This guide provides an overview of the Wage Credit Scheme (WCS), which was initially introduced in Budget 2013. The WCS is intended to help Singapore companies manage the rising labor costs while still allowing employers to retain, develop and train workers.
The Wage Credit Scheme (WCS) is part of the 3-Year Transition Support Package introduced in Budget 2013. Under the WCS, the Government will co-fund 40% of wage increases given to Singaporean employees earning a gross monthly wage of up to $4,000. Wage increases that are given in 2013 to 2015 will be eligible for WCS.
Illustration of WCS benefits
- If an employer increases the gross monthly wage of his employee by $200 in 2013, the Government will co-fund 40% of the $200 wage increase and for the subsequent two years if the increase is sustained.
- If further $200 increases are given in 2014 and 2015, the Government will co-fund 40% of the further wage increases, i.e. total wage increase of $400 and $600 in 2014 and 2015 respectively.
- At the end of three years, the employer has paid a total of $14,400 more in wages to the employee and the Government has co-funded $5,760.
Gross Monthly Wage
Gross monthly wage is the total wages paid by the employer to the employee in the calendar year, divided by the number of months in which CPF contributions were made. Total wages paid to an employee is computed from the CPF contributions that the employer makes for the employee in the year. Total wages include basic salary and additional wages such as overtime pay and bonuses, and exclude employer’s CPF contributions.
How to qualify for co-funding in calendar year 2013
|Employees must be||
|Qualifying wage increases||
Payment of WCS payout
Eligible employers will receive a payout automatically annually. The first payout will be in the second quarter of 2014, and the last payout will be in 2016.
The Wage Credit co-funds businesses giving wage increases to their employees and is taxable.