SME Cash Grant for Companies

A one-off cash grant will be given to all companies for YA 2012. The grant is pegged at 5% of the company’s YA 2012 revenue, capped at $5,000. To enjoy the cash grant, the company must have made CPF contributions (who would have to be a Singaporean or permanent resident) for at least one employee during the relevant accounting period for YA 2012.

However the dormant and inactive companies are not eligible for the cash grant and the definition of employee above excludes the shareholder of the company. IRAS has clarified that the SME cash grant is not taxable.

The SME Cash Grant shall provide some relief to companies, especially SMEs which are facing rising operating costs.

Special Employment Credit (SEC)

Special Employment Credit (SEC) was first introduced in 2011 Budget aiming to raise the employability of older low-wage Singaporeans. The SEC also helps employers to adjust to the re-employment legislation.

The enhanced SEC will be given to employers who hire Singaporean employees aged above 50 earning up to $4,000 per month. The employer will receive an SEC of 8% of the employee’s monthly wages for each employee aged above 50 who earns up to $3,000 per month. The SEC payout will be lower for employees with a monthly wage of between $3,000 and $4,000.

The SEC will be paid twice a year ie in September and March. The first payment of the enhanced SEC will be made in September 2012 to employers who have eligible employees on their payroll.

The employers who make regular CPF contributions for their workers need not take further action in order to receive the enhanced SEC. The CPF board will inform the employers if they are eligible to receive SEC.