Singapore employers must make the entire Central Provident Fund (CPF) contributions for eligible employees prior to the deadline of Jan. 14, 2019 so that they can get the payouts under the Wage Credit Scheme, according to a circular issued by the Singapore Ministry of Finance.
The Wage Credit Scheme was introduced in order to support wage increases from 2013 to 2015. It has furthermore been extended until 2020 since it supports those employers who are eager to share their productivity gains with their employees. The Singaporean government funded 20 percent of the wage increases last year and going forward, the percentage will be rolled down to 15 percent in 2019 and 10 percent in 2020.
In order to qualify for the sixth part of the WCS payouts, companies in Singapore must fulfill certain conditions. The major two include:
- Giving Singaporean employees an increase in their gross monthly wage of at least $50 in 2018 and/or must have continued the gross monthly wage increase given to their employees in 2017.
- Employers should have paid the compulsory CPF contributions for the employees on their wages of 2018 to the CPF board by Jan. 14, 2019.
Many employers might be wondering how to avail of the WCS payouts. The Inland Revenue Authority of Singapore (IRAS) will send letters to those employers who are eligible by March 2019. These letters will inform the employers about the exact amount of WCS payouts that they will receive and the payouts will be directly credited to the company’s GIRO bank account that is used for Income Tax and GST. The ministry has also given the companies an option to register their bank account with PayNow Corporate by Jan. 14.