ACHIEVING QUALITY GROWTHapp.ncss.gov.sg/ictsweb/hr/2a.Wage Credit Scheme-IRAS.pdf · Wage Credit Scheme (WCS) 23 How to use the WCS Calculator Employers can use the WCS Calculator

ACHIEVING

QUALITY

GROWTH

1

2

$5.9 billion of Government Support over 3 years

3-Year

Transition

Support

Package

3

A. Wage Credit Scheme (WCS)

- $3.6 billion

• To assist with rising labour cost

• Encourage sharing of productivity gains with

workers

B. Productivity and Innovation Credit

(PIC) Bonus - $450 million

Incentivise investments in productivity and

innovation

C. Corporate Income Tax (CIT) Rebate

- $1.3 billion

Alleviate rising business costs

QUALITY GROWTH PROGRAMME

Objectives of

WCS

4

• Flow back additional foreign worker

levies collected in a meaningful way to

support productivity and gainsharing.

• Provides support for businesses to

manage rising wage cost in a tight labour

market. This frees up resources for

businesses to invest in productivity.

• Helps employers share productivity

gains with their employees.

QUALITY GROWTH PROGRAMME

Significant

Level of

Support

5

• Co-funds 40% of wage increases for

Singaporean workers over next 3 years

• Applicable up to a gross monthly wage of

$4,000

• To provide sustained support for

employers, wage increases are co-funded

until 2015.

Wage Credit Scheme (WCS)

Definition of

Gross

Monthly

Wage

6

• 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 refers to all allowances and payments

that attract CPF contributions, including basic

salary and additional wages like overtime pay and

bonuses. Total wages excludes employer CPF

contributions.

• Computed from the CPF contributions that the

employer makes for the employee in the year

• The use of gross monthly wage for Wage Credit

computations allows employers flexibility in giving wage

increases suitable for the circumstances of their

businesses. This is in line with the flexible wage model.



7

Sample Calculation of Gross Monthly Wage

Total basic wage

Bonuses

Other allowances and special payments such as but not limited to

commissions and overtime pay

Number of Months Worked

Gross Monthly

Wage

Determination

of Wage

Increase

8

The wage increase in the qualifying year

is calculated by comparing:

the gross monthly wage in qualifying year,

with the gross monthly wage in the

preceding year.



9

Sample Calculation of Gross Monthly Wage Increase

2013 2012

Gross Monthly

Wage

Gross Monthly

Wage

Gross Monthly

Wage Increase

Total Wage Credit = 40 % x Gross Monthly Wage Increase x Number of Months Worked with Employer


10

Year of Wage Credit (‘Qualifying year’)

Gross Monthly Wage Increase Payment Date

2013 Gross monthly wage of 2013 - 2012 End March 2014

2014 Gross monthly wage of 2014 - 2013 + Gross monthly wage of 2013 - 2012

End March 2015

2015 Gross monthly wage of 2015 - 2014 + Gross monthly wage of 2014 - 2013 + Gross monthly wage of 2013 - 2012

End March 2016

Gross Monthly Wage = Total wages paid by the employer to the employee in a calendar year ÷ Number of months in which CPF Contributions were made Gross Monthly Wage Increase = Gross monthly wage in qualifying year – Gross monthly wage in preceding year

Note: Table assumes employer gives his employee ≥$50 wage increase each year from 2013-2015

11

Wage increases are co-funded until 2015, if they are sustained

Illustration 1

*

*

*Assuming employee worked for 12 months with employer

*At least $50 wage increase

12

Additional wage increases are also co-funded until 2015

Illustration 2

13

The portion of wage increase that is sustained will continue to be co-funded.

Illustration 3

14

Illustration 4

Wage increases will be calculated based on the preceding year, including in cases where wages have decreased then.


15

Sample Calculation

Co-funding will apply for all sustained wage increases

Illustration 5

Wage Credit

Scheme

(WCS)

16

• Increase from wage in the preceding year

must be at least $50 to qualify for wage

credits


17

Illustration 6

$80

Wage increases which are not at least $50 are not co-funded

Qualifying

Employers

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In any calendar year from 2013 to 2015, employers

qualify for Wage Credit if they fulfil the following:

(i) Made CPF contributions for these employees for at

least three months in the year of the wage increase,

and;

(ii) The employees who received the wage increase had

worked for at least three months in the preceding

calendar year

E.g. An employer hired an employee from Dec 2012 to Feb

2013 and gave a wage increase to the employee in Jan 2013.


This employer is not eligible for Wage Credit in 2013 because the employee was not employed for at least three months in 2013.

New Hires

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• New hires who were working with a

different employer • Employees could have changed jobs for many

reasons. As long as the employer had hired

the employee for at least 3 months and gave

him a wage increase, the employer will benefit

from the scheme.

