Singapore Budget 2023: Key Updates for Local Businesses [Infographic]

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If you missed Finance Minister Lawrence Wong’s Singapore Budget 2023 announcement on Valentine’s Day (i.e. 14 Feb 2023), fret not! We’ve sieved out key updates that small-and-medium-sized enterprises (SMEs) and/or business owners may find useful and compiled them all in this article. We also designed an easy-to-digest infographic that can be found further below. 

We have segmented the article and infographic into three sections: 

  • Points 1 to 7 detailing employment-related updates you need to know, 
  • 9 to 11 on the various types of financial assistance from the government, and lastly,
  • 12 on the non-financial assistance from the government. 

You may jump straight into the article to read the details that further explain the infographic, or simply click into the relevant section of interest in ‘Contents’ to navigate the article. 

Infographic: Singapore Budget 2023

Employment-Related Updates

1. Senior Employment Credit (SEC)

The Senior Employment Credit (SEC) will extend from 2023 to 2025. It is a wage offsets that helps employers adjust to higher costs as a result of:

  • impending increase in retirement age in Singapore from 62 to 65
  • impending increase in re-employment age in Singapore from 67 to 70
  • rising in CPF contribution rates for senior workers in 2022 (see more details in point 6)

Of course, this only applies to employers who have Singaporean workers aged 55 and above, with a monthly pay up to $4000. More support (i.e. wage offset) will be provided to employees with higher age bands and/or a monthly pay of $3000 or less. Here is how each SEC payout per employee is computed:

Monthly Wage of EmployeeAged 55-59Aged 60-64Aged 65-66Aged 67 and above
Up to $3,0002% of wage (in 2021) 
1% of wage (in 2022)
3% of wage5% of wage8% of wage
$3,001 to $4,0006% of wage (in 2021) 
3% of wage (in 2022)
9% of wage15% of wage24% of wage

Companies can expect a payout titled ‘Senior Employment Credit’ (GIRO) or ‘GOVT’ PayNow Corporate in their bank account from 29 Mar 2023, if they have:

  • an existing GIRO arrangement with IRAS by 6 Feb 2023, or
  • is registered for PayNow Corporate by 22 Mar 2023

The Minister for Manpower will share more details at the upcoming Committee of Supply debate.

2. Part-time Re-employment Grant (PTRG)

The Part-time Re-employment Grant (PTRG) provides funding support of up to $125,000 to employers who commit to a part-time re-employment policy for its eligible senior workers. As such, it has helped increase the availability of part-time re-employment to senior workers in participating companies. Senior workers also benefitted from other forms of Flexible Work Arrangements, which more employers are now keen to sustain following the experience during the COVID-19 pandemic.

That said, the PTRG is extended to 2025. It aims to incentivise employers to offer to senior workers age 45 and above the following: Part-time re-employment, Flexible work arrangements (FWAs), and Structured career planning (SCP).

Can my company apply for PTRG?

All companies/employers can apply for PTRG if they:

  • are legally registered or incorporated in Singapore. This includes societies and non-profit organisations such as charities and voluntary welfare organisations.
  • are not governmental agencies, statutory boards and other organs-of-state.
  • have at least one senior worker aged 60 and above (based on birth year), either Singapore citizen or permanent resident employed on a permanent basis or on one or more employment contract(s) that is/are at least 12 months in duration.

However, application for PTRG has currently ended on 31 December 2022. That is because the government is in the midst of reviewing the PTRG to ensure it remains relevant in supporting employers to create an age-friendly workplace and attract senior workers to remain in the workforce.

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The Minister for Manpower will share more details at the upcoming Committee of Supply debate.

3. Government-paid Paternity Leave (GPPL)

Great news for working fathers – your employers must increase paternity leave from 2 weeks to 4 weeks on Jan 1, 2024! However, as of 2023, employers can voluntarily grant additional 2 weeks paternity leave (i.e. total of 4 weeks paternity leave).

Working fathers can take the additional 2 weeks of paternity leave either:

  1. in one continuous block within 6 weeks from the child’s date of birth, or
  2. non-continuously, with mutual agreement between employer and employee

 You can estimate the amount of reimbursement here.

