On Thursday, 12 February 2026, Prime Minister Lawrence Wong delivered his second Singapore Budget. We summarise the key updates that businesses and HR professionals should take note of:
40% Corporate Income Tax Rebate for YA 2026
To help companies stay competitive, businesses will receive a 40% corporate income tax rebate for the Year of Assessment (YA) 2026.
- Minimum benefit: S$1,500 for any active company that employed at least one local worker last year
- Cap: up to S$30,000 per company
This rebate is intended to provide short-term relief, especially for firms facing cost pressures, alongside longer-term efforts to restructure and transform the economy.
S$1 billion Boost for Growth-Stage Startups
Singapore is strengthening its startup ecosystem by adding S$1 billion to Startup SG Equity. With this expansion, it will also support growth-stage companies that are ready to scale.
To further build Singapore’s growth-capital landscape, a new workgroup led by Chee Hong Tat will be set up to collaborate with industry and develop strategies to position Singapore as a leading hub for growth capital.
S$1.5 billion Top-Up to Strengthen Singapore’s Financial Sector
To build on the recent positive momentum in Singapore’s equities market, the government will add S$1.5 billion to the Financial Sector Development Fund.
So far, MAS has allocated close to S$4 billion under the programme to nine asset managers.
Local Qualifying Salary to Rise to S$1,800
Local Qualifying Salary (LQS) for full-time local employees will increase from S$1,600 to S$1,800. This threshold affects companies that hire foreign workers and is part of broader efforts to strengthen support for lower-wage workers.
More Support for Companies Paying Progressive Wages
Singapore will enhance support for employers that raise wages under the Progressive Wage Credit Scheme (PWCS). Key changes include:
- Higher co-funding: Government support will increase from 20% to 30%.
- Extended timeline: The scheme will be extended by two years, to 2028.
- Higher qualifying wage increase (from next year): Employers must raise wages by at least S$200 (up from S$100) to qualify for PWCS support.
These updates build on the Progressive Wage Model, which ties pay growth to skills development and career progression. To help workers upskill, the basic tier of Workfare Skills Support will also be enhanced with higher hourly training allowances.
More Support for Mid-Career Workers
Over 60,000 Singaporeans aged 40 and above have benefited from the SkillsFuture Level-Up Programme since it launched in 2024. To help even more mid-career workers, the programme will be expanded. From March, the Mid-Career Training Allowance will:
- be extended to part-time learners, and
- cover a wider range of industry-relevant courses.
Senior Employment Credit Extended to End-2027
Singapore will continue supporting older workers to stay employed by extending the Senior Employment Credit to end-2027. Under this scheme, the government provides wage offsets to help employers who hire and retain eligible Singaporean senior workers.
EP Minimum Salary to Increase from January 2027
To maintain the quality of Employment Pass holders as wages rise, the minimum qualifying salary for new applicants will increase in January 2027:
- All sectors: from S$5,600 to S$6,000
- Financial services: from S$6,200 to S$6,600
S Pass Minimum Salary to Increase to S$3,600
The minimum qualifying salary for new S Pass applicants will be raised:
- All sectors: from S$3,300 to S$3,600
- Financial services: from S$3,800 to S$4,000
Qualifying salary requirements for older EP and S Pass applicants will also increase in line with these updates. For renewals of both passes, the new salary requirements will apply one year later, in 2028, giving businesses more time to adjust.
Work Permit Levies to Increase in Selected Sectors from 2028
Singapore will adjust Work Permit levies in some sectors, with changes starting in 2028 to give businesses time to prepare. Key updates:
- Marine sector (basic-skilled workers): levy increase of S$100
- Process sector (basic-skilled workers): levy increase of S$150
- Manufacturing and services sectors: the current tiered levy structure will be simplified
Strengthening Retirement Support
Key measures include:
- CPF top-ups for older Singaporeans: Those aged 50 and above with Central Provident Fund retirement savings below the Basic Retirement Sum will receive a CPF top-up of up to S$1,500. People with lower balances will get larger top-ups to better target support.
- CPF contribution increases in 2027: The government will proceed with the next planned step of CPF contribution rate increases in 2027, aimed at supporting senior workers.
- CPF Transition Offset for employers: Employers will continue to receive the CPF Transition Offset, covering half of the increase in employer contributions for next year for employee aged above 55 to 65.
- More CPF investment options: CPF members will have more investment choices available if they want to grow their savings further.
New CPF Life-Cycle Investment Option from 2028
Central Provident Fund members will be able to invest through a new voluntary life-cycle investment scheme when it launches in 2028. Under this approach:
- Members typically take more investment risk when younger (with higher exposure to equities).
- Their portfolio is automatically rebalanced toward safer assets as they get closer to retirement.
The government will help shape and develop these products, and may provide limited, time-bound support to kick-start the scheme. To keep things simple for members:
- Fees will be kept low, and
- the government will appoint two to three credible providers.
New “Champions of AI” Programme to Accelerate Company Adoption
Singapore will introduce new support to help companies adopt AI more fully. To drive deeper adoption, a new Champions of AI programme will be launched to help companies transform more comprehensively using AI.
Selected firms will receive tailored support for:
- Enterprise transformation
- Workforce training
More Support for Businesses to Adopt AI
Singapore will enhance existing schemes to help companies use AI and digital tools more effectively.
- Under the Enterprise Innovation Scheme, businesses currently receive 400% tax deductions on qualifying costs such as R&D and innovation. The scheme will be expanded so AI-related spending can also qualify for YA 2027 and YA 2028, capped at S$50,000 per YA.
- The Productivity Solutions Grant, which supports adoption of digital solutions, will be broadened to cover a wider range of digital and AI-enabled tools, helping companies work smarter and stay competitive.
Support for Workers in an AI-Enabled Economy
To help people adapt, Singapore will roll out broad support, through training, tools and new opportunities to guide workers through the shift to an AI-enabled economy.
Key focus areas include:
- Helping workers use AI to automate routine tasks and spend more time on higher-value work
- Example: In accountancy, AI can handle data preparation and bookkeeping, allowing professionals to move into more strategic work.
- Building practical AI skills across industries, starting with the accountancy and legal sectors, then expanding to other fields over time.
- Strengthening AI literacy through Institutes of Higher Learning for both students and working adults.
6 Months of Free Access to Premium AI Tools
To make learning easier, the government will revamp the SkillsFuture website so AI learning pathways are clearer, and people can find courses that match their job needs and skill level.
Singaporeans who enroll in selected courses will also receive six months of free access to premium AI tools to practise and apply what they learn.
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 today to learn how we can optimise your HR operations in 2026 and beyond.
For further details on the Singapore Budget 2026, visit the official government website: https://www.singaporebudget.gov.sg/