Singapore – Budget 2025

(A) Corporate Income Tax Rebate and Cash Grant to provide support for companies’ cash flow needs, a CIT Rebate of 50% tax payable will be granted in Year of Assessment (“YA”) 2025.

Companies that are active and have employed at least one local employee in Calendar Year (“CY”) 2024 (referred to as the “local employee condition”) will receive a minimum benefit of $2,000 in the form of a CIT Rebate Cash Grant. The total maximum benefits (i.e., sum of CIT Rebate and CIT Rebate Cash Grant) that a company may receive is $40,000. Eligible companies will automatically receive the benefits from 2Q CY 2025 onwards. A company is considered to have met the local employee condition if it has made CPF contributions to at least one local (i.e., Singapore Citizen or Permanent Resident) employee, excluding shareholders who are also directors of the company, in CY 2024.

For example, Company A hired two local employees in CY 2024. It has a tax payable of $30,000 for YA 2025. Company A will receive a $2,000 CIT Rebate Cash Grant and another $13,000 [(50% * $30,000) – $2,000] in CIT Rebate.

Please visit the IRAS website for more details – https://www.iras.gov.sg/taxes/corporate-income-tax/basics-of-corporate-income-tax/corporate-income-tax-rate-rebates-and-tax-exemption-schemes.

(B) Progressive Wage Credit Scheme (PWCS)

The PWCS was introduced at Budget 2022 to provide transitional wage support for employers to adjust to the Progressive Wages moves from CY 2022 to CY 2026, as well as encourage employers to raise wages of lower-wage workers.

The following conditions apply:

1. Employee has average gross monthly wages of up to $3,000, before the wage increase;
2. Employee has average gross monthly wages of up to $4,000, after the wage increase;
3. Average gross monthly wage increase must be at least $100 in each qualifying year; and
4. Wage increase in each qualifying year will be co-funded for two years if the wage increase is sustained.

To strengthen support for employers to uplift the wages of lower-wage employees, the PWCS co-funding support will be enhanced for wage increases given in the qualifying years 2025 and 2026.

Table 1: Increase in PWCS Co-Funding Levels for Eligible Wage Increases from 2025 to 2026

Please visit the PWCS website for more details – https://www.iras.gov.sg/schemes/disbursement-schemes/progressive-wage-credit-scheme

(C) Personal Income Tax Rebate

As part of the SG60 package, the Government will provide a Personal Income Tax (“PIT”) Rebate of 60% of tax payable for all tax resident individuals for the Year of Assessment (“YA”) 2025 (i.e., for income earned in 2024). The rebate will be capped at $200 per taxpayer. The $200 cap ensures that the PIT Rebate mostly benefits middle-income workers. No application for the PIT Rebate is required. IRAS will compute and grant the rebate automatically to all tax resident individuals.

For more information on your PIT Rebate, you may refer to your tax bill for YA 2025. Most taxpayers should receive their tax bills between April to September 2025.

(D) Budget 2025: Tax Changes and Enterprise Disbursements

For more details on tax changes and enterprise disbursements announced in the Budget 2025, please visit https://www.iras.gov.sg/news-events/singapore-budget/budget-2025–tax-changes-and-enterprise-disbursements