By the end of this month (31 March 2020), over 90,000 employers in Singapore will receive over S$600mn in payouts under the Wage Credit Scheme (WCS).
In a press release by the Ministry of Finance (MOF), SMEs will receive the bulk of the payouts, at around 70% of the total sum disbursed.
Through the payouts this month, the Government will co-fund 15% of qualifying wage increases given in 2019, 2018, and 2017 to more than 700,000 Singaporean employees earning a gross monthly wage of up to S$4,000.
Employers do not need to apply to receive the WCS payouts. Eligible employers will receive letters from the Inland Revenue Authority of Singapore (IRAS) by 31 March 2020 informing them of their WCS March payout amount.
In line with Singapore’s Smart Nation efforts, IRAS will fully adopt digital payment modes for WCS payouts, and will no longer issue cheques. Hence, to receive the payouts, employers must apply for GIRO or PayNow Corporate.
Employers who do not use GIRO of PayNow Corporate will have their WCS payouts retained until they have successfully registered for GIRO for Income Tax/GST or PayNow Corporate.
According to the MOF, the last WCS payout will be made in March 2021. Unclaimed payouts will be retained in the employers’ WCS account until the scheme closure date (to be announced in 2021). Employers will no longer be eligible to claim the payouts after that.
With regards to the WCS enhancement announced in Budget 2020, eligible employers will receive a supplementary payout in the second half of 2020.
To recap, the enhancements include:
- A rise in the gross monthly wage ceiling from S$4,000 to S$5,000 for 2019 and 2020 qualifying wage increases.
- An increase in the Government co-funding levels for 2019 and 2020 qualifying wage increases from the current 15% and 10%, to 20% and 15% respectively.
Appeals regarding WCS payouts must be submitted to IRAS by 30 June 2020, and will be considered on a case-by-case basis.
FAQ: Am I eligible for the WCS payout?
Your company can qualify for the WCS payouts if, in any calendar year from 2013 to 2020, you give an increase of at least S$50 in monthly wage(up to the Gross Monthly Wage ceiling of S$4,000 before 2019 and S$5,000 after 2019) to Singaporean employees who:
- Are on their payroll for at least three months in the qualifying year, and
- Received CPF contributions for at least three months in the preceding year.
Employees on the payroll of a different employer in the preceding year can still qualify under the new employer for WCS, if they are on the payroll of the new employer for at least three months in the qualifying year.
Singapore Citizen employees who received CPF contributions, including full-time, part-time, and casual employees, are covered by the WCS.
However, if your company is in the following government-related entities or entities not registered in Singapore, you are not eligible for the WCS:
- Local government agencies, including organs of state, ministries and departments, statutory boards
- Government and government-aided schools
- People’s association services and grassroots units
- High commissions, embassies, trade offices, consulates
- Unregistered local/foreign entities
- Foreign military units
- Representative offices of foreign companies, foreign government agencies, foreign trade associations, foreign chambers, foreign non-profit organisations, and foreign law practices
- Bank representative offices/ insurance representative offices/ other financial representative offices (registered with mas)
- News bureaus (which are representative offices)
- International organisations
Wage increases are computed on an annual basis, based on the difference between the gross monthly wage of an employee in the qualifying year and the gross monthly wage of the employee in the preceding year. For each qualifying year, WCS payouts will be paid to the eligible employer for all the months in the year in which CPF contributions are made by him for the covered employee.
For the 2020 payout, new wage increases given to employees in 2019 over 2018, as well as sustained wage increases previously given to covered employees in 2018 over 2017, and in 2017 over 2016, will qualify for WCS payouts. All wage increases and sustained wage increases must be at least S$50 to qualify for WCS payouts.
FAQ: I'm not sure if I have GIRO or PayNow Corporate. How can I check?
To check if you have a GIRO account for Income Tax/GST, log in to myTax Portal and select “Account”. If a payment plan is reflected, there is an existing GIRO arrangement.
To check if you have a PayNow Corporate account, please approach your bank.
FAQ: How do I register for PayNow Corporate?
You can set up your PayNow Corporate account instantly, by linking your UEN / NRIC / FIN to your bank account via internet banking. For assistance, please approach your bank.
FAQ: How do I register for GIRO with IRAS?
You can register your business, including clubs and associations, for GIRO by completing an application form for IRAS’ and the relevant bank’s processing. Upon successful processing, a notification letter will be mailed to the business’ registered address.
Alternatively, if you hire and contribute CPF to employees using a CPF Submission Number which is NRIC/FIN, you can set up for GIRO instantly through online application.
Upon successful GIRO registration, GIRO will be the default payment mode for IRAS’ related transactions such as tax payments.
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