On Tuesday, 18 February 2025, Prime Minister and Finance Minister Lawrence Wong delivered the Singapore Budget 2025, focusing on addressing rising costs, supporting businesses, strengthening the economy, and preparing for global uncertainties.
Below are the key updates that businesses and HR professionals should take note of:
1. SkillsFuture Workforce Development Grant to Support Workforce Upskilling and Transformation
The government is introducing the SkillsFuture Workforce Development Grant to assist companies in restructuring, transforming, and enhancing their workforce capabilities. This initiative will merge existing programmes from Workforce Singapore and SkillsFuture Singapore, making the application process simpler for businesses.
Additionally, this grant will provide up to 70% funding to support job redesign efforts.
2. Revamped SkillsFuture Enterprise Credit for Easier Access
To improve accessibility, the SkillsFuture Enterprise Credit will be revamped. Currently functioning on a reimbursement basis, the new version will transition into an online wallet system, allowing businesses to check their balance and use credits instantly for workforce transformation and training.
From mid-2026, businesses employing at least three resident employees will receive SG$10,000 in credits, valid for three years. In the meantime, the existing scheme—set to expire in June—will be extended until the new credit system is launched.
3. SkillsFuture Level-Up Programme: New Training Allowance
First introduced in 2024, the SkillsFuture Level-Up Programme offers SG$4,000 in SkillsFuture Credit to Singaporeans aged 40 and above to support mid-career upskilling.
Starting mid-March 2025, eligible Singaporeans enrolling in full-time, long-form programmes can apply for the SkillsFuture Mid-Career Training Allowance. This allowance will apply to training starting from 1 April 2025, with the first disbursement made the following month. The allowance will cover 50% of an individual’s average income over the past 12 months, capped at SG$3,000 per month.
By early 2026, this allowance will also be available for selected part-time training, providing a flat rate of SG$300 per month to help cover training-related costs.
Individuals can benefit from the SkillsFuture Mid-Career Training Allowance for a total of 24 months over their lifetime.
4. Higher CPF Contribution Rates for Older Workers Starting 2026
From 1 January 2026, CPF contribution rates for Singaporean and permanent resident workers aged 55 to 65 will increase by 1.5% to help older workers build stronger retirement savings.
5. More Support for Hiring Senior Workers
The Senior Employment Credit (SEC) has been extended until the end of 2026, providing wage offsets for businesses hiring Singaporean employees aged 60 and above earning below SG$4,000.
From 18 February 2025, the qualifying age for the highest wage support tier will be raised to 69 years old (up from the current 68) in line with the increase in the re-employment age. Companies hiring these workers will receive wage reimbursements of up to 7%.
6. Enhanced Support for Jobseekers and Localised Job Matching
Starting April 2025, the SkillsFuture Jobseeker Support Scheme will offer financial assistance of up to SG$6,000 over six months to help unemployed individuals while they undergo training or search for new job opportunities.
Additionally, career matching services will be expanded, including localised job-matching options to help jobseekers find opportunities closer to home. This service will be available at all Community Development Councils (CDCs) across Singapore.
7. SG$150M Boost to Help Enterprises Adopt AI
To accelerate AI adoption, the government is launching the SG$150 million Enterprise Compute Initiative to assist businesses in integrating AI-driven solutions into their operations.
Eligible companies will have access to AI tools, computing resources, and consultancy services through partnerships with major cloud service providers.
8. Enhanced Progressive Wage Credit Scheme
The government remains committed to supporting lower-wage workers by enhancing the Progressive Wage Credit Scheme:
- In 2025, the co-funding level for wage increases will increase from 30% to 40%.
- In 2026, it will rise from 15% to 20%.
These adjustments aim to help businesses manage rising wage costs while supporting lower-income employees.
9. Corporate Income Tax Rebate Announced
To ease cost pressures on businesses, a 50% corporate income tax rebate will be introduced for Year of Assessment 2025, as announced at the Singapore Budget 2025.
- Companies that employed at least one local worker in the previous year will receive a minimum rebate of SG$2,000.
- The maximum rebate per company is SG$40,000.
This initiative is intended to help businesses manage cash flow amid increasing structural costs.
Navigating the evolving landscape of labour laws can be challenging with continuous changes. Partnering with an HR service provider offers a solution to stay consistently informed. Links International stands out as an industry leader in HR outsourcing, offering services such as payroll outsourcing, visa applications, PEO/EOR services, outplacement, recruitment, corporate services and more. Contact us to discover how we can assist in optimising your business operations in 2025!
Contact us today to learn how we can optimise your HR operations in 2025 and beyond.
For further details on the Singapore Budget 2025, visit the official government website: https://www.mof.gov.sg/singaporebudget.