Enhancements to the Progressive Wage Credit Scheme (PWCS)
The Progressive Wage Credit Scheme (PWCS) was introduced in Budget 2022 to provide transitional wage support for employers to:
- Adjust to mandatory wage increases for lower-wage workers covered by the Progressive Wage Model and Local Qualifying Salary requirements; and
- Voluntarily raise wages of lower-wage workers.
The Government will co-fund wage increases of eligible resident employees from 2022 to 2026. Employers do not need to apply for the PWCS and can expect to receive the payout for the respective year by the first quarter of the following year.
As announced at Budget 2025, PWCS will be enhanced:
1) Increase in Government’s 2025 PWCS Co-Funding Support
For wage increases given in the qualifying year 2025, the PWCS co-funding support will be raised from 30% to 40%. This enhanced 2025 co-funding support will also apply to wage increases given in qualifying year 2024 and sustained in 2025.
2) Increase in Government’s 2026 PWCS Co-Funding Support
For wage increases given in the qualifying year 2026, the PWCS co-funding support will be raised from 15% to 20%. This enhanced 2026 co-funding support will also apply to wage increases given in qualifying year 2025 and sustained in 2026.
Design of PWCS
The PWCS has the following design:
a) Applies to wage increases given to Singapore Citizen and Permanent Resident employees.
b) Support for wage increases up to $3,000 gross monthly wage ceiling will run from 2022 to 2026.The Government will provide support for wage increases at the stipulated co-funding levels from 2022 to 2026.
c) Average gross monthly wage increase must be at least $100 in each qualifying year to be eligible for PWCS.
d) Eligible wage increases in each qualifying year will be co-funded for two years.For example, a 2024 wage increase will be supported in qualifying year 2024, and also in 2025 if sustained.
e) Employees’ average wage must be $4,000 or lower to be eligible for PWCS. A wage cut-off for PWCS eligibility will apply from 2024 onwards. Employees whose average monthly wage exceeds $4,000 post-wage increase will not be eligible for PWCS.
