Wage Credit Scheme (WCS)

Under the Wage Credit Scheme (WCS) introduced in Budget 2013 and extended in Budget 2015, the Government co-funded 40% of wage increases from 2013-20151 and 20% of wage increases from 2016-2017 given to Singapore Citizen employees who earned a gross monthly wage of up to $4,000. Only Employers are eligible for the co-funding.

In Budget 2018, it was announced that the WCS will 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. Government co-funding will be maintained at 20% in 2018. Subsequently, the co-funding ratio will be stepped down to 15% in 2019 and 10% in 2020.

All other qualifying conditions will be unchanged. 

 
Refer to the Quick Guide on the WCS Extension (PDF, 292KB) for more information.
 

1 As announced on 11 Sep 2018, requests to review outstanding wage credit payouts from Qualifying Years 2013-2015 will no longer be considered after 30 Nov 2018.

 

Qualifying Conditions

Who qualifies for WCS

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

  1. Are earning a gross monthly wage of $4,000 and below;
  2. Received CPF contributions from a single employer for at least 3 calendar months* in the preceding year2;
  3. 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
  4. Have at least $50 gross monthly wage increase.
  5. 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 (i.e. 2012, 2013, 2014, 2015, 2016, 2017, 2018 and 2019).

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.

Local government agencies, international organisations and businesses that are 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 for 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 do 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 paid for that period that commensurate with such volume or nature of activity.

   d. If the total wages paid by an employer to a particular employee for a period do 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 the 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.

    How much of wage increases qualify for co-funding

    Under the first extended scheme, i.e. 2016-2017, the Government will co-fund 20% of qualifying wage increases up to a gross monthly wage level of $4,000.

    In addition, gross monthly wage increases (at least $50) previously given in 2015 and 2016 by the same employer will continue to be co-funded at 20% if they are sustained in 2016 and 2017.

    Under the second extended scheme, i.e. 2018-2020, the Government will co-fund qualifying wage increases at 20% in 2018, 15% in 2019 and 10% in 2020. 

    In addition, gross monthly wage increases (at least $50) given in 2017, 2018 and 2019 by the same employer will continue to be co-funded at the respective levels of co-funding if they are sustained in 2018, 2019 and 2020.

    Also, gross monthly wage increases must be at least $50 to qualify.

    Computation of Wage Credit

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

    WCS Co-fund Computation

    A sample 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!

      WCS Destination Page Chart

     

     Under WCS (2013 - 2015)  Under First Extended WCS (2016 - 2017)Under Second Extended WCS (2018 - 2020)
     Year 2013 2014 2015 20162017 201820192020
    Qualifying Wage Increase$200$500$600 $300 $800  $600$800$900
     Govt Co-Funding40% x $200 = $80/mth40% x $500 = $200/mth 40% x $600 = $240/mth 20% x $300 = $60/mth 20% x $800 = $160/mth  20% x $600 = $120/mth 15% x $800 = $120/mth 10% x $900 = $90/mth
     Amount of Wage Credit$80 x 12mths = $960$200 x 12mths = $2,400 $240 x 12mths = $2,880 $60 x 12mths = $720 $160 x 12mths = $1,920  $120 x 12mths = $1,440$120 x 12mths = $1,440$90 x 9mths = $810
     To be Paid in March 2014March 2015 March 2016 March 2017 March 2018 March 2019 March 2020 March 2021

     

    See more Worked Illustrations (PDF, 1.02MB) on how Wage Credit is computed.

    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.

    Receiving Wage Credit

    Application is not required. IRAS will notify eligible employers by post of the Wage Credit payable to them by 31 Mar 2014, 2015, 2016, 2017, 2018, 2019, 2020 and 2021.

    When is the payout

    Payouts will be given to employers by 31 Mar 2014, 2015, 2016, 2017, 2018, 2019, 2020 and 2021.

    How do employers receive the payout

    In line with the Government’s Smart Nation vision to harness technology to enhance productivity, from 2020, all WCS payouts will be disbursed through direct crediting by GIRO or PayNow. 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 Corporate4. Employers who are not already on these direct crediting modes have to sign up for these modes by 14 January 2020 to receive their payouts by 31 Mar 2020.

    4 Organisations 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 and hence it is a 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. Payouts may be used to offset any of your outstanding tax.

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

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

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

    Please log in to myTax Mail to provide your business bank account number with a copy of your latest bank statement so that we can credit the amount directly to your bank account after verification. If you still require assistance in receiving your payout, you may submit your request here.

    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 have from the last week of Mar till 31 Oct of the year of payout (2014, 2015, 2016, 2017, 2018, 2019, 2020 and 2021) to submit their request.

    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 follow:

      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 avoid delay in the processing of the payment.  

      We will process your request after your payment is successfully receipted. We will notify you on the collection of the CD-ROM at IRAS when it 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 within seven working days.

      Employee records exceeding 100 will be provided in a CD-ROM. IRAS will contact the employer for payment and collection of CD-ROM at IRAS within ten working days.

      What do the records contain?

      The records will provide you with the breakdown of Wage Credit for existing employees. If you have new hires who qualify, 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, 12KB). To declare that consent had been obtained, please complete and submit a Declaration Form (PDF, 181KB) to wcs@iras.gov.sg

      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:

      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, 376KB) and submit it to IRAS with supporting documents.

      When to submit

      Employers have until 30 Jun of the year of payout (2014, 2015, 2016, 2017, 2018, 2019, 2020 and 2021) to submit their appeal.

      Abuse of WCS

      The Government takes a serious view of any attempt to abuse the WCS and will take firm action against those involved in such cases.

      Learn more about how to report any suspected abuse or fraud to IRAS

      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 will extend 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 will 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.

      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)

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