Wage Credit Scheme (WCS) Singapore 2026: Final Year Guide for Employers

The Wage Credit Scheme (WCS) has been one of Singapore’s most employer-friendly government grants since it was introduced in Budget 2013. For over a decade, the scheme has helped businesses co-fund wage increases for their local employees, making it easier to raise salaries without absorbing the full cost alone.

2026 is the final year of the WCS. The government announced in Budget 2023 that the scheme would be extended one last time, through to 2026, at a reduced co-funding rate of 10%. This article explains everything Singapore employers need to know to maximise their WCS benefit before the scheme closes.

What Is the Wage Credit Scheme?

The WCS is a government grant administered by the Inland Revenue Authority of Singapore (IRAS). It co-funds a portion of qualifying wage increases given to Singapore Citizen (SC) and Permanent Resident (SPR) employees. The scheme was designed to help businesses restructure their cost base while still rewarding local workers with meaningful salary increases.

Critically, the WCS does not require employers to apply for it. Payouts are calculated automatically by IRAS using Central Provident Fund (CPF) contribution records. Provided the employer makes genuine CPF contributions on increased wages, IRAS will compute the qualifying amount and disburse it directly to the employer.

WCS Co-Funding Rates: 2024 to 2026

Under the final extension announced in Budget 2023, the government co-funds qualifying wage increases at the following rates:

The declining rate reflects the government’s intention to gradually phase out the scheme, encouraging businesses to make sustainable, market-driven wage decisions without ongoing subsidy. 2026 is the last year for which co-funding will be provided.

Which Employers and Employees Qualify?

Qualifying Employers

Any employer who makes CPF contributions for local employees in Singapore qualifies — there is no minimum headcount or revenue threshold. This means sole proprietorships, partnerships, and private limited companies all benefit from WCS, as do larger corporates and non-profit organisations. The employer must be registered in Singapore and must be the entity making CPF contributions.

Qualifying Employees

The WCS covers employees who are:

• Singapore Citizens or Permanent Residents
• Earning a gross monthly wage of up to S$5,000 (the co-funding cap)
• Employed in a manner that attracts mandatory CPF contributions

Employees earning above S$5,000 per month are not excluded from the scheme, but the co-funding calculation is capped at S$5,000 of gross monthly wage. Part-time employees who are SC or SPR and who receive CPF contributions also qualify.

What Counts as a Qualifying Wage Increase?

Not all salary adjustments trigger WCS co-funding. The increase must be a genuine, sustained rise in the employee’s gross monthly wage — not a one-off bonus, allowance, or reimbursement. Specifically:

• The increase must be reflected in the employee’s CPF contributions (i.e., it must form part of ordinary wages subject to CPF)
• The wage increase must be maintained throughout the calendar year
• Ad hoc payments, overtime, and variable bonuses that do not form part of the contractual monthly wage generally do not qualify

IRAS computes the qualifying wage increase by comparing the employee’s gross monthly wages in the current year against their wages in the preceding year. If wages have increased, the government co-funds 10% of the increase (capped at the S$5,000 wage ceiling) for 2026.

How the WCS Payout Works

Fully Automatic — No Application Required

One of the most employer-friendly features of the WCS is that there is no application process. IRAS pulls CPF contribution data from the CPF Board and automatically computes the payout for each qualifying employer. Employers do not need to submit any forms, log into any portal, or engage a service provider to claim the benefit.

Payout Timeline

WCS payouts are typically disbursed in the middle of the year following the qualifying year. For wage increases made in 2026, employers can expect to receive their WCS payout in mid-2027. IRAS will notify employers via letter or through their CorpPass-linked tax portal when the payout is processed.

Payouts for the 2025 qualifying year (at 20% co-funding) would have been received by most employers in mid-2026.

How to Check Your Payout

Employers can log in to the myTax Portal using their CorpPass credentials to view their WCS payout notices. The notice will detail the employees covered, the qualifying wage increases, and the amount disbursed.

How Much Can an Employer Receive?

The payout depends on how many SC and SPR employees received genuine wage increases during the year and by how much. Here is a simple illustration for 2026:

For a small employer with 10 to 20 local employees receiving modest wage increases, the cumulative WCS payout can still represent several thousand dollars — a meaningful offset against the cost of salary adjustments.

Practical Steps for Employers in 2026

Since WCS payouts are automatic, there is no checklist of actions to “claim” the grant. However, employers should take the following steps to ensure they receive the correct payout:

1. Ensure CPF contributions are accurate and timely. IRAS relies entirely on CPF records. Late or incorrect CPF submissions can affect the WCS computation.
2. Record wage increases in the employment contract or a salary revision letter. This is good HR practice and ensures there is a clear paper trail showing the increase was genuine and sustained.
3. Do not confuse bonuses with salary increases. Only increases to the contractual gross monthly wage attract WCS co-funding.
4. Check the myTax Portal in mid-2027. The payout notice for 2026 wage increases will be available there. If you believe your payout is incorrect, you can raise a query with IRAS.

What Happens After WCS Ends?

The WCS will not be renewed after 2026. The government has signalled that it expects the economy to have restructured sufficiently and that wage growth should be sustained by productivity improvements rather than government co-funding.

Employers who have been relying on WCS to partially offset salary costs should factor the loss of this grant into their 2027 and beyond payroll planning. For ongoing wage support, other schemes worth exploring include:

• The Progressive Wage Model (PWM), which sets minimum wages for specific occupations and may come with its own government support measures
• The Enterprise Development Grant (EDG), which funds productivity-related initiatives that can improve output per headcount
• The SkillsFuture Enterprise Credit (SFEC), which offsets the cost of workforce transformation

WCS and Your Company Secretarial Obligations

The WCS is purely a payroll and tax matter, but it has indirect relevance to company secretarial and corporate governance work. When directors review the annual financial statements, WCS payouts received during the year should be properly recognised as government grants under the applicable accounting standards — typically as income in the period the wage increase was made, matching the grant to the qualifying expenditure.

If your company needs help with CPF compliance, payroll structuring, or understanding how government grants interact with your financial reporting, our team at Raffles Corporate Services can assist. We provide corporate secretarial, accounting, and payroll services to Singapore companies of all sizes.

For general corporate secretarial matters and annual filings, see our corporate secretarial services page. For payroll and employment-related queries, our team handles CPF compliance, payroll processing, and all related employer obligations.

Conclusion

The Wage Credit Scheme has served Singapore employers well for over a decade. As 2026 marks its final year, businesses should ensure they are capturing the last round of co-funding by giving genuine, sustained wage increases to their SC and SPR employees before year end. The payout is automatic, requires no application, and will be disbursed by IRAS in mid-2027 based on CPF records.

Planning your payroll or need help with corporate secretarial and compliance matters? Contact Raffles Corporate Services at [email protected] or WhatsApp us at +65 8501 7133. We are happy to assist.