Qualifying Conditions
Who qualifies for WCS
All employers giving wage increases to Singapore Citizen employees who:
- Received CPF contributions from a single employer for at least 3 calendar months* in the preceding year2;
- Have been on the employer's payroll for at least 3 calendar months* in the qualifying year3 (i.e. employer must have paid employee CPF contributions for at least three calendar months* in qualifying year); and
- Have at least $50 gross monthly wage increase (up to the Gross Monthly Wage ceiling4)
- 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 nine qualifying years, i.e. 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020 and 2021. Wage increases relating to Qualifying Years 2013-2015 are no longer eligible for payouts from 1 Dec 2018.
4In 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.
Computation of Wage Credit
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 2021; 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 and 2021.
NEW!
Gross Monthly Wage = Total wages (basic salary and additional wages such as overtime pay and bonuses) paid by the employer to the employee in a calendar year / Number of months in which CPF contributions were made.
As announced by the Government on 8 April 2021, excess Jobs Support
Scheme (JSS) payouts were credited to some businesses in October 2020 due to
errors in the reopening dates used to determine the JSS payouts. Affected
businesses have been informed directly. Businesses with excess JSS amounts
outstanding might have these offset against future WCS payouts if eligible.
Please write in to reopeningdate@mti.gov.sg
if you wish to make payment arrangements to return the excess JSS payout.
Receiving Wage Credit
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.
How do employers receive the payout
In line with
Singapore’s Smart Nation efforts, all WCS payouts will be disbursed through either 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 will 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 (8 a.m. - 5 p.m. from Mon to Fri) for assistance.
Submitting a Request for Wage Credit Breakdown
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.
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 within a month from the date of request.
Appealing for Wage Credit Adjustment
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:
- Merger of companies;
- Conversion of business entity, or change in UEN;
- 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.
When to submit
Employers have until 30 Jun of the payout year to submit their appeal.
Background and Contact Information
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 would be raised to $5,000 for 2019 and
2020.
In Budget 2021, the Scheme was extended by one year to
2021, with the government co-funding ratio remaining at 15%, and the qualifying
gross wage ceiling of $5,000.
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 (8 a.m. - 5 p.m. from Mon to Fri)