Singapore Reminds Businesses Of Wage Credit Scheme Deadline
by Mary Swire, Lowtax.net, Hong Kong
20 December, 2013
Singapore's Ministry of Finance has issued a reminder to employers to make Central Provident Fund (CPF) social security contributions for employees by January 14, 2014 to secure the first tranche of Wage Credit Scheme (WCS) payouts.
The three-year WCS was announced in Singapore's 2013 Budget on February 25 and aims to help businesses by co-funding the wage increases of their employees as they restructure in a tight labor market.
Under the WCS, the Government co-funds 40 percent of wage increases given to Singaporean employees earning a gross monthly wage of SGD4,000 (USD3,175) and below. This is meant to allow businesses to free up resources to make investments in productivity, and to share the consequent savings with their employees.
Employers qualify for the WCS if they give wage increases to employees who are on their payroll for at least three months in the year, and who received CPF contributions for at least three months in the preceding year. The three months in the preceding year could be with a different employer, but all the current three months must be with a single employer.
The WCS does not need to be applied for. Eligible employers will automatically receive the WCS payouts based on the CPF contributions they have paid for their employees' 2012 and 2013 wages. For each year that an employer qualifies for the WCS, he will receive it in the second quarter of the following year, via direct credit to his bank account or by check.
The first payout will be at the end of March 2014, for wage increases given to employees in 2013 over 2012. However, only CPF contributions made by January 14, 2014 will be considered in the calculation of wage increases which qualify for WCS.
In Singapore, employers are required to pay CPF contributions within 14 days from the end of each month for which CPF contributions are due.
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