Understanding the Wage Credit Scheme

The Wage Credit Scheme was introduced as a three-year plan in Singapore’s 2013 budget. The plan’s main goal was to fund 40% of wage increases for employers from 2013 to 2015 for Singaporean workers earning a total monthly wage of $4,000. But, in the 2021 budget, the scheme was extended for another year, aiming to co-fund up to a 15% wage increase for Singaporean employees earning up to a gross income of $5,000.

 

Who Can Apply For It?

Any Singaporean workers who have received contributions to their Central Provident Fund (CPF) from an employer within three months prior to the qualifying year. The employer should have paid the workers within three months of the qualifying year. There should be at least a fifty-dollar increase in the employee’s monthly wage. Furthermore, an eligible worker shouldn’t have ownership in the business where they work, like being a partner, shareholder, or owner. Finally, the business or entity should be registered in Singapore.

Footnote: The qualifying years include 2013 through to 2021. Also, the three-month requirement doesn’t need to be consecutive.

 

A Few More Details

The Singaporean government can withhold the Wage Credit Scheme (WCS) payout under certain circumstances. For instance, if the employer is not qualified for the WCS payout or the employer is involved in criminal activity related to their business.

 

How Do You Apply?

Typically, employers will receive a notification from the Inland Revenue Authority of Singapore (IRAS) notifying them of their eligibility for the Wage Credit Scheme. So, there’s no formal application process involved. Eligible employers can expect their payouts on 31st March of the qualifying year.

The primary purpose of the WCS payout is to lessen the burden of labour costs on businesses, helping them to thrive even under economic challenges.