXXXXA), ROB (531XXXXXA), UEN (T19LLXXXXA)] to their bank account via internet banking. The nine banks participating in PayNow Corporate are United Overseas Bank, DBS Bank/POSB, OCBC Bank, Citibank, HSBC, Maybank, Standard Chartered Bank, Bank of China and Industrial and Commercial Bank of China Limited. For assistance, please approach these banks.

Is the Wage Credit payout taxable?

The Wage Credit payout is a government grant that co-funds wage increases given to your employees. Hence it is considered revenue that is taxable in the hands of the employers. The payouts will be taxed in the relevant Year of Assessment corresponding to the year you received the payouts. 

Individuals (including sole-proprietors) and partnerships are not required to declare the Wage Credit payout received in their income tax returns (Form B/B1 or Form P) as this will be automatically included by IRAS in their tax assessments for the relevant YA.

Companies are however, required to declare the Wage Credit payout received in their income tax return (Form C/Form C-S) for the relevant YA.

What should I do if I encounter difficulties in registering for GIRO or PayNow Corporate?

Please email wcs@iras.gov.sg or call our helpline at 1800-3524727 or 1800-3524728 (8 a.m. - 5 p.m. from Mon to Fri) for assistance.

Employers may request for a breakdown of the total Wage Credit by employee in the year of payout.

How to submit a request

Employers may submit an online request via myTax Portal.

When to submit

Employers can submit their requests from the last week of Mar till 31 Oct of the payout year.

In view of the supplementary payout, employers can consider to submit their requests only after receiving the supplementary payout in Jun 2020. Each request with qualifying employee records exceeding 100 will be subjected to a payment.

How much

Processing fees apply for qualifying employee records exceeding 100.

   a. $100 for records more than 100 but not exceeding 200

   b. $150 for records exceeding 200

How to pay

Payment can be made by Internet Banking Fund Transfer. IRAS’ bank account details are as follows:

Payee:                  Commissioner of Inland Revenue

Account Type:     DBS Current Account 

Account No.:        0010468669

DBS Swift Code:  DBSSSGSG  

You must indicate your business name and purpose (e.g. ABC Pte. Ltd. WCS Breakdown Request) under the “Beneficiary Reference / Purpose of Payment / Remittance Information / Payment Details” field to facilitate the processing of your payment.  

We will process your request after your payment is successfully receipted. We will notify you when the information is ready.

How will employers receive the records

Employee records not exceeding 100 will be mailed to the business's registered address by ordinary mail and employee records exceeding 100 will be provided via myTax Mail at myTax Portal within ten working days from the date of receipt of payment.

What do the records contain?

The records will provide you with the breakdown of Wage Credit for your employees. If you have new eligible employees, only their names will be provided as disclosure of the new employees' individual Wage Credits may enable the wages from their previous employment to be derived.

For IRAS to provide you with their individual Wage Credits, each new employee is required to sign a Consent Form (PDF, 186KB). To declare that their consent had been obtained, please complete and submit a Declaration Form (PDF, 214KB) to wcs@iras.gov.sg or the following address within a month from the date of request:

Wage Credit Scheme Office
Inland Revenue Authority of Singapore
55 Newton Road
Singapore 307987 

In any payout year, employers can only appeal on Wage Credit payout for that year.

Appeals under the following situations may be considered based on the merits of the case:

1. Merger of companies;
2. Conversion of business entity, or change in UEN;
3. Overseas Singaporean employees for whom CPF contributions were not made but whose salaries were nonetheless paid.

How to submit an appeal

Employers who decide that they have eligible ground for appeal should complete the Appeal Form (PDF, 408KB) and submit it to wcs@iras.gov.sg with supporting documents.

Alternatively, you may send the completed appeal form to IRAS at the following address:
Wage Credit Scheme Office
Inland Revenue Authority of Singapore
55 Newton Road
Singapore 307987

When to submit

Employers have until 30 Jun of the payout year to submit their appeal.

Background of the Scheme

The Wage Credit Scheme (WCS) is part of the 3-Year Transition Support Package introduced in Budget 2013.

As announced in Budget 2015, the Government extended the WCS for two more years, i.e. 2016 and 2017, to give firms more time to adjust to rising wages in the tight labour market.

In Budget 2018, it was announced that the WCS would be extended for three more years, i.e. 2018, 2019 and 2020, to support businesses embarking on transformation efforts and encourage sharing of productivity gains with workers.

In Budget 2020, it was announced that the government co-funding ratios for wage increases and the qualifying gross wage ceiling will be raised for 2019 and 2020.

Through WCS, businesses affected by economic restructuring will receive Government support to manage rising labour costs. The payouts will allow businesses to free up resources to make investments in productivity and to share the productivity gains with their employees.

Contact IRAS

   a. Email us: wcs@iras.gov.sg

   b. Call us: 1800-3524727 or 1800-3524728 (8 a.m. - 5 p.m. from Mon to Fri)