Singapore to Offer Jobs Growth Incentive From 2021
by activpayroll
From next year, eligible firms in Singapore will begin to receive financial support from the Jobs Growth Incentive scheme.
On 4 September, Singapore’s Ministry of Manpower (MOM) and the Inland Revenue Authority of Singapore (IRAS) announced the details of the $1 billion Jobs Growth Incentive (JGI) scheme which provides businesses in the city-state with a financial incentive to hire local workers. Beyond the need to support Singaporean firms during the ongoing Covid-19 pandemic, the JGI is also interned to address a broader need to create jobs for local workers: IRAS’ goal is to encourage firms to bring forward their hiring plans and grow their local workforce between September 2020 and February 2021.
Firms that are eligible for the JGI will not need to apply for the scheme but will be automatically enrolled. As an employer in Singapore, it is important to understand how the JGI will function.
What is the JGI?
The JGI is a salary support scheme paid to businesses in Singapore for all locally-hired employees at all wage levels. Higher levels of support will be paid for the hiring of mature employees. JGI payments will begin automatically in March 2021 onwards: payments will be made monthly based on the firms’ CPF contributions.
How do businesses in Singapore qualify for the JGI?
Eligibility for JGI payments will depend on how many local employees a business has hired between September 2020 and the end of February 2021. The local employees hired in that period must be being paid $1,400 or more in gross monthly wages.
How much does the JGI pay?
JGI payments will vary depending on the age of the new hires:
- For new hires under 40 years old, JGI will be paid at 25% of the first $5,000 of gross monthly wages
- For new hires 40 years old and above, JGI will be paid at 50% of the first $5,000 of gross monthly wages
JGI will be paid for the first 12 months of a new hire’s employment. In total, up to $15,000 is available for new hires under 40 years old, and up to $30,000 for those above 40 years old - as long as the hiring firm continues to meet the eligibility criteria for the first 12 months of employment.
JGI payments do not affect the Jobs Support Scheme (JSS) payments that firms may already be receiving for their local employees.
What happens if existing employees leave employment?
IRAS and the MOM are encouraging firms to retain their existing employees as they make new hires. Accordingly, a firm’s JGI payments will be reduced if an existing employee (as of August 2020) leaves their employment after August 2020.
The reduction in JGI will be calculated using a standard 5% rate, or (if it is higher) the ratio of existing employees that have left to existing employees still in employment as of August 2020.
What is happening to the existing Enhanced Hiring Incentive scheme?
The JGI scheme offers a greater level of support than the Enhanced Hiring Incentive (EHI). Accordingly, from September 2020, the JGI effectively replaced the EHI.
Where can I learn more about the JGI?
Businesses in Singapore can find out more about the JGI by visiting the IRAS website, where government contact information and FAQs are available.
Find out more about payroll in Singapore in our dedicated Global Insight guide, and find more information on coronavirus support for businesses, employers, and employees, on the activpayroll Latest News page.