Wage Credit Scheme (WCS) was introduced in year 2013 and has since been extended to 2020. The initiative is to support and encourage employers to appreciate their employees’ contribution through progressive increments of wages. The Government will co-fund the wages increased up to Year 2020.
Employers do not need to apply for the WCS payout, as eligible employers will be notified automatically on the payout amount. To qualify for the WCS, employers must meet the following criteria:
- Given at least $50 wage increment for Singapore citizen employee who earn a gross monthly salary of up to $4,000
- Paid the CPF contribution for at least 3 months base on the increased wages
- Employee must not be the business owner (Sole proprietor, partner, or both a director and shareholder of the company).
Under the second extended scheme, i.e. 2018-2020, the Government will co-fund qualifying wage increases at 20% in 2018, 15% in 2019 and 10% in 2020.
Moving toward the nation’s plan to be cheque free in year 2025, WCS payout will be given out via digital methods. The following payout will be given by 31 March 2020, and it will be credited to the company bank account associated with the PayNow Corporate. Employers that have not registered for the PayNow corporate or under GIRO arrangement will have to sign up by 14 January 2020 to receive the payout.
Organisations can register for PayNow Corporate by linking their organisation’s UEN (without suffix) [e.g. ROC (2019XXXXXA), ROB (531XXXXXA), UEN (T19LLXXXXA)] to their bank account via internet banking. There are nine banks participating in PayNow Corporate which are United Overseas Bank, DBS Bank/POSB, OCBC Bank, Citibank, HSBC, Maybank, Standard Chartered Bank, Bank of China and Industrial and Commercial Bank of China Limited.
Is Wage Credit Scheme Taxable?
The scheme is a government grant that co-funds wage increases and therefore it is revenue in nature (Other Income), which is taxable. Companies are required to declare the amount of payout received within the basis period in the income tax Form C/C-S filing
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