Other HR admin considerations for GPPL

  • GPPL cannot be used to offset the notice period when the eligible employee leaves his job
  • Working fathers will not be eligible for the unconsumed portion of their GPPL upon the termination of their employment, and for any payment from their employer in lieu of that leave.
  • Unconsumed GPPL cannot be brought forward to the next employment as well.

4. Unpaid Infant Care Leave (UICL)

Currently, each working parent is entitled to 6 days of paid childcare leave in addition to 6 days of unpaid infant care leave, if their child is a Singapore citizen and under the age of two.

The good news is that unpaid infant care leave in the child’s first 2 years will go up, from 6 days per year to 12 days per year. A working parent is eligible for infant care leave without pay if they have served their employer for a continuous period of at least 3 months. Adoptive parents will be eligible only after the Adoption Order is passed.

Other HR admin considerations for UICL

  • Eligible employees cannot transfer your UICL to their spouse.
  • Any unconsumed UICL cannot be carried over to the next relevant period.
  • Eligible employees cannot use UICL to offset the notice period when they leave their job.
  • Natural fathers are not eligible to take UICL on or after 1 Nov 2021 if he and/or the natural mother of the child was lawfully married to another person at the time the child was conceived and does not subsequently lawfully marry each other.
  • An employee who is eligible for UICL under an employer will cease to be eligible under that employer for that relevant period upon the termination of his/her employment and for any payment in lieu thereof.
  • Parents whose child is adopted by another person, other than jointly with the parent, will cease to be eligible for UICL in respect of the child.
  • A foster parent who has ceased to provide care, protection or supervision to the child will not be eligible for UICL in respect of the foster child.
  • A parent is not eligible for more than 12 days of UICL in respect of any child.

5. CPF monthly salary ceiling

The CPF monthly salary ceiling will also increase from $6,000 to $8,000; this is a change that will take place in phases starting from September this year until 2026.

Since 20161 Sep 20231 Jan 20241 Jan 20251 Jan 2026
$6,000 per month$6,300 per month$6,800 per month$7,400 per month$8,000 per month
CPF annual salary ceiling – which set the maximum amount of CPF contributions payable for all wages received in a year – will remain at $102,000 per annum. As such, the CPF Annual Limit remains at $37,740. To ensure that employees earning the same annual salary receive the same CPF contributions, regardless of their salary structure, the CPF monthly salary ceiling will eventually be set at one-twelfth of the annual salary ceiling at a steady state.

The gradual increments aim to:

  • keep pace with rising salaries, and
  • help middle-income Singaporeans save more for their retirement.

While the rising CPF monthly salary ceiling lowers the take-home pay of workers earning more than $6,000 a month, it increases the total contribution from employers and employees to CPF accounts.

6. CPF transition support (CTO) for gig workers and senior workers

Platform workers or lower-income gig workers aged below 30 will soon need to make Central Provident Fund (CPF) contributions, while an opt-in system will be available for older workers.

To help cushion the impact for lower-income gig workers earning $2,500 or less a month, the CTO will offset part of these workers’ share of the year-on-year increase in their CPF contribution rates in the first four years of implementation.

For older workers aged 55 to 70 from next year, the Government will continue with a one-third increase in CPF contribution rates, and provide employers with a CTO like it did for the first two raises. The minimum CPF monthly payout for seniors on the Retirement Sum Scheme will increase to $350 a month.

Let’s say your company already has an existing GIRO arrangement with IRAS as at 6 Feb 2023 or is registered for PayNow Corporate as at 22 Mar 2023. In that case, you can expect a payout titled “CPF Transition Offset” (GIRO) or “GOVT” (PayNow Corporate) in your bank account from 29 Mar 2023. Similar to SEC, CTO payouts will not be via cheques.

Selected companies will receive a letter from IRAS to submit supporting documents for review. If the government selects you for review, your Mar 2023 payouts will withhold and you may need to provide a declaration or documents, in order to substantiate your eligibility for CTO payout. The payout will only disburse after the completion of the review.

