The PIC scheme has expired after the Year of Assessment (YA) 2018. Businesses are not allowed to claim PIC benefits on expenditure incurred after the basis period of YA 2018.

Training Expenditure that Qualifies for PIC

Businesses may claim PIC benefits on costs incurred to provide training to employees for purposes of the trade and business. Training refers to both in-house training and external training.

In-House Training

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.

For information

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.

* 'Accredited', in relation to a course, means accredited: (a) by the Singapore Workforce Development Agency (WDA) before 3 Oct 2016; or (b) by the SkillsFuture Singapore Agency on or after 3 Oct 2016.

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.

Example

You may also refer to our Worked Examples (PDF, 194KB) for a detailed illustration of how a business can claim PIC benefits in each of the scenarios below:

  • Scenario A: Claim for Enhanced Deduction
  • Scenario B: Elect for Cash Payout
  • Scenario C: Claim for Enhanced Deduction and Elect for Cash Payout

External Training

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.

Example

You may also refer to our Worked Examples (PDF, 182KB) for a detailed illustration of how a business can claim PIC benefits in each of the scenarios below:

  • Scenario A: Claim for Enhanced Deduction
  • Scenario B: Elect for Cash Payout
  • Scenario C: Claim for Enhanced Deduction and Elect for Cash Payout

Administrative Requirements

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)

Examples of Qualifying & Non-Qualifying Expenditure

Qualifying Expenditure Non-Qualifying Expenditure
External course fees for employees (regardless of whether they must sit for an examination) Course fees on training attended by business owners i.e. sole proprietor/ partner, except for non-equity partner (who is considered an employee). For example, a sole proprietor who attends a course on motivating employees is not allowed to claim PIC benefits on the course fee. The sole proprietor can claim the course fee as a course fee relief in his personal income tax return.
Costs incurred on internal WSQ courses for employees' skills upgrading Examination fees with no training involved and no element of self-study on the employees' part (e.g. fees paid by employers for pure certification/ evaluation of employee skill level)
Training conducted by your holding company for your employees Consultancy fees and PIC audit fee
External training for employees to use recently purchased software Fees paid for 'personal tuition' for employees and/or director (e.g. engagement of personal tutor to coach employees for attainment of certification)

From YAs 2012 to 2018, qualifying training expenditure incurred on the following prescribed classes of individuals engaged by the business to carry on its trade qualify for PIC:

  • Salespersons registered under the Estate Agent Act
  • Representatives within the meaning of the Financial Advisers Act
  • Representatives within the meaning of the Securities and Futures Act
  • Insurance agents of insurers licensed under the Insurance Act
  • Hirers of taxis from taxi service operators licensed under the Road Traffic Act
Training fees incurred by a sole-proprietor/ partner, except for non-equity salaried partner (who is considered an employee)
From YAs 2014 to 2018, training of individuals deployed under a centralised hiring arrangement  
From YAs 2014 to 2018, examination fees with no training involved but where self-study is required  

FAQs

Enhanced Tax Deductions for Training of Employees

My business incurred qualifying training expenditure of $1.3 million in YA 2016 and $120,000 in YA 2017. I would like to claim PIC benefits i.e. enhanced tax deductions and/or cash payout. Am I free to decide how much PIC benefits I want to claim in YAs 2016 and 2017? For example, can I claim enhanced deduction of $1.1 million in YA 2016 and cash payout of $100,000 in YA 2017? Assume that my business does not qualify for PIC+ benefits.

No, PIC benefits are granted on the full qualifying expenditure incurred in each YA up to the expenditure cap. In this example, you must claim PIC benefits (i.e. enhanced tax deductions and/or cash payout) on $1.2 million (the full combined expenditure cap for YAs 2016 to 2018) in YA 2016. Since the combined expenditure cap has been reached in YA 2016, you are unable to claim PIC benefits on any training expenditure in YA 2017.

Do training costs pertain only to local employees or all employees?

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

I am a director and also a shareholder of the company. Can I claim PIC enhanced deductions/ cash payout on qualifying expenditure incurred on the trainings I attended?

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.

My employees have undergone an examination that required self-study but no training was involved. Can my business claim PIC on the examination fees incurred?

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.

External Training

Do training costs incurred for overseas trainings or seminars qualify for PIC?

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

The overseas course fees charged by the service provider included accommodation and airfare for my staff attending but there is no breakdown for charges provided in the invoice. Can my company claim the full amount of the billing under PIC?

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.

What are the external courses eligible for PIC scheme?

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.