Temporary Employment Credit (TEC)
2015.11.17
Taxation
In October, some clients have received Temporary Employment Credit (TEC) from CPF board.
What is the TEC?
The Temporary Employment Credit (TEC) was announced as a Budget 2014 initiative to help you, as an employer, adjust to the 1 percentage point increase in Medisave contribution rates which took effect in January 2015. With the TEC, you will receive a one-year offset of 0.5% of wages for your Singaporean and Singapore Permanent Resident (PR) employees in 2015.
Enhancement and extension of the TEC
As announced at Budget 2015, the TEC will be further enhanced and extended to help companies adjust to the cost increases associated with:
i) 1% increase in employer CPF contribution rates for older workers.
ii )Increase in the CPF salary ceiling.
These CPF changes will take effect in January 2016.
TEC payout
TEC payments will be made based on CPF contributions paid to eligible employees from January 2015 to December 2017.
| Year | TEC (% of monthly wages) | TEC annual cap (based on CPF Annual Limit) per eligible employee |
|
2015
|
1% |
$850
|
| Up to CPF salary ceiling of $5,000 per month | ||
|
2016
|
1% |
$1,020
|
| Up to CPF salary ceiling of $6,000 per month | ||
|
2017
|
0.50% |
$510
|
| Up to CPF salary ceiling of $6,000 per month |
How to treat TEC for company tax purpose?
TEC is revenue in nature therefore that is taxable under Income tax act.
Reference
- MOM Home page
- MOH Home page
