ACHIEVING QUALITY GROWTHapp.ncss.gov.sg/ictsweb/hr/2a.Wage Credit Scheme-IRAS.pdf · Wage Credit...
Transcript of ACHIEVING QUALITY GROWTHapp.ncss.gov.sg/ictsweb/hr/2a.Wage Credit Scheme-IRAS.pdf · Wage Credit...
ACHIEVING
QUALITY
GROWTH
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$5.9 billion of Government Support over 3 years
3-Year
Transition
Support
Package
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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
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• 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
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• 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
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• 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.
Wage Credit Scheme (WCS)
Wage Credit Scheme (WCS)
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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
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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.
Wage Credit Scheme (WCS)
Wage Credit Scheme (WCS)
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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
Wage Credit Scheme (WCS)
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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
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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
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Additional wage increases are also co-funded until 2015
Illustration 2
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The portion of wage increase that is sustained will continue to be co-funded.
Illustration 3
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Illustration 4
Wage increases will be calculated based on the preceding year, including in cases where wages have decreased then.
Wage Credit Scheme (WCS)
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Sample Calculation
Co-funding will apply for all sustained wage increases
Illustration 5
Wage Credit
Scheme
(WCS)
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• Increase from wage in the preceding year
must be at least $50 to qualify for wage
credits
Wage Credit Scheme (WCS)
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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.
Wage Credit Scheme (WCS)
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 Scheme (WCS)
Wage Credit
Payout
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• 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
Wage Credit Scheme (WCS)
What to do
in 2014
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• 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.
Wage Credit Scheme (WCS)
More
Information
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• 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
Wage Credit Scheme (WCS)
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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
Wage Credit Scheme Calculator
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1. Before you start
Wage Credit Scheme Calculator
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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?
Wage Credit Scheme Calculator
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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
Wage Credit Scheme Calculator
3 types of employees:
WCS Calculator
cannot
calculate their
Wage Credits
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2. Download WCS
Calculator
Wage Credit Scheme Calculator
Download the WCS calculator
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Wage Credit Scheme Calculator
Log in to IRAS
website. Click
“Wage Credit
Scheme.”
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Wage Credit Scheme Calculator
Scroll down to
“Payment of WCS
payout”
Click “WCS calculator”
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Wage Credit Scheme Calculator
Log in to IRAS
website. Click
“Tax Calculators”
1a
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Wage Credit Scheme Calculator
Scroll Down to
“Wage Credit
Scheme (WCS)”
Click “WCS calculator”
2a
3a
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Wage Credit Scheme Calculator
Click “Save” 4
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Wage Credit Scheme Calculator
Click “Yes” to access to the WCS calculator
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3. How to use WCS
Calculator
Wage Credit Scheme Calculator
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Wage Credit Scheme Calculator
• There are 5 worksheets in the excel file “Instructions”
“Wage Record”
“Wage Credit 2013”
“Wage Credit 2014”
“Wage Credit 2015”
• Enter each employee’s employment and
wage details in “Wage Record” sheet only.
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Wage Credit Scheme Calculator
On the “Wage record” sheet, fill in
the details required
Wage Credit Scheme Calculator
On the “Wage Credit 2013” sheet, wage
credit receivable will automatically be
computed
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Wage Credit Scheme Calculator
On the “Wage Credit 2014” sheet, wage
credit receivable will automatically be
computed
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Wage Credit Scheme Calculator
On the “Wage Credit 2015” sheet, wage
credit receivable will automatically be
computed
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Wage Credit Scheme Calculator
Under “Instructions” sheet, there is a
Step-by-Step Guide on how to use the
WCS calculator
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Worked Examples - Refer to WCS calculator spreadsheet
Wage Credit Scheme Calculator
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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
Wage Credit Scheme Calculator
3 types of employees:
WCS Calculator
cannot
calculate their
Wage Credits
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The End
More
Information
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• 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
Wage Credit Scheme (WCS)