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7. Progressive Wage Credit Scheme

The government introduced Progressive Wage Credit Scheme in 2022 to co-funds the wage increases that employers provide to resident lower-wage employees till 2026. This year, the government will enhance the scheme’s co-funding support or wage increases, and top up the scheme’s fund by $2.4 billion.

Companies will receive a payout titled “Progressive Wage Credit Scheme” (GIRO) or “GOVT” (PayNow Corporate) in their bank account from 31 Mar 2023, under the condition that the company:

  • already has an existing GIRO arrangement by 13 Feb 2023 with IRAS or
  • is registered for PayNow Corporate by 24 Mar 2023.

Similar to SEC and CTO, PWCS payout will not be via cheques. Selected companies will receive a letter from IRAS to submit supporting documents for review. If the government selects you for review, your Mar 2023 payouts will withhold and you may need to provide a declaration or documents to substantiate your eligibility for PWCS payout. The payout will only disburse after the completion of the review.

Financial Investments

8. Enterprise Financing Scheme

The current enhancements to the Enterprise Financing Scheme (EFS) will be extended for another year until Mar 31, 2024. This includes the 70% Government risk-share for trade loans.

The EFS Trade Loan scheme finances the trade needs of SMEs here, such as inventory and stock financing, for both domestic and overseas transactions. SMEs will also continue to be able to tap on the EFS Working Capital Loan, which finances the operational cash flow needs of businesses at a maximum loan quantum of $500,000. Construction SMEs with domestic projects are also able to continue to loan up to S$30 million per borrower.

9. Energy Efficient Grant (EEG)

The Energy Efficient Grant (EEG) – once introduced in June 2022 – will also be extended to Mar 21, 2024. This grant supports businesses in the food services, food manufacturing and retail sectors to invest in energy efficiency. It’s updated goal is to help firms cope with rising energy costs in the wake of Russia’s war in Ukraine.

This initiative provides funding of up to 70% for the implementation of pre-approved, energy-efficient machinery by SMEs operating in the food services, food manufacturing, and retail sectors. Assistance is capped at $30,000 per company annually.

With the extension, applications for the EEG will be open to Mar 31, 2024.

10. Enterprise Innovation Scheme

A new Enterprise Innovation Scheme has been announced. It will “significantly enhance” tax reductions for five key activities:

  1. Research and development conducted in Singapore
  2. Registration of intellectual property, including patents
  3. Acquiring and licensing of intellectual property rights
  4. Innovation carried out with polytechnics and ITE
  5. Training via courses approved by SkillsFuture and aligned to Skills Framework

For each of the five key activities, tax deductions will increase to 400% of qualifying expenditure, compared to 250% previously. The qualifying expenditure however will cap at $400,000 for each activity, expect for innovation carried out with polytechnics and ITE, of which this will cap at $50,000.

Meanwhile, smaller and unprofitable business will be eligible to receive support with innovation costs. Businesses will have the option to convert 20% of their total qualifying expenditure per year of assessment into a cash payout of up to $20,000.

11. SME Co-Investment Fund

An additional $150 million will be set aside via the SME Co-Investment Fund to invest in promising SMEs, with the aim of eliciting a corresponding $300 million from other investors.

To date, $1 billion has been committed to such investments in SMEs supporting their growth with investments in some 60 Singapore-based companies. This has translated to around $2 billion of additional investments in those companies from the private sector. Total revenue of these companies have more than doubled after the investments with over half having developed new capabilities or expanded beyond Singapore.

Non-financial Investments

12. Jobs-Skills Integrators

These integrators can be existing institutions, and they will be appointed to help develop workers. They will have new outcomes to deliver. This includes having to understand the manpower and skills gap in a sector, working with training providers to update existing programmes, and ensuring that training translates to better employment and earnings prospects.


And… that’s about it! We’ve exhausted almost every point from the Singapore Budget 2023 that we think you may find useful. If you liked this article, feel free to share it with your friends and colleagues. You may also drop us some comments below!

If you’d like to take a closer look at the Singapore Budget 2023, you can refer to the official speech here.

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