The Lowdown on Temporary Employment Credit (TEC)

Temporary Employment Credit (TEC)Launched back in 2014 as part of a budget initiative, Temporary Employment Credit (TEC) was designed to help businesses combat rising operational costs. This credit worked by enhancing the MediSave contribution rate set by employers within a company. TEC spun into action in 2015, intended solely for employers based in Singapore. However, it ran its course and came to a halt in 2017.

In sync with the 2015 budget, TEC’s influence was extended to cover escalating costs in other aspects of a business, which include:

  • A rise in the CPF salary ceiling;
  • A 1% boost in the CPF contribution rate by employers for older workers.

Eligible employers would thus receive a 0.5% credit of wages paid to Singaporean and Singapore Permanent Resident employees earning up to $5,000 per month. But for those with employees earning more than $5,000, the TEC they receive would be aligned with the CPF contributions payable at the CPF monthly wage limit of $5,000. This calculation, it’s worth noting, is based on the employees’ wages paid in 2015.

You should also be aware that the income generated under this employment credit might be taxable as TEC payouts. For more clarity on what constitutes taxable and non-taxable income, you can refer to the IRAS guide.

 

How is the TEC Payout Disbursed?

Once all necessary procedures are concluded, eligible recipients will receive their TEC payment in the bank account linked to their CPF Board registration. In special cases, where your bank account isn’t connected to the CPF Board registration, you’ll receive a check for your TEC payouts. Just remember, you’re expected to cash this check within six months from the date of issue. If you don’t, you’ll forfeit your payout.