Guide To Senior Employment Credit (SEC) Payouts For Employers Hiring Older Workers In Singapore

The Senior Employment Credit (SEC) was announced in 2020, as part of the government’s Senior Worker Support Package. The Senior Worker Support Package itself comprises 4 main initiatives, with the 3 other being the CPF Transition Offset; Senior Worker Early Adopter Grant; and Part-Time Re-employment Grant.

These support measures is meant to help businesses adjust to higher costs from other government announcements, namely:

  • to increase in the retirement and re-employment age in Singapore to 65 and 70, from 62 and 67 respectively.
  • to increase CPF contribution rates for senior workers in 2022 (initially planned for 1 Jan 2021, but deferred amid Covid-19 pandemic in 2020)

During Budget 2023, the SEC was extended to 2025 to continue providing support to employers hiring senior employees. The SEC combined two previous government schemes – the Special Employment Credit and the Additional Special Employment Credit.

Read Also: Retirement And Re-Employment Act: What Employers Need To Know About Retaining Older Workers

What Is The Senior Employment Credit (SEC)?

In 2021 and 2022, the Senior Employment Credit provided wage offset to employers that hire senior Singapore workers aged 55 and above, and earn up to $4,000. The SEC was extended during Budget 2023 – for the duration spanning 2023 to 2025. However, it would only provide wage offset for Singaporean workers aged 60 and above, and earn up to $4,000.

More support will be given for senior employees who earn up to $3,000 a month.

Maximum Wage Offsets for employees aged 55 and above, and earn up to $4,000/month  
Age of employee as of  1 Jan 20212021 (up to)2022 (up to)
67 and above8%8%
Source: Ministry of Manpower (MOM)
Maximum Wage Offsets for employees aged 60 and above, and earn up to $4,000/month
Age of employees2023 (up to)2024 & 2025 (up to)
68 and above8%7%
Source: Ministry of Manpower (MOM)

It is important to note that Senior Employment Credit are paid to businesses to help offset costs during the transition phase, and employees should not expect to receive any part of this payout. 

How Much Senior Employment Credit (SEC) Payouts Will Businesses Get?

How much Senior Employment Credit payouts a business gets will depend on 2 things: 1) how much a senior employee is earning; and 2) how old their senior employees are.

While the SEC payouts are given for senior employees earning up to $4,000, more support is provided for those earning $3,000 or less.

Monthly Wage of EmployeeAged 55-59Aged 60-64Aged 65-66 [in 2021 to 2022]

Aged 65-67 [in 2023 to 2025]
Aged 67 and above [in 2021 to 2022]

Aged 68 and above [in 2023 to 2025]
Up to $3,0002% of wage [in 2021] 

1% of wage [in 2022]

N.A [in 2023 to 2025]
3% of wage [in 2021 to 2023]

2% of wage [in 2024 to 2025]
5% of wage [in 2021 to 2023]

4% of wage [in 2024 to 2025]
8% of wage [in 2021 to 2023]

4% of wage [in 2024 to 2025]
>$3,000 to $4,000$240 – (6% of wage) [in 2021] 

$120 – (3% of wage) [in 2022]

N.A [in 2023 to 2025]
$360 – (9% of wage) [in 2021 to 2023]

$240 – (6% of wage) [in 2024 to 2025]
$600 – (15% of wage)[in 2021 to 2023]

$480 – (12% of wage) [in 2024 to 2025]
$960 – (24% of wage)[in 2021 to 2023]

$840 – (21% of wage) [in 2024 to 2025]
Source: IRAS

As we can see in the table above, the support for senior employees aged 55 to 59 will go away in the Budget 2023 extension period (from 2023 to 2025).

From the calculations, a business that has an employee aged 68 and paid $3,000 a month would have received a Senior Employment Credit payout of $240 per month (8% of $3,000), or up to $5,760 over the first 2 years (in 2021 and 2022). This support measure will now continue from 2023 to 2025. The business will now also stand to receive $240 per month (8% of $3,000) in 2023, and another $120 per month (4% of $3,000) in 2024 and 2025. In total, the business will get $5,760 more for 2023 to 2025.

For the SEC payouts, businesses receive a gradually decreasing support for employees who earn more than $3,000, with those earning $4,000 (and more) receiving no support. 

For an employee aged 68 and paid exactly $4,000 a month in 2021 and 2022, SEC payouts amount to $0 ($960 – 24% of $4,000), as 24% of $4,000 amounts to $960. Similarly, this continues to be the case for the 2023 to 2025 extension period.

For an employee aged 68 and paid $3,500 a month, SEC payouts amount to $120 a month ($960 – 24% of $3,500), or up to $2,880 over 2 years in 2021 and 2022. SEC payouts for this employee will be another $3,960 for 2023 to 2025. This is from $120 a month in 2023, and $105 a month for 2024 to 2025.

Of course, a business with senior employees who are in younger age groups will also receive the respective lower SEC support levels. 

For businesses that want to do the calculations on their own, you can use an SEC calculator provided by IRAS.

When Can Businesses Expect To Receive The Senior Employment Credit (SEC) Payouts?

For wages that are paid from January to June 2021, employers will receive the SEC payout in September 2021. For wages paid from July to December 2021, employers will receive the SEC payout in March 2022.

The same applies to wages paid in 2022, and employers can expected to receive the payouts in September 2022 and March 2023.

For the SEC extension from 2023 to 2025, a employers can look out for a similar payout timeframe – in September and March the following year.

Businesses do not have to apply for these payouts as IRAS will be able to compute it based on CPF contributions. IRAS will then notify eligible employers of the amount payable to them. You can also view your notices once ready on your myTax Portal. These payouts will be disbursed through GIRO or PayNow Corporate.

Read Also: What Is PayNow For Business And 4 Reasons Why Businesses Should Adopt It Soon

Businesses Have To Pay Taxes On The Senior Employment Credit (SEC) Payouts

The SEC payouts are considered revenue in nature. If you receive the SEC payouts, they will be taxable in the year you receive them. 

Individuals (including sole proprietors) and partnerships are not required to declare scheme payouts, as they will be automatically calculated by IRAS.

Companies are required to declare SEC payouts in their income tax.

Read Also: Complete Guide To Singapore Corporate Taxes: Tax Rates; Tax Rebates; And Tax Exemptions

This article was first published on 4 March 2021 and has been updated with additional information.

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