Productivity Solutions Grant (PSG) — Costs and fees breakdown

The Productivity Solutions Grant (PSG) supports Singapore SMEs adopting pre-approved digital solutions and equipment by defraying part of the cost. As at 2026 the grant funds up to 50% of qualifying costs for eligible SMEs, applied for through the Business Grants Portal. The out-of-pocket cost to a business is therefore the balance after the grant, plus any advisory fee for scoping and application, typically S$500–S$2,000.

Productivity Solutions Grant essentials and worked example

The Productivity Solutions Grant is the most accessible starting point for an SME that wants to digitalise without a large open-ended project. Consider a food-services business buying a S$12,000 point-of-sale and inventory system from a listed vendor. With support of up to 50% as at 2026, the business receives up to S$6,000 and funds S$6,000 itself, recovering the grant portion after deployment. Because the solution is pre-approved, the assessment focuses on eligibility and correct documentation rather than on evaluating the technology.

The scheme is deliberately narrow: it funds adoption of proven, listed solutions, not bespoke development. That is also its strength, since approval is quicker and the risk of rejection lower than for open project grants. An SME can use the Productivity Solutions Grant repeatedly across different functions, subject to the prevailing caps, building a digital stack one grant at a time.

For businesses that then outgrow off-the-shelf tools and need custom capability, the Enterprise Development Grant is the natural next step, which is why many SMEs sequence the two.

What the PSG is

The Productivity Solutions Grant, administered by Enterprise Singapore, subsidises the adoption of IT solutions, software and equipment that improve productivity. Eligible solutions are pre-scoped and listed on the GoBusiness portal across sectors such as retail, food services, logistics, and across common functions like accounting, human resources and customer management. Because the solutions are pre-approved, the application is more straightforward than open project grants.

Who is eligible

Applicants must be registered and operating in Singapore, have at least 30% local shareholding, and meet the SME criterion (group annual sales up to S$100 million or group employment up to 200). The solution must be purchased, leased or subscribed for use within Singapore. Sole proprietorships, partnerships and companies all qualify if the conditions are met.

Funding level and cost breakdown

PSG funds up to 50% of qualifying cost as at 2026. On a S$10,000 accounting-software package, an approved SME would receive up to S$5,000 and pay S$5,000. The grant is disbursed on a reimbursement basis after the solution is purchased and, where required, deployed. Businesses should budget the full amount upfront and treat the grant as a later recovery.

Step-by-step application

First, select a pre-approved solution on the GoBusiness portal and obtain a quotation from the listed vendor. Second, submit the application through the Business Grants Portal using CorpPass, attaching the quotation. Third, await approval before making the purchase, as buying first can disqualify the claim. Fourth, deploy the solution and submit the claim with the invoice and proof of payment. Approval timelines vary but simple PSG applications are often decided within four to six weeks.

Stacking with other support

PSG is one of several schemes an SME can use. It cannot fund the same cost twice, but a business can use PSG for digital tools while using other grants for capability building or market entry. Our guide on stacking Singapore government grants explains how to sequence them, and our note on the Enterprise Development Grant (EDG) covers larger transformation projects. From 2026, several schemes are being consolidated under a new framework covered in our EDGE grant guide.

Tax treatment of the grant and the asset

Grants that subsidise capital expenditure reduce the base on which capital allowances are claimed. Where PSG subsidises revenue expenditure such as a software subscription, the net cost is deductible in the ordinary way. For the corporate tax context, see our sister guide on tax and compliance for digital businesses. Companies bringing in overseas specialists to implement solutions should review the EntrePass route where relevant.

Common mistakes and gotchas

The recurring errors are: purchasing the solution before approval; choosing a non-listed vendor or solution; missing the local-use requirement; and under-documenting the claim. Because PSG reimburses, cash-flow planning matters. Keep the quotation, invoice, and payment proof aligned to the same solution and vendor.

Timeline and cash-flow planning

Because the Productivity Solutions Grant reimburses rather than pre-funds, cash flow is the practical constraint. A typical sequence runs: select solution and obtain quotation (week 1); submit application via the Business Grants Portal (week 1–2); receive approval (week 4–6); purchase and deploy (week 6–10); submit claim with invoice and payment proof (week 10–12); receive disbursement (several weeks after a complete claim). An SME should therefore expect to fund the full purchase price for two to four months before the grant portion lands. Keeping CorpPass access, bank payment records and vendor documentation organised from the outset shortens the claim stage, which is where most delays occur.

Official resources

Primary sources and regulators:

FAQs

How much does the PSG cover?
As at 2026 the Productivity Solutions Grant funds up to 50% of qualifying cost for eligible SMEs, disbursed on a reimbursement basis.

Who qualifies for the PSG?
Businesses registered and operating in Singapore with at least 30% local shareholding that meet the SME size criteria, using the solution within Singapore.

Can I buy the solution first and claim later?
No. Approval should be obtained before purchase; buying first can disqualify the claim.

How long does approval take?
Simple PSG applications for pre-approved solutions are often decided within about four to six weeks.

Need help with this? Call, SMS or WhatsApp +65 8501 7133, or email [email protected]. Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.