• New hires who were not previously

employed e.g. fresh graduates • The wage increase will be calculated over the

first year of hire.

• e.g. Employers who hire fresh graduates in

2013 will only be eligible for wage increases

given in 2014 over 2013.


Wage Credit

Payout

20

• No application required.

• Wage Credits are calculated based on

CPF contributions made to the employee

and given automatically to employers who

qualify.

• First payout to be disbursed at end March

2014


What to do

in 2014

21

• 14 Jan 2014: Deadline to make CPF contributions

for 2012 and 2013 wages paid to your employees

• End Mar 2014: Eligible employers will receive a

notification letter from IRAS. You can also check

your eligibility on IRAS’ website, and apply for a

breakdown of your Wage Credit by employee.

Wage Credit will be credited directly into your

GIRO account registered with IRAS for Income

Tax. Otherwise, a cheque will be issued.

• Wage Credit is taxable in the year it is received.

Declare your Wage Credit as “Other Income”

when filing your Tax Return.


More

Information

22

• Hotline for enquiries: 1800 352 4727

• Email for enquiries: [email protected]

• FAQs, Wage Credit Scheme Calculator and

worked examples of Wage Credit calculation

are available at IRAS’ website: • http://www.iras.gov.sg/irasHome/wcs.aspx

• Also on the Budget Website:

Business Calculator http://app.singaporebudget.gov.sg/budget_2013/default.aspx


http://www.iras.gov.sg/irasHome/wcs.aspx

http://app.singaporebudget.gov.sg/budget_2013/default.aspx


23

How to use the WCS Calculator

Employers can use the WCS Calculator to estimate

the Wage Credit they will receive based on the

wages given to their employees.

Wage Credit Scheme Calculator

Agenda

1. Before you start

2. Download the WCS calculator

3. How to use the WCS calculator


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1. Before you start


26

Before you start

• Get ready employees’ employment and

salary details from payroll system:

Name

NRIC

Employment Date

Monthly Wage Records from 2012 to 2013

Optional

Prior 2012 or

during 2012/2013?


27

Wage Credit Calculator

Existing employees

Employed by you for at least 3 months in both 2012 and 2013

New hires with previous employment

Hired by you for at least 3 months in 2013; AND

Was employed for at least 3 months by any employer in 2012

New hires with NO previous employment

Hired by you for at least 3 months in 2013; BUT

Not employed for at least 3 months by any employer in 2012


3 types of employees:

WCS Calculator

cannot

calculate their

Wage Credits

28

2. Download WCS

Calculator


Download the WCS calculator

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Log in to IRAS

website. Click

“Wage Credit

Scheme.”

1

30


Scroll down to

“Payment of WCS

payout”

Click “WCS calculator”

2

3


Log in to IRAS

website. Click

“Tax Calculators”

1a

32


Scroll Down to

“Wage Credit

Scheme (WCS)”

Click “WCS calculator”

2a

3a

33


Click “Save” 4

34


Click “Yes” to access to the WCS calculator

5

35

3. How to use WCS

Calculator


36


• There are 5 worksheets in the excel file “Instructions”

“Wage Record”

“Wage Credit 2013”



• Enter each employee’s employment and

wage details in “Wage Record” sheet only.

37


On the “Wage record” sheet, fill in

the details required


On the “Wage Credit 2013” sheet, wage

credit receivable will automatically be

computed

39




computed

40




computed

41


Under “Instructions” sheet, there is a

Step-by-Step Guide on how to use the

WCS calculator

42

Worked Examples - Refer to WCS calculator spreadsheet


43

Wage Credit Calculator

Existing employees

Employed by you for at least 3 months in both 2012 and 2013

New hires with previous employment

Hired by you for at least 3 months in 2013; AND

Was employed for at least 3 months by any employer in 2012

New hires with NO previous employment

Hired by you for at least 3 months in 2013; BUT

Not employed for at least 3 months by any employer in 2012


3 types of employees:

WCS Calculator

cannot

calculate their

Wage Credits

44

The End

More

Information

45

• Hotline for enquiries: 1800 352 4727

• Email for enquiries: [email protected]

• FAQs, Wage Credit Scheme Calculator and

worked examples of Wage Credit calculation

are available at IRAS’ website: • http://www.iras.gov.sg/irasHome/wcs.aspx

• Also on the Budget Website:

Business Calculator http://app.singaporebudget.gov.sg/budget_2013/default.aspx


http://www.iras.gov.sg/irasHome/wcs.aspx



Documents

ACHIEVING QUALITY GROWTHapp.ncss.gov.sg/ictsweb/hr/2a.Wage Credit Scheme-IRAS.pdf · Wage Credit Scheme (WCS) 23 How to use the WCS Calculator Employers can use the WCS Calculator